Holding School Districts Accountable
By Joseph Sawicki, Suffolk County Comptroller Jr. & Tom Spota District Attorney
An extensive, yearlong investigation was conducted by a Special Grand Jury into fiscal matters relating to school districts in Suffolk County . As a result, a 342-page report was issued this week exposing the many examples of fraud, waste and criminal conduct in our school districts due, in large part, to a lack of oversight as well as a lack of internal co
Most alarming was the Grand Jury finding that "vast amounts of public funds spent on compensation and fringe benefits to school administrators have remained largely hidden from taxpayers." The report also exposed how the public pension fund system was taken advantage of by individuals who "double dip." This unlawful practice occurs when a retired education professional returns to employment in public education and collects both a pension and a salary without obtaining the required waiver from the state to do so. The report disclosed that salaries earned in excess of the limitations imposed on retirees from the Teachers Retirement System totaled more than $3.1 million dollars for the period investigated.
These revelations are extremely disturbing, and such practices must be stopped if the taxpayer is ever going to stand a chance of keeping up with rising school costs. We encourage you, the citizens, to be involved. Attend school board meetings in your community and ask questions. The following are examples of questions you may find useful to ask at your next school board meeting.
1. What is the total compensation package of the district superintendent and top administrators?
2. Why are the salaries of administrators so high compared with other public sector employees?
3. Do fringe benefits paid to administrators include perks such as whole life insurance policies, yearly sick and vacation time buy-backs, car allowances and tuition reimbursement?
4. Does the district make contributions to private retirement accounts for administrators in addition to the contributions made to the New York State pension fund?
5. Does the district employ retired education professionals and, if so, have the necessary waivers from the New York State Retirement system been obtained?
6. What are the qualifications of the district's finance administrator(s)? Does he or she have a background in accounting or finance?
7. Do any board members have conflicts of interest (i.e., a family member employed by the district, board member employed by a vendor providing services to the district)? If so, although not required by law, these board members should be urged to recuse themselves when voting on issues on which they are not independent.
8. How much is the district paying for consulting services? Were they hired through a competitive bidding process? Has the district used the same CPA firm as its external auditor for more than three years? Did the board issue RFP's before hiring the current external auditor?
9. Has the board implemented the recommendations made in either the New York State Comptroller's audit, the district's external auditor's annual report or in the external auditor's management letters? Has the school board audit committee and/or the school board created a corrective action plan to address the Comptroller/auditor's recommendations. Have copies of the Comptroller's audit, the external auditor's annual audit report and the board's corrective action plan be made available to the public? If so, by what means? (For example, the school district's website, direct mailings to taxpayers or made available at the district office.)
10. Has the district formed an audit committee, as per new state legislation? Are any of the members CPAs or have a financial background? Do the members have relatives employed by the district or any other relationship that might infringe upon their independence?
11. Does the district have an internal auditor? If so, does the auditor report directly to the board? Note: per Education Law §2116-b, as of July 2006 all school boards must have an internal audit function.
12. Does the district have a whistleblower policy for protection of district employees that come forward to report fraud?
13. What oversight is there of grant funding to ensure that the monies are spent for the purpose intended? 14. Does the school district have a policy of requiring immediate notification to the appropriate authorities of any allegations of fraud, abuse, misconduct or criminal activity? If not, does the school district mandate the district conduct an internal investigation prior to reporting?
Taxpayers need to take an active role and insist that school boards operate more openly. Meeting agendas should be posted ahead of time and taxpayers should be provided ample opportunity during board meetings to ask questions. Districts' websites should provide relevant information, such as board meeting minutes, current budget, monthly expenditure reports, copies of employee contracts, the latest audit report, etc.
Access to this information will allow residents to be more informed and enable them to participate more effectively in public discussions concerning their school district's finances. A complete copy of the Grand Jury report is available on the District Attorney's website www.co.suffolk.ny.us/da/.
Joseph Sawicki, Jr. is the Suffolk County Comptroller. Thomas J. Spota is the Suffolk County District Attorney.