Inside: Business/Finance
Feb 1, 2005 12:00 PM
AUDITING THE AUDITOR
The New York State comptroller has issued a blistering report criticizing the firm that handled audits for a district where former administrators have been accused of embezzling funds.
Comptroller Alan Hevesi says that the work of Miller, Lilly & Pearce, the firm that audited the Roslyn School District, “was so appallingly inadequate that it would shock anyone associated with the auditing profession and certainly the taxpayers who depend on the firm to safeguard their money.”
Hevesi says his office's audit of the accounting firm determined that Miller, Lilly & Pearce “failed to identify millions of dollars apparently stolen by district personnel even after the firm was aware that fraud had occurred.”
Three ex-employees — former superintendent Frank Tassone, former assistant superintendent Pamela Gluckin and former accounting clerk Debra Rigano — face criminal charges for allegedly defrauding the district out of more than $2.3 million.
STRICTER CONTROLS
With two of its former administrators facing charges for stealing district funds, the William Floyd (N.Y.) School District has announced efforts to prevent similar misconduct from occurring again.
“We have strengthened our internal controls and employed an even more rigorous system of checks and balances,” says board president Vincent Pascale in a letter to district constituents. “We have only hired staff who have survived an intense and probing recruitment process. Backgrounds are checked, confidential recommendations from multiple sources are reviewed and fingerprints are submitted to the state for criminal history clearance. Our business office staff is cross-trained, and duties are segregated within the accounting department.”
The district, based in Mastic Beach, N.Y., has hired an independent internal audit firm to review every bill paid by the district.
Daniel C. Cifonelli, a former assistant superintendent for business, has been charged with stealing $687,850 from the district and the state's teachers' pension system. William Floyd's former treasurer, James Wright, has been charged with writing at least $700,000 in checks to himself from the district. District officials say they have recovered all the stolen money they are aware of.
SCHOOL FINANCE DEADLINE
The Kansas Supreme Court has ordered the state legislature to come up with a new school aid formula by April.
The ruling came in a lawsuit brought by districts that argued that the existing method of distributing funding to Kansas schools is unfair.
“The legislature has failed to meet its burden … to ‘make suitable provision for finance’ of the public schools,” the court says.
The decision notes that the state will need to boost funding for schools and devise a formula that allocates money more equitably.
“Increased funding may not in and of itself make the financing formula constitutionally suitable,” the court says. “The equity with which the funds are distributed and the actual costs of education … are critical factors for the legislature to consider.”
U.S. EDUCATION DEPARTMENT APPROPRIATION TOTALS
| 2004 discretionary funds | $55,661,673,000 |
| 2004 mandatory funds | $11,301,443,000 |
| 2004 total | $66,963,116,000 |
| 2005 discretionary funds | $56,577,424,448 |
| 2005 mandatory funds | $11,139,614,000 |
| 2005 total | $67,717,038,448 |
| Source: U.S. Department of Education | |
