The Dolan Company
October 22, 2010
School fund mismanaged in Mount Sinai
By David Winzelberg
LONG ISLAND, NY -- Teachers profited from the mismanagement of thousands of dollars in student activity funds in the Mount Sinai school district, according to a new report from a forensic accounting firm.
One former Mount Sinai teacher worked for a travel agency that billed the student fund nearly $750,000 for annual senior trips to Orlando since 2005. About 600 students went on the trips over the five years. Twelve teachers received more than $1,000 each for chaperoning the 2009 trip to Florida and a current teacher who moonlights as a deejay got more than $12,000 from the student fund for his deejay services.
The investigation by Kessler International in Port Jefferson Station that discovered the alleged financial anomalies and lack of proper accounting was prompted by the complaints of a Mount Sinai High School student, who believed students were overcharged for a senior trip to Disney World. The students paid $1,300 for the four-night trip, which included airfare and meals, but they had to sleep four to a room with only two beds. That's about 40 percent higher than the package price for a family of four, factoring in costs for buses and chaperones.
Kessler International chief Michael Kessler said his firm's investigation found the student fund overpaid trip organizer Northfork Travel by more than $8,000, and paid one teacher for 39 hours of chaperoning when he only submitted a bill for 26 hours. Kessler also found that there was no bid process used and no shopping for services that wound up being provided by companies with ties to current and former teachers.
But Mount Sinai Superintendent Anthony Bonasera said there's no requirement for bidding out services because the money is not considered school funds. "None of this is taxpayer money," Bonasera said. "It's the students who raise the funds."
Bonasera said the student activity fund is audited every year and nothing has been found to be out of compliance. He said the state comptroller spent two and a half months going through the school district's books about three years ago.
The results of Comptroller Tom DiNapoli's audit, released in 2007, found that the district's purchasing policies and procedures don't require the use of requests for proposals for professional services. DiNapoli reported that the school district didn't solicit competitive proposals for a professional service provider who was paid $319,399 for therapy and special education services during the fiscal year 2005-06. The comptroller's audit also showed Mount Sinai didn't have a written contract with a provider that was paid $23,050 for tutoring services during the same period.
"The failure to adopt and implement comprehensive purchasing policies and procedures relating to the procurement of professional services results in district officials not having adequate assurance that these services were obtained in the most prudent and economical manner," the report concluded.
In light of Kessler International's report, Bonasera said he would speak to the students and advisers that manage the activity fund about their process, but he insisted that Kessler's findings make it sound like it's a cabal.
"It looks worse than it is," Bonasera said.
Kessler's report also found that the school district failed to issue 1099 forms to vendors who received thousands for the prom and student trips. Kessler said he's forwarded a copy of the Mount Sinai report to the Suffolk County District Attorney and DiNapoli's office for further review.
"This is one small part of the annual budget in one school district," Kessler said. "Are other teachers lining their pockets with no-bid contracts and invoicing districts for tens of thousands of dollars without supporting documentation?"