NEW HANOVER: School district to fix financial accounts

Business administrator suspended after state probe

By Amber Cox
   NEW HANOVER — The Board of Education is working to correct deficiencies in its financial accounts following a state investigation revealing the district’s business administrator and board secretary was not performing the required duties of her positions.
   The investigation by the Department of Education, Office of Fiscal Accountability and Compliance Investigations Unit, reviewed the business practices of the district for fiscal year 2010.
   As a result, Business Administrator and Board Secretary Deborah Paone was suspended with pay Sept. 13, but as of Dec. 16, the school board certified tenure charges against her and subsequently put her on a status of 120 days without pay, according to Superintendent Brian McBride.
   The board adopted the corrective action plan at its Dec. 16 meeting.
   Kathleen Mandeville has been hired as the interim business administrator. She is the second interim after Patrick Collum, a retired superintendent from the Monmouth Regional School District, completed a 16-day contract with the district.
   Shortly after Mr. McBride was appointed as the superintendent in July 2010, he detected irregularities in the business office and contacted Burlington County Executive Superintendent Lester Richens, who contacted the OFAC requesting an investigation on the matter.
   According to the OFAC report, Ms. Paone:
   • Failed to enter complete information into financial reports; certified reports knowing the information was incomplete and/or inaccurate.
   • Failed to include all the required expenditures on the bill lists presented to the board for approval.
   • Removed numerous original documents from the district’s offices; failed to institute the requisite internal controls for the district’s business office.
   • Failed to prepare board meeting minutes for presentation; failed to provide the treasurer with requisite information.
   • Improperly used the treasurer’s stamp on reports presented to the board. Because of this, the board certified the sufficiency of funds based on inaccurate reporting by Ms. Paone.
   Allegedly, Ms. Paone issued monthly vendor checks and the semi-monthly payroll without recording the transactions to the district’s computerized financial system, according to the report. She also entered incomplete revenue and expenditure data into the district’s computerized financial system, therefore, the monthly bill lists approved by board resolution did not include all expenditures.
   The OFAC report also stated the district should review its contract with Ronald Ghrist, the chief financial officer of Wrightstown Borough, to ensure that, in the future, it will receive the services for which it has made payment. According to a state provision he, as treasurer, must provide the board with monthly reports giving detailed accounts of all receipts, expenditures and cash balances of the district.
   Mr. Ghrist did not prepare any of the treasurer reports that were presented to the board during July 2009 through May 2010, but he still was paid for his services during that time, according to the OFAC report. Also, the reports that were presented to the board were stamped with the treasurer’s signature, but Mr. Ghrist indicated in the OFAC report this was done without his knowledge.
   The CAP has a number of recommendations for the district to perform to correct any mistakes that were made through Ms. Paone’s work.
   First, a separate CAP had to be developed for proper business office procedures for data entry. This step will be ongoing until at least June 2011.
   The new plan will ensure issuance of accurate board secretary reports, reflecting proper recording of purchase orders and expenditures and the monthly certifications that are based on complete financial recording and reporting. This step also will ensure the issuance of a board secretary report for fiscal year 2010 and dissemination of that report to the county superintendent.
   The second area deals with the treasurer and recommends the district review the contract with the treasurer and ensure in the future it will receive services it has paid for. The district also should review payments made to Mr. Ghrist to ensure services were provided for those payments. Mr. Ghrist must be given access to the district records in order to prepare the monthly treasurer’s report.
   The CAP also recommends the board consider seeking restitution from the treasurer for the amounts he was paid.
   Ms. Mandeville also will review job descriptions and qualifications and establish new procedures for internal controls that mandate segregation of duties, according to the CAP plan.
   Previous board minutes will be reviewed and presented to the board for approval. Ms. Mandeville will establish a procedure for preparing minutes after board meetings take place.
   According to Mr. McBride, the district has hired Holman and Frenia P.C. accounting firm to reconstruct the 2010 financials.
   Holman and Frenia will re-create and enter transactions for the 2009-10 school year. He expects the findings of their report within the next week.
   The OFAC report is being referred to the New Jersey Department of Education, Office of Licensure and Credentials, for its review of Ms. Paone’s actions and to take whatever action it finds appropriate.
   It also is being referred to the Office of the Attorney General, Division of Criminal Justice, to determine if criminal charges need to be filed.