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August 15, 2007

DiNapoli Audit Finds $1.2 Million of Questionable Spending
by Former Superintendent at Poughkeepsie City Schools

School Board Initiates Corrective Action
Audit Findings Referred to Dutchess County DA

Poughkeepsie City School District’s former superintendent circumvented internal controls to allow for $1.2 million in questionable expenditures, including four newly created positions and improper payments to administrators and contractors, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“The improprieties of one individual put more than $1 million dollars of taxpayers’ money in jeopardy,” DiNapoli said. “School districts must closely monitor their finances so that officials cannot use public resources to benefit themselves and others.

“The Poughkeepsie City school board and its new administration are taking appropriate steps to recover taxpayer dollars that were misspent on payments to the former superintendent, other administration officials and contractors,” DiNapoli continued.

“The board of education and I are striving to implement better internal controls and more effective and efficient hiring procedures so that the district will avoid any improprieties, such as those described in the Comptroller’s Report,” said Dr. Laval S. Wilson, the current superintendent of the Poughkeepsie City School District.

Inappropriate Compensation
The audit discovered some employees, including the former superintendent Robert Watson, were granted additional compensation or benefits totaling $204,000 without proper authorization. In several cases, Watson overrode existing controls or circumvented contractual requirements so the payments could be made.

These inappropriate payments included:

  • $104,883 in inappropriate retirement incentives to two employees
  • $46,742 in unauthorized extra payments to ten administrators
  • $21,768 in questionable overtime payments to the parent/community liaison
  • $16,000 in longevity payments to a principal with less than five years service at the district
  • $9,433 to Watson for 15 personal days he was not entitled to
  • $5,862 to a former assistant superintendent for 12.5 personal days she was not entitled to

Questionable Contract Procurement & Payments
Upon Watson’s recommendation, the board rescinded the appointment of an experienced construction management firm and hired a firm that the district’s consulting architect previously deemed too inexperienced to handle a $27 million project. During the course of the audit, board members said Watson did not inform them of the architect’s concerns about the inexperienced firm.

The audit found $224,867 in questionable payments to the construction management firm that lacked supporting documentation. Watson also provided misleading information to the board concerning the payments. The audit found Watson told board members that the director of facilities reviewed and approved the payments when, in actuality, this had not occurred.

The audit also questioned the propriety of $110,094 in payments to two other consultants for professional services, which also did not go through the request for proposals process.

Job Vacancies
The audit found Watson failed to consider other candidates when filling four newly created positions, breaking district policy. The district paid these individuals nearly $723,000. The district’s files indicated at least five candidates were interviewed for each position. However, auditors contacted several of the candidates and none of them were interviewed for the positions. The board eliminated these positions in the 2006-07 budget.

Weak Internal Controls
The audit also found the board’s weak oversight and failure to ask appropriate questions or request appropriate documentation for many of the payments allowed Watson to circumvent board policies.

The audit made 15 recommendations to the board and district to enhance internal controls and fiscal accountability. DiNapoli’s office referred the findings of the audit to the Dutchess County District Attorney’s office.

The board hired independent forensic auditors in 2005 and 2006. The board also revised several of its policies. The district agreed with the audit’s findings and the district’s full response is included in the audit.

School District Accountability
State Comptroller Thomas P. DiNapoli requested and received an additional $2.7 million in 2007 to hire more staff to audit schools. In order to improve accountability of the state’s schools, the State Comptroller’s office will audit all of New York’s 832 school districts, Board of Cooperative Educational Services (BOCES) and charters schools by 2010. The State Comptroller’s office has completed more than 225 school audits and approximately 200 audits are currently underway.

Click here for a copy of the audit.



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