FOR RELEASE:

Hevesi Audit Finds Two Former Voorheesville School District Administrators Improperly Paid Themselves $216,000

District Aggressively Taking Steps to Recover Money;
Findings Referred to Albany County District Attorney’s Office

The former Voorheesville school district superintendent and assistant superintendent inappropriately paid themselves $216,000 for leave and other employment benefits, New York State Comptroller Alan G. Hevesi said today. Voorheesville district officials announced today that they have filed a civil lawsuit based on the Comptroller’s findings to recover the funds. The Comptroller’s audit findings, as well as the results of the district’s own investigation, have been referred to District Attorney David Soares for review as a possible criminal matter.

During a routine audit of district finances, auditors found:

• Questionable payments to former Superintendent Alan McCartney for $127,338 from August 1989 to July 2005 and to former Assistant Superintendent for Business Anthony Marturano totaling $89,069 from January 1991 to August 2002.
• Of the $216,000 identified, $167,000 of the payments were for benefits that they were not entitled to, including payments when the administrators appeared to be traveling for personal reasons in Las Vegas, Chicago and Nashville, and an instance when the former superintendent gave himself compensatory time for showing up on a snow day, when all other business office employees are either required to work or take vacation time. The remaining $49,000 was paid without proper notification or documentation or were made under inappropriate clauses in their employment contracts.
• The two officials authorized virtually all of these payments to themselves without the knowledge or approval of the board of education.

Auditors notified the district of their preliminary findings, and the district immediately began its own investigation. Based on these findings, the district began efforts to recover the misappropriated funds. The audit, which began in late August 2005, is expected to be complete in summer 2006.

“This was blatant abuse of taxpayer dollars and manipulation of weak internal controls by two individuals at the top who were entrusted to safeguard these funds. Their actions are deplorable and resulted in a considerable financial loss for the school district,” Hevesi said. “I’m pleased that the Voorheesville school board has taken action to ensure that this money is recovered and has pledged to institute meaningful changes to improve oversight of senior officials in the future.”

Voorheesville Board of Education President Joseph F. Pofit, who became President in July 2005, said “The Board is outraged that former officials would purposefully manipulate people and internal controls in order to enrich themselves.  The board and the current administration are unified in their commitment to pursue whatever actions are necessary with impeccable integrity.  We are appreciative of the professional working relationship with the Comptroller’s Office and are determined to redress this breach of the community’s trust.”

Among the $216,000 identified:

• Overpayments for Unused Vacation Time.  The two men’s contracts limit how much they can be paid for vacation time they did not use. The superintendent was paid $84,283 more than his contract allowed, and the assistant superintendent was paid $35,968 more than allowed.
• Failure to Charge Vacation Time for Time Out of the Office.  One way they built up unused vacation time was by taking days off, but not listing them as vacation days. That way they would receive regular pay for a day not worked, and also request payment for a vacation day not used, in effect getting paid twice for one day not worked. After reviewing district cell phone records, auditors found that McCartney (or his district-issued cell phone) was out of town at least 16 days on nine separate occasions, including in Las Vegas and Boston, when he did not charge leave time or have approval to be out of town for district business. The superintendent collected $7,435 in salary for these days. In addition, calls were made from Marturano’s district-issued cell phone from Chicago and Nashville on one day, but he did not charge time nor was he approved to travel for school business. He was paid $372 for this time.
• Unauthorized Leave Benefits.  McCartney and Marturano both claimed reimbursement for compensatory time that was not permitted under their employment contracts. For example, on snow days when schools are closed, the central office remains open and employees are required to work unless otherwise directed. McCartney worked on a snow day and then claimed reimbursement for comp time, thus receiving two days pay for one day of work. The cash value for this comp time was $7,268 for McCartney and $7,482 for Marturano.
• Inappropriate Stipend and Personal Leave Payments.  $20,000 was paid to Marturano for unused sick time for his final three years of employment, on the condition that he retire by a set date or repay the money. He failed to retire within the required time period, but did not repay the money. McCartney’s employment contract no longer provided him with personal leave, but he still charged $4,397 worth of personal leave time.
• Failure to Notify Board about Taking Pay for Unused Vacation Payments.  Another $19,455 in unused vacation time was improperly cashed out by the superintendent, and $17,610 was paid to the assistant superintendent. McCartney generally sent his payment requests directly to the payroll clerk, who processed the papers. McCartney then approved the payrolls containing his own leave payments. Marturano generally made his requests to McCartney, who approved them. While these payments were allowed under their contracts, they were required under their employment contracts to report these payments to the board and they failed to do so. If the board had knowledge of these payments, they could have played a role in subsequent contract negotiations
• Improper Employment Contract Provision.  $4,500 was paid to the superintendent for annuity and disability insurance benefits that were not permitted under the State Education Law.
• Reimbursement for Undocumented Claims.  Marturano was allowed to receive reimbursement for money he paid out for annuity and disability insurance benefits, but he was required to document those expenses.  He received a $7,637 reimbursement from the district even though he did not submit documentation showing he made the required payments.

Based on the State auditors preliminary findings and the district’s own independent investigation, the board through legal counsel in December 2005 sent letters to McCartney and Marturano seeking repayment of funds with interest. No payment has been received, so the board today filed a civil lawsuit to recover the funds. District officials will meet this week with the District Attorney’s Office. In addition, the board has conducted a comprehensive review of internal controls over benefits provided to employees. For example, the district now requires its audit committee to monitor the superintendent’s attendance and leave usage.

Auditors’ recommended that the district continue to aggressively pursue collection of these payments. In addition, the district’s audit committee should develop written procedures detailing how it will monitor administrative leave benefits, which should also be adopted by the board. The current superintendent should ensure that all leave benefits provided to employees are in compliance with employment contracts and board policies. Finally, auditors recommended that the district’s attorney review any written employment contract prior to approving agreements.

McCartney, who worked at the district for 16 years, was paid $141,400 for the 2004-05 fiscal year, his final year. His health insurance benefits were fully covered by the district, and he received 35 days of vacation, 15 days of sick leave and a $1,500 reimbursement for annuities or disability insurance. An 11-year employee at the district, Marturano was paid $95,967 during the 2001-02 fiscal year, his final year. Ninety percent of his health insurance benefits were covered by the district, and he received 30 days of vacation, 15 days of sick leave and a $1,500 reimbursement for annuities or disability insurance.

All school districts, BOCES and charter schools must be audited by the State Comptroller’s office in the next five years under a new State law passed after financial scandals erupted at several Long Island school districts. Voorheesville is one of the first upstate schools to be audited as part of this effort. Sixteen other school audits are underway or will be soon in the Capital Region, including: Berlin, Berne-Knox-Westerlo, Broadalbin-Perth, Canajoharie, Corinth, Galway, Hoosic Valley, Jefferson, Niskayuna, Ravena-Coeymans-Selkirk, Schalmont, Schuylerville, Scotia-Glenville, Stillwater and Troy.

The Voorheesville school district, with 1,270 students and approximately 235 staff, has a budget this year of $19.3 million and operates two buildings.

Click here for a copy of the audit report.

Click here for a listing of school audits underway

Click here for the Five-Point School Financial Accountability Plan

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