September 21, 2005
Audits of Schools' Finances to Extend Throughout State
By BRUCE LAMBERT, NY TIMES

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GARDEN CITY, N.Y., Sept. 20 - State auditors, who for two decades ignored the 700 school districts outside New York City, will now scrutinize all of them, the New York State comptroller said Tuesday. A multimillion-dollar fraud case in the Roslyn schools prompted the new audits, said the comptroller, Alan G. Hevesi.

Based on early findings, Mr. Hevesi predicted that his staff would uncover minor problems as well as serious waste and corruption.

Underscoring the project's potential for uncovering misconduct, Mr. Hevesi was joined at a news conference here by Nassau County prosecutors. They announced another indictment involving the beleaguered Hempstead schools, which the state criticized in a scathing audit released on Monday.

The latest charges in the Hempstead case accuse a contractor of bribing a school board member. Hempstead is one of 23 districts on Long Island that Mr. Hevesi's office picked to audit after the Roslyn scandal came to light last year. He said his staff was half finished with those audits, which represent the first phase of the statewide effort.

For about 20 years, school districts outside New York City have operated without the oversight of state audits, the result of staff cuts in the state comptroller's office. State officials have said they hoped that a state requirement that districts hire an outside accountant would suffice to protect public funds.

But Mr. Hevesi said the absence of state oversight fostered sloppiness and even crime. "I find that if there is no watchdog, the amount of mismanagement will increase dramatically," he said.

Citing the Roslyn case - in which the district's former superintendent, former business manager and former accountant have been indicted on charges of defrauding the district out of $11 million - Mr. Hevesi called for an expansion of his staff to revive school audits.

So this year, the State Legislature approved the hiring of 89 auditors at a cost of $5.8 million a year. With the expanded staff, Mr. Hevesi intends to audit all districts outside New York City within five years, and to follow up on a rotating basis. The state is also training school officials on how to avoid and detect waste and corruption.

The Roslyn case also sparked numerous tips to prosecutors and auditors from suspicious taxpayers and school insiders. One letter to Mr. Hevesi, signed by more than a dozen people, complained about the Patchogue-Medford district in Suffolk County.

"We had a lot of whistle-blower calls, people calling and saying, 'Look into my district for the following reasons,' " said Mr. Hevesi's spokesman, David Neustadt.

So far the audits and investigations have resulted in indictments in seven Long Island districts, with other investigations pending. This week, Suffolk County impaneled a special grand jury on school corruption.

On a positive note, the audits also showed that many districts had good practices. For example, the North Shore district in Nassau has "very good management," Mr. Hevesi said. And some districts have relatively minor problems, like a lack of rules on the use of cellphones paid for with school funds. But the latest indictment was far more serious. It accused John Finn, a consultant from Ann Arbor, Mich., of bribing a Hempstead school board member with $10,000 and a sofa and love seat worth $781.91.

Nassau County's district attorney, Denis Dillon, said the board member, Thomas Parsley Jr., took the bribe in 2003 to change his vote and reinstate Mr. Finn's canceled contract. Mr. Finn's service, Dads Are Doing Something, encourages fathers' involvement in their children's education. The district paid $100,000 a year for the program.

Mr. Finn, who is also charged with creating false documents to conceal the bribes, pleaded not guilty and has been released on his own recognizance. His lawyer, Donald Schechter, called Mr. Finn a nationally recognized educator and said he was being made a scapegoat.

Mr. Parsley, recently removed from office upon his conviction for stealing a principal's A.T.M. card and withdrawing $500, also faces a second charge of misusing school funds. But he has not been charged in the bribery case, and prosecutors hinted he was cooperating with them.

"We do expect additional arrests," Mr. Dillon said.

Upstate districts where state auditors have started to scrutinize the books include Catskill, Mount Vernon, Sullivan West and Windham-Ashland-Jewett.

Report on the Corruption in the Hempstead Union Free School District, Long Island, New York

Advocacy Works. The New York State Education Department Wants Information on Fraud For a New Audit

Syosset NY Kids' Lives are Worth Alot of Money -the Superintendent is the Highest Paid in the State of New York

Corruption in Roslyn Long Island: Andrew Miller, Auditor, is Charged With Covering Up $11 Million Theft