NEW JERSEY legislators, educators and parents have renewed their calls for overhauling the state's school financing system after court-ordered audits found questionable spending and accounting practices in the poorest school districts.

The audits cited numerous problems in Camden, Newark, Jersey City and Paterson, despite years of state oversight. The districts were the first of the 31 so-called Abbott districts to be audited under an order by the New Jersey Supreme Court. These school districts are among the state's poorest and have received $35 billion in state aid since the state Supreme Court ruled 10 years ago that the poorest urban districts should be given the resources to spend as much on their students as the wealthiest suburban districts do.

The audit findings, which were released Tuesday by state education officials, included school employees in Camden and Jersey City who remained on the payroll after they had died, a $1,000 florist's bill for poinsettia plants at a board meeting in Jersey City and $3,080 for Newark school employees to attend a teaching job fair in Puerto Rico.

In recent months, a growing number of critics have called for changes to the school financing system, saying it has wasted millions of dollars in the Abbott districts while shortchanging others. Assemblyman Bill Baroni, a Republican from Hamilton, said the audit findings would only fuel more criticism.

"It is very hard to make the argument that the Abbott program is working when administrators are going on junkets," he said. "That money should be going to students, classes and teachers."

Lynne Strickland, the executive director of the Garden State Coalition of Schools, which represents parents and school officials, said, "In large districts, there is a lot of room for things to get lost in the shuffle, and the audits made clear that is the case and things have to be tightened up in a large way."

State legislators have been working on a proposal for a new formula for state aid to school districts. Senator John H. Adler, a Democrat from Cherry Hill who is leading the effort, said he expected the proposal to be finished in the next few weeks.

David G. Sciarra, the executive director of the Education Law Center, which represents the children in the Abbott districts, criticized the State Education Department for releasing the audits without giving the school districts an opportunity to explain or clear up any questionable expenses.

"You have to wonder what the department's purpose was in releasing the audits in this form," he said. "Was it actually to help the districts do a better job or to publicly criticize them?"

Lucille E. Davy, the education commissioner, said that the districts were given a chance to respond to the audits and that they would continue to be held accountable for their expenses in the future.

"In all honesty, when you look at some of the expenditures of money, there are people making poor judgments about the public money," she said.

Philip E. Freeman, the president of the Camden Board of Education, said he planned to call a special meeting in the next week to address the problems at the Camden schools.

"I have grave concerns about the numerous examples of mismanagement," he said. "And serious concerns that these things were not brought to the attention of the board previously."

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2-5-07 Davy Establishes DOE Office of Fiscal Accountability and Compliance,
Appoints State Monitor for Paterson

In a move to increase the Department of Education’s capacity to provide better oversight of the expenditure of state education funds, Commissioner Lucille E. Davy today announced the consolidation of DOE’s compliance investigation and fiscal auditing units, creating a new Office of Fiscal Accountability and Compliance.

The new unit will be headed by New Jersey State Police Major Robert J. Cicchino, who is retiring from the NJSP to accept this position.  He is currently the Commanding Officer of the State Police Office of Professional Standards.

Commissioner Davy also announced that she has appointed Mark S. Kramer, a CPA and former school business administrator in East Orange, to be the State Monitor in the Paterson School District.

“Governor Corzine has made it clear that there must be more accountability in the way that school districts spend public dollars, and the Department of Education needs to lead that effort,” Commissioner Davy said.

“We have now appointed state monitors with broad powers to help address the problems in the fiscal operations of four districts, and we will appoint additional monitors in the future.  At the same time, we are strengthening the department’s own investigative and auditing abilities by bringing all of the department offices that have a role in this function together under one roof,” the Commissioner said.  

“I expect this unit to work more closely with other state law enforcement agencies to address possible criminal wrongdoing and I am very pleased that Bob Cicchino has agreed to lead this operation.  His distinguished law enforcement career includes extensive experience in overseeing investigations and audits and he will bring a new level of expertise and organization to the department’s efforts in this area,” Commissioner Davy said.

The reorganization will be effective March 1.  Cicchino’s title will be Special Assistant to the Commissioner for Fiscal Accountability and Compliance.

The new office will consist of auditors from the Division of Finance and the existing Office of Compliance Investigation, which includes an investigations unit, a criminal history review unit, a grants audit unit and an internal audit unit.

During his 29-year career with the State Police, Major Cicchino has served as a detective in the Intelligence Bureau, as a Sergeant in the Management Review Unit and as a Sergeant and Lieutenant in the Emergency Management Section.

He also supervised the Transportation Unit in the Logistics Bureau and was the Bureau Chief of the Narcotics and Organized Crime Bureau and the Executive Officer of the Investigations Section during the three years prior to assuming command of the Office of Professional Standards.

A graduate of Rowan University, he holds a masters degree in education from Seton Hall University and also attended the Northwestern University School of Police Staff and Command.  He has attended numerous training seminars and workshops on all aspects of law enforcement and management.  He resides in Blairstown.

Under the “School District Accountability Act” signed by Governor Corzine last year, the Commissioner of Education may appoint a state monitor in districts where serious fiscal deficiencies have been identified in the district’s annual audit. 

Commissioner Davy noted that Paterson’s 2006 annual independent audit identified more than ten repeat findings from the previous year and the number of audit findings had increased.  Of particular concern were the district’s lack of controls over payroll and purchasing, and non-compliance with federal requirements.

In addition, the Paterson KPMG audit released last week identified 101 weaknesses in internal controls, including a lack of written policies and procedures necessary to accurately report payroll and accounts payable transactions, the failure of the staff to properly review or approve financial transactions, a large number of purchase orders that exceeded the purchase order amounts by more than ten percent, numerous questionable costs and serious concerns over payroll processing and inaccurate or missing documentation.

Kramer, the new State Monitor in Paterson, worked at DOE for the past 18 months as part of a governmental employee interchange agreement.  He served as the liaison between the Abbott district school business administrators and the DOE Division of Abbott Implementation, reviewing and negotiating district budgets.

“During the time that he has been with DOE, I have relied on Mark’s intelligence, integrity and understanding of the fiscal operations of urban school districts.  He is uniquely equipped to address the problems in Paterson,” Commissioner Davy said.

Kramer has worked in the East Orange School District since 1992.  He also worked as an auditor and supervisor at Ernst and Young.   He is a graduate of Pace University and is a certified public accountant.  He also holds certifications as a school business administrator and qualified purchasing agent.

A resident of Hampton, NJ, he is a member of the Bethlehem Township Board of Education.  He is a former president of the Essex County Association of School Business Officials and a member of the Board of Education Subcommittee of the New Jersey Society of Certified Public Accountants. 

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