Reprinted from AMBOY BEACON,
Wednesday, Aug. 4, 2010
PERTH AMBOY — The theft of $2,593,400 from the Perth Amboy school district over nearly six years, for healthcare-related programs that never existed, occurred because of “a mastermind scheme” in which “funds were diverted from our health-benefits account” by people with “superior knowledge” that “was, for all intents and purposes, undetectable” because it was “designed to avoid detection.” So said Board of Education Attorney Victor Medina last week, after he was asked by Board President Samuel Lebrault to discuss the recent “criminal matters” involving Frank Cotroneo, 59, a Bernardsville insurance broker who has admitted that he bilked the Board out of those funds, and allegations in an indictment handed-up by a State Grand Jury two days later charging brokers Francis Gartland, 69, of Baltimore, MD; Brian Foley, 36, of Summit and two of Gartland’s companies, Gartland & Co. Inc. and E-Administrative Systems Inc., with participating in the same alleged scheme. Cotroneo also agreed to pay restitution of $2.6 million to the Board, along with a Public Corruption Profiteering Penalty (PCPP) of $2.9 million. Professionals working on the district’s behalf “had looked-over everything and were sure that everything was Kosher,” Medina said. “Nobody could find what had occurred; couldn’t find what they did — that’s how-well they covered their tracks.” On the other hand, the Board Attorney said that “the district has made a number of changes in its procedures so this can’t happen again,” so that there is “a limited opportunity for any other entity or individual to hide what they’re doing.” As “one of the additional steps” to protect the school system from similar problems in the future, the Administration was proposing to the Board “to bring-in an additional auditor to look-over our controls and procedures” to further guard-against “a violation that should never be allowed to happen again,” Medina said. However, Board members unanimously agreed to table a Resolution that would have awarded a $40,000 contract to Nisivoccia & Co. LLP “to perform an audit of procedures and internal controls.” The motion to table the Resolution was made by Obdulia “Obi” Gonzalez, seconded by Mark Carvajal and adopted 9-0. Prior to the vote, questions were raised about the scope of the proposed audit and why there was only one response to the Request For Proposals (RFP). “Is this a forensic audit or a general audit?” member Israel Varela asked. “Couldn’t we have someone actually go in and examine this in-depth?” “This is not going to be a normal audit,” Board Secretary/Business Administrator Derek Jess replied. “This is a controls audit,” Lebrault said. “How did we select who does the audit?” member Milady Tejeda asked. “We asked for proposals from any company that does this,” Jess responded. “The proposal was what we needed.” “How many companies did we get?” Tejeda asked. “One,” Jess replied. “I would like to see more than one,” Tejeda said. “Why couldn’t we put it out for rebid?” Gonzalez asked. “The Board can’t control how many people respond, so you cannot reject a bidder just because there’s only one bid,” Medina stated. “If you decide to reject an otherwise-qualified bidder, that subjects the Board to a possible legal challenge.”The Board’s only alternatives, he said, are to “abandon the project entirely or find that a mistake was made in the specs (specifications).” “Can we broaden the scope of the audit?” Rodecker asked. “The Board can pull and rewrite it, or issue a change-order,” Medina said. “If applicable, it could require an additional expenditure of funds, with Board ratification.” “I’m a little confused myself,” Board Vice President Kenneth Puccio said. “It’s unbelievable that, in this economy, only one company responds. “It would behoove us to get more than one bid,” he added. This is NOT the first time I’ve seen one bid. Something seems wrong; maybe we need to change the way we advertise. One bid doesn’t cut-it for me.” “Maybe we should table this,” Gonzalez suggested. “We need to be aware of the scope. If a ‘mistake’ is part of it, that might make it cost more.” “We’ve been under the microscope for the past year or so,” Puccio noted. “We’re taking a lot of heat for things that happened before any of us sat up here.” “It’s not a ‘mistake,’ but maybe the Board wants to substantially-expand the scope of this audit,” Lebreault said. “Believe me, I want this to be done the right way.”On the other hand, under “New Business,” the Board voted unanimously, on a motion by Kurt Rebovich Jr., seconded by Puccio, to appoint Medina — with no contract or even an item on its agenda — for “initiation of the recovery effort” to secure the $2.6 million. Armando Tamargo, who was appointed to the Board earlier that night, urged his new colleagues not to pass-judgment on those who were tricked by outsiders. “We own this now; we’re not looking-back,” he stated. “We can set the standard going-forward.”However, some audience speakers were not so charitable toward the Administration.“It wasn’t impossible to find or to detect,” resident Alan Silber said of the stolen $2.6 million. “It happened at the same time the teachers were being asked to contribute one-and-a-half-percent for their healthcare.” He noted that Gartland has “contributed thousands of dollars to political campaigns, including $18,000 to our ex-Mayor (indicted former Mayor Joseph Vas).“Someone who sat there (on the Board) was convicted of a crime, and some of his unindicted co-conspirators sat there and praised him,” Silber said. “I would be amazed if our Superintendent actually did something-wrong, but he
has to be held-accountable.”City Council President Kenneth Balut claimed vindication after questioning
the insurance investigation for months “and being stonewalled.“Somebody should watch what’s going-on,” he declared. “They throw elaborate parties down there (at the N.J. School Boards Association convention) in Atlantic City. Where do you think that money was coming-from?” Balut criticized “the lawyer appointing himself to investigate,” adding, “Maybe you should get a new lawyer. “Was it rocket-science what they did? ‘Elaborate’? No way! Somebody should have looked at the checks,” he said.“In the real world, if $3 million is stolen, somebody’s got to go, somebody’s got to be fired,” resident Victor Coronado declared. “This is totally-unacceptable. “The new Board has a golden opportunity, with the high school Principal resigning (retiring) and the Superintendent’s contract possibly not being-renewed, to make serious changes,” he continued. “Ultimately, your job is to hold the Superintendent accountable, and you’ve got to get the most-qualified guy in-here. “I’m a big believer in parental-choice, and there’s a bill right-now in the Legislature to give money to the parents instead-of to the districts,” Coronado added. “I’m as ‘left’ as they come, and I find myself agreeing with Rush Limbaugh on something.” In a lighter moment, Perth Amboy High School Class of 2011 President Janibell Rodriguez and Vice President Vanessa Garcia came to the podium to request that the Board reconsider its earlier unanimous vote tabling a Resolution to approve the Senior Class Trip to Orlando, FL, at no cost to the district. Rodriguez said the Class was able to secure a price of $447-per-student,“which went-up $7 since June.” Puccio and Carvajal, who had earlier moved and seconded tabling the measure, moved to “untable” it, and then moved to approve it, both times with unanimous Board support.
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