BOE hires counsel to investigate alleged misuse of funds

Photo Courtesy of WOSD
Gregory Elementary School

WEST ORANGE, NJ — The Board of Education approved a resolution at its June 4 meeting to hire a third-party law firm to investigate allegations made by members of the public that a Gregory Elementary School employee improperly used student funds to pay her personal property taxes in 2016. The resolution was passed to “ensure a complete, thorough and impartial review” of the situation, according to the resolution.

The incident was brought up by Thomas Volscho, a parent with two children in the district, one at Gregory and one at Edison Middle School, at the May 21 BOE meeting. Micaela Bennett, the parent of a student at St. Cloud, revisited the incident at the June 4 meeting, alleging an embezzlement cover-up by Superintendent of Schools Jeffrey Rutzky, saying he did not inform the BOE of the incident.

The financial transaction in question took place Jan. 29, 2016, when, according to district records, a Gregory employee used the school’s student activities account to pay $2,764.40 in property taxes to Millburn. On March 28, 2016, Rutzky, acting independently of the Board of Education, sent a letter to Millburn Chief Financial Officer Jason Gabloff requesting a refund of the payment, citing an error and asking that the check be made payable to the Gregory School Fund.

The Millburn Township Committee approved a resolution to return the funds to the West Orange School District on April 16, 2016, and the money was refunded April 26, 2016.

According to the school district’s audit report from June 2016, the financial transaction in question was reported to the BOE and presented at the Dec. 12, 2016, meeting. The item, however, was not highlighted to the BOE; it was simply one line among 600. At the same meeting, the BOE also adopted a “corrective action plan” that had been presented by the auditor; the plan elucidates how school financial records should be kept and how the schools should issue checks for purchasing.

In an email to the West Orange Chronicle on June 11, Volscho expressed concern that the employee in question is still an authorized staff member on Gregory’s student activities account.

“I showed this to several certified fraud examiners and they explained what generally happens in such cases. The minimal consequence is to take the person off the account,” Volscho said. “Often what happens, if a person makes such a mistake, is that they pay the money back from their own funds immediately upon learning of the mistake. Additionally, an extensive accounting investigation is often warranted.”

Volscho said he fears this is not the only case of improper use of funds in the district, and said he finds the lack of oversight from the BOE disheartening.

Bennett is also dissatisfied with how Rutzky asked for the refund. She told the Chronicle in a June 8 phone interview that she believes the superintendent has been unresponsive in the past about investigating school incidents, and that the employee should no longer have access to the account.

“There must have been some justification for that, when he decided to keep her at the school,” Bennett said. “I have no desired outcome, but I think people should be held accountable for their actions and this person should not have access to the funds.”

In a phone interview with the Chronicle on June 8, BOE Vice President Mark Robertson said the board learned about the misuse of funds when the auditor presented it in the report in December 2016; he said, however, that the auditor did not go into the error — the board was only aware that there had been an error that had been rectified. According to Robertson, the incident is being investigated now to confirm that report.

“The public brought a number of things to the board and the board said we would look into everything to make sure there is no conflict and make sure there is transparency,” Robertson said.

Because the employment status of the staff member is a personnel matter, Robertson said he could not comment on it.

“The board knew what was in the report and took notice of it at the time,” he said. “The investigators will come back and report what they find. The public gave us their concerns and we want to do our due diligence and have it investigated.”

Robertson said any accusations of a cover-up are unfounded and that neither Rutzky nor the board did anything to hide the incident.

“The board has never covered up anything,” he said. “If something appears in an audit, the board discusses it. But there’s no evidence of a cover-up. We’re doing our due diligence to preserve the public’s trust. The board takes all matters that the public brings up seriously, and we will continue to do that by investigating and responding to the public’s concerns.”

Rutzky did not return multiple requests for comment. BOE member Sandra Mordecai told the Chronicle in a June 8 email that questions should be directed to BOE President Ron Charles, who did not return a request for comment. BOE members Ken Alper and Irv Schwarzbaum also did not return requests for comment.

The legal counsel investigating the alleged embezzlement is Chiesa, Shahinian & Giantomasi, headed by Jeffrey Chiesa, the former state attorney general. Robertson said there is currently no timeline for when the investigation will be completed.

Editor’s Note: This article was updated to clarify what the Board of Education knew and when.