Politics is local and we can have the most impact on our school boards

Your superintendent is the highest paid, most powerful public official in the municipality. Do you know his name?

Elected board members, although well intentioned are easily led by their paid employees; teachers & administrators.

Do you know what they're all doing? Well here in New Jersey they represent at least 60% of your property tax bill and budgets grow at an astounding compound rate each year.

Thursday, November 25, 2010

Accounting controls UPDATED!! with voice

As a young accountant I witnessed a billing fraud that illustrated the importance of accounting controls. Briefly, an accounts payable clerk was able to establish a fictitious vendor, circumvent normal disbursement procedures and steal from the organization. Interestingly the vendor name was AJS Corp. and when authorities arrived they headed straight to the Controller, Anthony J. Speranzo; a planned diversion allowing the A/P clerk to slip out the back door. A very embarrassed management team quickly developed the proper controls it should have had all along; separate purchasing, receiving, authorization, and cash disbursement responsibilities.

Kickback schemes, although similar are far more difficult because they are usually created in secret between an actual vendor and a dishonest employee; i.e. vendor invoice terms will agree with purchase orders and paperwork matches perfectly.

The only characteristic that red flags such fraud is inflated invoices to cover the kickback. The RTBOE should raise an eyebrow over the quick drop in the solar project cost estimate. On November 3 the public was told $3.5 million but two weeks later, after a little public scrutiny the estimate dropped to $2.6 million. Market fluidity was given as the reason but it seems to me that our sales guy, Frank Moore blinked and cut the price 26% to save the sale....or if the market is so fluid, let's wait another couple of weeks. If not, why the 26% price cut? Organizations should routinely compare quoted prices with the market.

Currently, our school district relies on one person to seek the best prices. authorize receipt of services and disburse cash. In addition, that employee enjoys unquestioned support from the board.

Now the RTBOE is giving Business Administrator, James Verbist (that employee) womb to tomb authority over a multi-million dollar solar program. Can Verbist be trusted? My opinion doesn't matter but the RTBOE owes it to this community to be certain.

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