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.

Wednesday, February 2, 2011

Siphoning Funds II

What we know is that funds were transferred from the 2009-2010 school year to the current in direct violation of generally accepted accounting principles (GAAP) as well as Department of Education directive.  What we don’t know is how much was moved or if the DOE will take corrective action.

On How Much Was Siphoned:


So far, only the county attempted explanation.  Regarding an encumbrance of $212,055.47, Interim County Executive Business Administrator, Ralph Goodwin wrote:

“Severance pay for administrators in the amount of $212,055.47 was encumbered by the district as a result of notice provided by two administrators of their intent to retire as of June 30, 2010.  They then changed their retirement date over the summer to be end of this year and the board has taken action to confirm this.  The prior year purchase order was liquidated which made the money available to the current year.  That account will again be encumbered in the current year for the same purpose”.

In plain English, Goodwin claims Steve Gottlieb and Sylvia Ziegler announced their retirements as of June 30, 2010, which was last fiscal year.  As the story goes, the two had a change of heart and decided to work an additional year, which makes their unused sick day payouts a current year expense.  Now, prior year funds cannot be used for current employee expense.  This a long  standing accounting principle reemphasized in two Department of Education memos; one on 9/16/2003 and the other  5/12/2006.  .

Of course many residents will say “so what?  The district is obligated to pay and it really doesn’t matter which fiscal  year is charged” but here’s the financial impact:

Last year’s operating loss of $2.3 million anticipated payment of  the unused sick day obligation and it  (the loss) was absorbed by RT taxpayers.  But since last year’s cash is now covering this year’s expense, $212k  of current year funds is free to be spent elsewhere.  Thereby increasing future obligations. RT.residents will be taxed twice for the same expense. 



Another $238,177.17 is currently in question.  Ralph Goodwin implied that our district is self insured for unemployment and stated that staff reductions in the 3rd quarter of 2010 depleted our fund.  The encumbered reserve of $238k  was to replenish it.  Well,  possible staff reductions were announced on March 10,  2009  but there was no announcement that it came to fruition in fiscal 09-10..  Due to copyright laws.I’m prevented from presenting that Daily Record article written by Rob Jennings but the maximum staff reduction would have been a guidance counselor, education technologist and librarian plus 3 part time aides.  Hardly enough to deplete our fund and require a 238K replenishment.

I’ve submitted an O.P.R.A  request for documents supporting  the calculation but have been denied access without valid reason.

So technically, strong suspicion surrounds the siphoning of $238,177.17.


Another $6,000 was siphoned from last to this year showing blatant disregard for established procedure.


Mathematically, this leaves $335k unaccounted for.  There’s an accepted method to to test this number for appropriateness (is it all legit or siphoned cash?) . But curiously, school administration has denied access to those records too.   I’ll keep you all informed.


What actions should be taken?

As I’ve stated previously the RTBOE has done little more than deny access to relevant documents and threaten legal action.  Despite evidence  to the contrary, County officials claim correct procedures were followed.

But the state has yet to weigh in and per the referenced 5/12 2006 memo, Abbott districts would have lost state aid for similar indiscretions.  I suggest the local tax levy be reduced for every siphoned dollar.   


  1. Ted:
    Good for you. You followed my suggestion to publish the county school officials letter indicating that the district did nothing wrong.
    Unfortunately, you continue with the baseless conspiracy theories that will eventually tear the community apart.
    From what I have been able to piece together. Granted from hearsay that the schools have provided you with the materials you wanted but that those materials support their position and not yours so you are irrationally attacking the documents you requested.
    Your allegations that "Mathematically, this leaves $335k unaccounted for" can't be accurate because the school audit validated that all funds were accounted for which is in direct contradiction to your absurd allegations.
    Ted, I told you on several occasions that I would support you if you were credible and I would call you to task if you were wrong. It appears you are wrong and now you are flailing your arms trying to generate attention to yourself.
    You have my attention and it is not a positive thing. I told you in the beginning that my sole purpose is to protect my investment in this community. Your adolescent tirades based on no real facts is going to have a negative impact on those schools and my investments. Your lack of credibility is going to sway those voters who don't know better to vote the budget down. If it goes down again and they cut another million that the council president is boasting he is waiting to do it is going to effect my child's education and my investment. I won't stand for that.
    Ted, be a man and walk away since you are wrong and there is no way you can right yourself. Be a positive influence in this community not a negative one.
    I will promise you this even though you are proving to more of a malcontent I will continue to examine your comments for content and merit and if you ever do come up with something that is real i will stand by your side demanding that it be fixed.

  2. Bertram,

    If you read the DOE directives or are at all familiar with GAAP, you realizes significant errors were made by the district

    If the district had evidence supporting their actions, They'd produce it and embarrass me. For example, the district refuses to identify the account in which the siphoned $212k resides.

    Everyone agrees that it came from 2009-2010 and will fund 2010-2011 employee expense and clearly the transaction runs counter to the referenced memos and GAAP. I just want to know where the money is.

    Bertram, I'm not really concerned with your opinion or whether I have your attention. It's clear you have no technical knowledge regarding the issues. If I'm wrong, your buddy Verbist should provide the evidence. So far, I'm the only one producing valid documentation.