Special Audit questions personnel spending
Published on July 28th, 1999
STONEHAM, MA - It has been almost five months since Frank Gagliardi resigned from his multiple roles with the Stoneham School Department, and last week the Stoneham School Department released an audit which hints at the former Special Education and Title 1 Grant Director's motivations for leaving.
Gagliardi was also the principal of the North and Colonial Park elementary schools. In 1998, if police overtime was excluded, Gagliardi would have been the highest paid town employee at $93,439 a year.
The audit, conducted by the Andover accounting firm of Melanson, Heath and Company, reveals what the auditors called "possible overpayment of travel funds," "inappropriate management" of grant funds and $151,280 in prepayments. (Prepayments are payments for services not yet rendered or goods not yet received.) And as the audit reads, "There can be no assurance that the school would receive the full benefit of the services in the future."
The School Department had not released the audit, Connelly said, to comply with the wishes of the Middlesex District Attorney's Office. The audit was completed in February, and Gagliardi resigned in March, but he was paid for the remainder of the spring.
Gagliardi is currently employed as a school administrator in another district. He could not be reached for comment.
In a July 19, 1999 memorandum to Town Administrator Jeff Nutting, Connelly writes, "I have been advised the Middlesex District Attorney's Office has concluded their investigation of the above matter and no longer request that the 'audit findings' be kept confidential."
However, a July 22 letter from Assistant District Attorney Michael Fabbri states, "At no time did I, or any other employee of this office, indicate to Dr. Joseph Connelly or any other official with the Town of Stoneham that we no longer wanted the audit report done by Melanson Heath & Company, PC, to be kept confidential."
Also, as of July 23 Chris O'Neil of the District Attorney's Office would not confirm that the investigation is complete.
But both Nutting and Connelly say Fabbri's office gave them the OK to release the audit.
"Mike (Fabbri) called me himself," Nutting said.
The selectmen filed two public records requests before getting a look at the audit last week.
At the July 27 meeting Nutting and the selectmen were exasperated. They want to know what action will be taken and when.
Fabbri's letter suggests that the DA's Office is done investigating but the State Ethics Commission is now looking at the matter: "We (DA) very much appreciated their (Stoneham School Department) deference to our request that their copy remain undisclosed during our review of these matters. I trust they will extend the same deference to the State Ethics Commission if so requested."
As far as Connelly is concerned the matter, at least internally, is resolved.
"I think we have addressed the main problem," Connelly said. "Grant funds will no longer be discretionary but instead go directly to personnel who provide service to the children served by the grants."
But there are a lot of things in the audit that don't look good:
According to the audit, "purchase orders were inconsistently used, and almost never used by the special education office or for personal service contracts."
The audit states that dates on invoices were changed.
Valerie Ardi, the Special Education Director in Reading, received prepayments from grants under Gagliardi's control. Gagliardi received prepayments from Ardi "to Gagliardi Consulting for the service of (his daughter) Jacqueline, based on invoices that were incorrect as to date and the nature of the services provided," according to the audit.
The audit states, "Any payments to an employee as a contractor may violate conflict of interest provisions of the State Ethics Commission."
According to the audit, only Martha Downs — the then and current Assistant Business Manager — knew about Gagliardi Consulting. The report reads: "Invoices submitted to the Stoneham Public Schools are titled GCA (Gagliardi Consulting Associates) and submitted on generic invoice forms... invoices submitted to other schools were titled Gagliardi Consulting Associates on letterhead."
Down's daughter Jean O'Halloran received $2300, according to the audit, for 72 hours of work on a grant administered by Gagliardi.
According to the audit, for a trip from Bar Harbor Maine to Boston and back to allegedly attend a conference convened by Connelly, Gagliardi spent $310. He took a plane and had dinner with a consultant, even though Connelly later said Gagliardi was not required to return from vacation for the meeting.
The travel occurred between Aug. 22 and 25, 1998. Yet, the reimbursement is dated 8/7/98 and was paid 8/13/98. Also, the receipt from the dinner with the unspecified consultant is dated Aug. 6.
Connelly praised the auditors for performing "a professional and thorough job."
The superintendent and school committee will address the community on this matter at their July 29 meeting, 7:30 p.m. at the Stoneham High School Library.
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