Board of Education Forensic Audit Reveals Financial Improprieties

CPA Dieter Lerch presents his findings to the board. Credits: Fran Sullivan

ELIZABETH, NJ – A vendor related to a member of the Elizabeth school board was paid about $400,000 over the past five years for work that was improperly never put out to bid, according to a forensic audit revealed March 17.

The results of the audit, presented at the Elizabeth Board of Education meeting by attorney Lester Taylor and accountant Dieter Lerch, found that about $80,000 per year was paid each year, for the past five years, to Trujillo Construction, a firm related to school board member Carlos Trujillo. 

The board mandates that any work costing $36,000 or more must be put out for bid, said Taylor and Lerch. They said the invoices were not detailed and contained only one-line items and they noted the checks were sent to the home of another board member.

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“Have I done something wrong?” asked Trujillo at the meeting. “Have I done something illegal?”

School board attorney Jonathan Williams said he didn’t think so, but said the issue warrants further review.

Other audit findings fell into several categories. Lerch reported that 35 former employees were still receiving health coverage despite being no longer eligible. This, he said, is costing $18,500 per month. From the time these employees left their jobs, the board has paid $350,000 for their insurance premiums, said the accountant.

Lerch also revealed bid violations. He said he found $70,000 worth of violations involving mechanical services. He also said he found that the board paid $107,000 for asphalt work that was bid at $50,300.

Lerch said snow removal that was bid at $78,300 actually cost the board $232,000 and auto repairs bid at $100,000 came in at $130,000.

Emergency services, such as heating and air conditioning abatements and asbestos removals were bid out at $170,000 and the actual cost was $227,000, said Lerch. 

In other board business, a tentative $569.4 million budget was passed for the 2016-2017 school year. Among the highlights of the tentative budget, approved by the Board in a 6-1-1 vote, are a 0 percent tax increase to local taxpayers and no reduction of district personnel.

The budget approved by the Board is a tentative budget, meaning modifications or necessary improvements may still be made through April 29, said the board. A public hearing on the budget will be held at the Donald Stewart Early Childhood Center in Elizabeth on May 5, 2016 at 7 p.m.

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