PATERSON, NJ - A state education department investigation of Paterson Public Schools has found the district gave two top administrators increases in pay earlier this year without holding the requisite public hearing or getting the necessary approval from the Passaic County Superintendent of Schools.
The state audit found that Superintendent Donnie Evans approved stipends worth $5,250 apiece for Assistant Superintendents Brenda Paterson and Eileen Shafer for work they performed between March and June. Those payments were added to their base salaries, which are $168,684 for Paterson and $165,957 for Shafer. The state report said the district failed to issue a public notice and hold a hearing on the increases, which the report said appears to violate state law. Evans discontinued the stipends in July.
The state inquiry also determined that the district hired a consultant without taking bids, as required by law; appointed someone to an administrator's job who lacked the requisite credentials; and entered into a settlement with a fired employee that violated state code by agreeing to pay his pension and health benefits for more than a year after his termination.

The investigation by the New Jersey education department's Office of Fiscal Accountability and Compliance was prompted by allegations submitted to Lt. Gov. Kim Guadagno by former Paterson Board of Education member Joseph Atallo in June. The investigative report by the state's Paterson Internal Audit Unit was completed in October and the Paterson Board of Education adopted a corrective action plan at its meeting on December 15. 
Paterson Public Schools only released the audit report and correction plan after filed a request under New Jersey's Open Public Records Act. Of the 13 allegations submitted by Atallo, the state report determined there were irregularities in four instances.
"In a district this size, with a budget of almost $500 million, the things they found were really minor in the grand scheme of things,'' said Board of Education President Theodore Best.
Best pointed out that the majority of the allegations submitted by Atallo were not substantiated, saying the "disgruntled" former board member "was just looking to start some trouble.'' Atallo declined discussing the state probe, saying he merely had passed along allegations that had been circulating among Patersonians.
The state audit team launched its probe, pulling records, without alerting the Paterson schools hierarchy, officials said.
In its findings on the assistant superintendent stipends, the report says the school board had received a memo that Patterson and Shafer would be taking on extra duties, but that "there was no mention of additional compensation.''
Best, however, said he had no problems with the assistant superintendents getting the extra money because of the work they did while the district was short-staffed last spring. "I would say those people earned their stipends,'' said Best. "The work had to be done by somebody.'' Best also pointed out that the school board, with the district under state control, has no jurisdiction over salaries and finances in general. Those decisions are made by Evans.
One of the problems uncovered in the state inquiry was Paterson Public Schools' settlement agreement with Mark Tabenkin, who had worked for the district as in-house legal counsel. (The copy of the audit released by Paterson Public Schools redacted the section on Tabenkin, citing employee confidentiality. But obtained a second version from the state with much of the information intact.)
The report says that Tabenkin filed a complaint with the district on March 4, alleging that Shafer was undermining his application for the position of District Labor Relations Officer. In that complaint, Tabenkin warned the district he might take legal action. In April, the report says, Tabenkin was terminated. But as part of a June settlement agreement with Tabekin, the district agreed to continue paying his salary, $133,900 a year, until June 30, 2011. The settlement also called for the district to continue making pension contributions on his behalf and paying for his health benefits, until June 30, 2011.
The audit says the pension payments and health benefit payments violated state code and that they should stop. Paterson Public Schools, in its correction plan, says that by February 1, it will notify the appropriate state offices about Tabenkin's pension and health benefit status. The corrective plan did not make clear whether the district would continue paying Tabenkin's salary for another six months, as stipulated in the settlement. 
Tabenkin could not be reached for comment on what action he might take once the district stopped paying his pension and health benefits, as had been called for in the settlement.
Among the other findings of the state inquiry are:
*the district hired Ronald Epps of South Carolina to provide "professional development workshops with the leadership team and principals'' without having a competitive contracting process as required by New Jersey law. The report said Epps has received $30,699 for consulting services performed between November 2009 and October 2010 and has an open purchase order with a balance of $14,000. Epps' contract allows him to receive $3,000 per day, plus air travel expenses not to exceed $3,500. Paterson Public Schools' corrective action plan says it will review its contracting procedures to make sure professional development services go through bids. But it does not say whether Epps will continue working for the remaining $14,000 available to him.
*the district appointed Carol Smeltzer to the position of Director of Non-Traditional Programs, even though she lacked a New Jersey School Administrator Certficate, one of the credentials required for the job. The district's correction plans says it will review the job to determine if the School Administrator Certificate is really necessary. If it is, Smeltzer will be given the opportunity to get the certification.
*the district opted to pay its former director of communications, Laura Franklin, $150 a hour for consulting services between March 2 and June 30, for a total of $26,962. Franklin had resigned her $110,058 position on March 1. The district had received consulting proposals from two other firms that offered to do the work for $125 per hour, but chose Franklin because of her familiarity with the district.