Monday, December 05, 2005

Higher Educa$tion:

Many years ago, friends of my parents moved to a public school district I shall not name. They had two very difficult children. They selected a school system that got excellent academic results, hoping their kids would do well there. After a few months they found out (they thought) why the school system had such good records: the principal met with them and asked them to remove their kids from the school system.

So it is with great interest that I’m following the story of the Roslyn School system on Long Island, which seems to have a very high rank in something that lacks a name. Roughly seven employees have stolen a least four million – possibly more, according to press reports – from the school system. The auditors are being sued for not noticing things like an official taking a companion on Concord flights and staying in $1,800/night hotels. The developers of the accounting software are being sued for making software that was (it's alleged) an easy accomplice in concealing theft. And now you can read in the New York Times that school officials expect to be sued for mishandling the disaster, such that they cannot collect their losses from companies that insured them against theft.

When officials learned that Pamela Gluckin, assistant superintendent for business and finance, had stolen $250,000, they sought advice on how to handle her case, and decided to settle it quickly and quietly, especially since she offered to repay the money. That means they did not promptly notify the relevant insurance companies of the theft, and three of those companies now refuse to pay. Irony of Ironies: It was Ms. Gluckin who kept the policies in force, and had the board known she had actually stolen a million, not just $250,000, they might have acted differently.
Attempts to keep the whole thing quiet were unraveled by an anonymous letter. You can read a lot of the story here in Newsday. Here's my favorite quote from that story:
She was so efficient, school officials now say, that she found ways to exploit the system, inventing phony companies and using district credit cards to embezzle up to $1 million during her 12-year tenure.

She was so effective, officials charge, that some of her schemes went undetected even after the school board caught her the first time in 2002 when, rather than involving police, they forced her to retire a few months later after repaying $250,000.
And then there's this:
Within about a month, the board had its money back and written opinions from two lawyers that it was under no legal obligation to publicly disclose its findings or notify authorities.

"We were very concerned as to what our obligations were," said school board president William Costigan. "She was a trusted employee and we were confronted with the fact that she had embezzled money. We truly believed we did what was in the best interests of the school community."

It was, board members now concede, a costly miscalculation.
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