Early termination of Fairfield Area School District Supt. cost $128,000, PA Auditor General finds

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Auditor General Eugene DePasquale

HARRISBURG – Auditor General Eugene DePasquale said today that the way the Fairfield Area School District, Adams County, board of directors terminated the former superintendent’s contract seven months early unnecessarily cost the district $128,000.

“School boards have a right to end a superintendent’s contract early,” DePasquale said. “However, the process used to remove the superintendent should be completely transparent and done without increasing costs to the district.

“If the board had been transparent in their intentions from the beginning, the district could have used the $128,000 to benefit students,” he said.

The latest audit of the district released today covers July 2009 through June 2015. It includes two findings and eight recommendations.

Auditors found that board actions in 2014 regarding its intentions not to retain the former superintendent and to consider other applicants lacked the public transparency and good governance required by the Public School Code.

For example, the board did not comply with the Sunshine Act when it failed to provide adequate notice of an executive session held regarding the former superintendent’s resignation and the appointment of a substitute superintendent.

The board’s decision-making and negotiations surrounding the former superintendent’s retention, as well as the appointment of and contract with the substitute superintendent were not discussed with all board members prior to the execution of and voting upon related documents and contracts.

“The complete disregard for transparency is appalling,” said DePasquale, who noted that public outrage led some residents and three members of the board to file a lawsuit against the district. “This was an expensive contract buy-out that cost students and taxpayers $128,000. The fact that the former superintendent technically resigned is irrelevant, because he would not have done so without the buy-out incentives.”

Auditors tallied the unnecessary costs associated with the former superintendent’s resignation and settlement agreement:

• $89,000 in salaries, medical benefits, and retirement contributions, including paid administrative leave from Dec. 23, 2014 through June 30, 2015, and
• $39,000 in related legal costs between July 1, 2014 and June 30, 2015, to address issues which occurred as a result of the board’s ineffective governance and lack of transparency.

“Increased public concern about the lack of transparency by the board in mid-2014 resulted in an increase in Right-to-Know-Law (RTKL) requests,” DePasquale said. “The board’s reaction was to change the RTKL process to have the district solicitor review all requests. That process added $21,000 — that’s 26 percent of legal costs in 2014-15 — to the district’s legal bill.

“Any time I see a school spending more on legal fees, it raises alarms because I want every available dollar going toward classroom education.”

The second finding in the report is also related to the contract buy-out because the district incorrectly reported the former superintendent’s wages during the administrative leave period to the state’s retirement system.

The district reports that it corrected the error and the retirement system made the appropriate adjustment to the former superintendent’s pension.

The 47-page Fairfield Area School District audit report is available online at: http://www.PaAuditor.gov.

Source: Pennsylvania Auditor General