Why New Rochelle School District Business Manager John Quinn Must Go

Written By: Robert Cox

John B. Quinn is the Assistant Superintendent for Business & Administration in the City School District of New Rochelle. His current contract expires on June 30th. There is a unique opportunity to remove Quinn by doing precisely nothing.

Talk of the Sound believes the New Rochelle Board of Education should allow Quinn’s contract to lapse. This would free up incoming Schools Superintendent Brian Osborne to hire his own Business Manager and task that person to clean house in the departments currently under Quinn.

While it is true that Quinn inherited some problems, many others arose on his watch and still others he created on his own, so while Quinn cannot be blamed for every problem in the District, there is no doubt he has exacerbated the problem.

There has been a lot of “us and them” on the board these days but this is the case where all board members need to set aside their difference and take a cold, hard look at Quinn’s track records and do what is best to protect the interest of the school community, taxpayers and New Rochelle overall.

The last board meeting between now and then is June 24th so if you believe as I do that Quinn needs to go the next few days are the time to make yourself heard and call for that cold, hard look.

At the top of their list should be recent revelations about a state audit.

Over the past year, the District has reported its 2013 audited financials to the board of education, to the public, and to three state agencies — the New York State Office of the Comptroller (“OSC”), the New York State Education Department (“SED”), and the New York State Department of Taxation and Finance (“tax department”).

Quinn has been fudging the numbers for years, largely to hide large sums of loose cash sloshing around in various line items in the budget, and in particular with the fund balance or “rainy day” reserve fund. Quinn had to hide the money because New York State law caps the amount of free cash or “undesignated fund balance” at 4% of the total budget (about $8-9 mm) and for many years the district well exceeded the cap. Some of the money was hidden by overstating the amount needed each year for items like medical insurance or pensions and in other cases by claiming that undesignated funds were designated for property tax refunds or workers compensation payments when the funds were rarely, if ever, used for that purpose.

This fund balance issue was reported in the 2012 Citizens Advisory Report on the Budget and discussed many times at public board meetings since.

Quinn ran into problems with his fudging this year when the OSC came up with a new way to evaluate municipal and school finances, a “stress test”, with a score heavily weighted towards evaluating fund balance. With Quinn having spent years attempting to make the fund balance seem lower than it was to skirt the cap, Quinn was caught flat-footed when the OSC pulled copies of the district’s 2013 audited financials, reviewed them and concluded that the District’s fund balance was dangerously low.

As a result, the OSC issued a stress test report that gave New Rochelle the lowest score in Westchester — the only failing grade in the entire county.

Purely by coincidence, the OSC was in the midst of their quinquennial Local Accountability Audit (every five years).

To appreciate the seriousness of Quinn’s actions here, readers need to understand that each and every time the District reported its audited financials over the past year — locally, to the board, and to state agencies — it used the same set of numbers, the auditor’s report presented to the board and approved by them in December 2013. This includes the months prior to March 27, 2014 and in the months since March 27, 2014.

On March 27, 2014, however, the District wrote a letter to the OSC thanking them for “upgrading” their score on the stress test. The OSC has since confirmed that the “upgrade” was based on a new set of numbers, never seen before or since. Quinn (or someone working for Quinn) sent an email to the OSC telling them of a supposed “error” and asking the auditors to move $1.6 mm from the designated fund balance for workers compensation to the undesignated fund balance. Magically, the funds were moved and the score improved.

There is no record or footnote in the OSC Local Accountability Audit that this financial sleight-of-hand took place. There was no notification to the New Rochelle Board of Education, the District’s external auditors, SED or the tax department. The District’s audited financials have not been restated.

Talk of the Sound has been seeking to obtain a copy of this magical email from OSC and the District since April under the Freedom of Information Law and has been stonewalled at every turn by the OSC, Quinn and the Districts’ outside counsel Jeff Kehl.

Talk of the Sound will continue to seek to obtain the magical email but readers need only understand that there are no authorized, audited financials in existence that support the claims put forth in the magical email. Just as mysterious as the District’s supposed $1.6 mm “error” is the willingness with which the OSC auditors accepted the putative “error” and transferred $1.6 mm (out of a total of $1.9 mm) from the workers compensation designated fund balance to the undesignated fund balance.

The 2013 audited financials state that the actual spending for workers compensation in 2013 was about $18,000.

That the Comptroller would prefer to accept the equivalent of a “note from mom”, an email from the subject of an audit, John Quinn, over the official audited financials, approved by a local school board, filed with the SED and the tax department is shocking. The actions of the OSC auditors raises serious questions not just about the credibility of OSC audits generally but the entire audit function of the OSC statewide.

Until 2007, Quinn was largely unknown in New Rochelle. He came to the District after a brief stint in Mount Vernon and that after a full career in Connecticut.

Quinn retired in the Nutmeg State and began a new career in New York 9 years ago. He obtained a School Business Administrator Permanent Certificate in 2005 and a School District Administrator Permanent Certificate in 2006. He first worked in the Mount Vernon School District as Purchasing Agent, later became interim Assistant Superintendent for Business Administration and then Assistant Superintendent for Business Administration.

Quinn was hired by the City School District of New Rochelle in 2007.

Quinn left Mount Vernon in the midst of a bribery investigation by the Westchester County District Attorney. Arthur Rose, the head purchasing agent under Quinn, and Quinn’s successor to that position, was suspended by the Mount Vernon Board of Education in September 2006. Rose was indicted by a Westchester grand jury in March 2008 and convicted later that year on six counts related to taking bribes for steering contracts for custodial supplies and photocopies equipment. Rose was sentenced in 2009 to up to seven years in prison for taking a $10,000 bribe in 2006 from Tri-State Supply and a $3,500 bribe in 2005 from Ricoh. Rose had been convicted on a grand larceny charge in 2004 but was promoted under Quinn. According to DeFiore spokesperson Lucian Chalfen, Rose was recently released from prison.

As the board considers whether to renew Quinn’s contract they would do well to review his track record, department by department.

Transportation – Not long after Quinn promoted Dianne Wessel to be the head of the transportation department she was arrested for drunk driving. Police say flipped her vehicle on Union Street after hitting three parked cars. Marijuana was reportedly found in her vehicle. Wessel is said to be “friendly” with the manager of Mile Square Transportation in New Rochelle and that Mile Square mechanics service her personal vehicle at no charge.

Security – For years the District has filed fraudulent “211 Waivers” to allow retired police officers to work for the district while collecting their full police pension. Non-resident security guards, using fictitious addresses, were hired despite civil service requirements that they reside in New Rochelle prior to their employment by the District. Four security guards were known by school officials to have engaged in sex with students. One of them is a person of interest in a armed robbery-turned-kidnapping, according to NRPD sources. All four remain employed by the District. Dozens of security guards worked for extended periods of time without current licenses from New York State. Part-time security guards have been able to work full-time hours, a violation of the FUSE contract, by shifting them to different schools and off-site locations each week.

Food Services – The Westchester County Health Department cited the District’s food services ten times in 2009, the worst record in Westchester. Eight schools in New Rochelle accounted for 18% (10 of 56) of all the “Unacceptable” ratings in Westchester that year. From 2006 to 2008, New Rochelle had 13 “Unacceptable” ratings so the problem in New Rochelle, already bad, got worse under Quinn. The three worst schools were Jefferson Elementary, Isaac E. Young Middle School and New Rochelle High School.

Buildings & Grounds – It would take an encyclopedia to document the full extent of the malfeasance and corruption in this department, some of which we have reported since 2008. Instead, we offer here a top line assessment and a statement of our belief that finally, under Interim Superintendent Dr. Jeffrey Korostoff, the matter is being taken seriously. Employees in this department have committed numerous crimes from falsifying billing records to claiming unearned pay including massive amounts of unearned overtime, to misappropriation of school equipment ranging from power tools to garbage trucks, to wholesale theft of supplies along with bribes and kickbacks. The losses in this department, conservatively, exceed $500,000 a year and are likely much higher. Based on reporting by Talk of the Sound, the District has put a hold on all overtime without the expressed, written permission of Dr. Korostoff, thrown out all bids for Maintenance Mechanic contracts (plumbing, electrical, carpentry, etc.) and taken other steps to limit the financial damage caused by the operation of this department.

Budget & Finance – the 2012 Citizens Advisory Committee report authorized by Chrisanne Petrone documented extensive flaws in District budgeting and finance. Among items mentioned in the report were reduction in rates paid to hourly workers, reduction in use of outside contractual services and supplies, reserve fund disclosures, implementation of an inventory management system, implementation of a time management system, triennial rebid cycle for large contracts and many others that were derived from reporting on Talk of the Sound. The 2013 CAC endorsed the findings of the 2012 CAC. Quinn implemented virtually none of the recommendations in either report.

Audit & Accounting, Purchasing – An analysis of payment records by Talk of the Sound shows that there are absolutely no financial controls in place so that invoices are routinely paid for thousands and tens of thousands of dollars without supporting documentation. Up until recently, many of these invoices were authorized by John Gallagher who is an outside contractor for Aramark Educational Services. How this was missed by the District’s auditors and OSC auditors is inexplicable.

Like Buildings & Grounds, this area under Quinn requires an encyclopedia and will be covered in detail in future articles.

While not a department per se, Aramark deserves special mention here. John Gallagher has been the source of much of the corruption in the District and he, along with the entire Aramark management team, must go. Despite not being an employee of the District, Quinn has permitted Gallagher to represent the District in dealings with other state agencies, to sign documents involving the local civil service, to hire contractors, authorize purchase orders and payments and otherwise operate in a manner specifically prohibited by the Aramark contract that was in effect until 2013. It is unclear at this point what the relationship is between the District and Aramark because after Quinn put out a sham RFP and Aramark was the sole bidder, Quinn never signed a contract with Aramark despite repeatedly describing “the contract” to the school board in public meetings.

The District has, for years, been made aware of criminal acts by Gallagher and some of the District employees working under Quinn. These people need not only be separated from the District but referrals made to the Westchester County District Attorney.

The necessary house cleaning cannot credibly take place with John Quinn as Assistant Superintendent for Business & Administration. He has not only known about the myriad problems but, in some cases, he has been a prime actor in them. The majority of the bad actors in the District — those that have stolen large sums from the District or remained silent and watched as others did — work under Quinn. The entire Aramark team has worked under Quinn. All of the no-bid maintenance mechanic contracts and improper payments occurred under Quinn.

Our recommendation would be that a new Business Manager be hired, a person of integrity with a proven track record of enforcing strict financial controls and firing people who do not adhere to them. This person should then evaluate every supervisor and department head currently working under Quinn and, where appropriate, separate them from the District.

John Quinn is part of the problem not the solution. It’s time for him to go.