NEW ROCHELLE, NY — An auditor report seen by Talk of the Sound confirms and expands upon previous Talk of the Sound reporting that former New Rochelle Board of Education President Jeffrey Hastie charged thousands of dollars in unauthorized telecommunication expenses to taxpayers while traveling internationally to Germany, Turkey, Italy, Morocco and additional charges while on board aircraft and cruise ships.
The audit was conducted by R.S. Abrams & Co., LLP at the direction of Ingerman Smith, the District’s outside counsel, under a board resolution passed on August 6, 2019.
The Abrams Report is dated October 29, 2019.
Jeffrey Hastie was a guest on Denise Ward’s WVOX radio show on January 13, 2020. Hastie told Ward the matter of his mobile phone bills was resolved, and he claimed he was told by people involved in the investigation he owed about $200. Hastie did not explain why the auditors for Abrams or attorneys for Ingerman, Smith would be communicating directly with the subject of an investigation, a person no longer associated with the school board or school district in any way.
Based on Hastie’s claims, Talk of the Sound made a Freedom of Information request seeking the results of the investigation authorized by the school board on August 6, 2019, days after a Talk of the Sound article detailed the grounds for such an investigation.
I would like to obtain related records including records of any payments Hastie made in that regard, any report that was produced as part of the investigation, documents provided by Hastie to support his use of a mobile phone while Board President, his mobile phone records and any expense reports — all from July 1, 2018, until present.
Under the board leadership of President Amy Moselhi, Assistant Superintendent for Business & Administration Greg Kern repeatedly stonewalled on producing the report. On August 7, 2020, Kern wrote:
In reference to your Freedom of Information Law request dated January 14, 2020, and further to my emails to you dated January 21, 2020, February 24, 2020, March 20, 2020, April 30, 2020, June 11, 2020, and July 10, 2020. Please be advised that at this time, the District is still in the process of reviewing documents that may be responsive to your requests. Due to the voluminous nature of the materials sought and the potential for redactions. The district has determined that it will require an additional twenty (20) business days within which to respond to your request.
The Abrams Report later proved to be just 4 pages.
On August 14, 2020
After Robert Cox brought Kern’s conduct on this and many other FOIL requests made by Talk of the Sound to the attention of the board at a public board meeting on August 4, 2020, Kern turned over the four-page report and some but not all the supplemental material in a PDF file on August 14, 2020.
Among the charges referenced in the Abrams Report are $414.49 for “International Data — Cruise Ship”.
For months, in 2019, Hastie strenuously, repeatedly, publicly, denied running up any cruise ship telecom charges or even traveling on a cruise ship while using a taxpayer-funded mobile phone, going so far as to claim his brother nearly died on a cruise ship, so he would never travel on a cruise ship.
He made similar claims at a Public Hearing on the 2019-2020 Proposed Annual Budget of the City School District of New Rochelle on 5/7/2019:
Confronted by Robert Cox at the budget hearing with his own invoice for cruise ship charges Hastie’s defense is there are no photos of him on a cruise ship; to the assertion he refused to pay his overages Hastie calls on Board Clerk Lisdalia Saraiva to verify he was not asked to pay his overages — the ask was made, appropriately, by the business office not the board clerk, the same person who made thousands of dollars in unauthorized budget transfers to pay those overages.
The Abrams Report confirms Hastie not only ran up such charges but other district records seen by Talk of the Sound show school business officials, aware of his plans to travel on a cruise ship with a District phone, warned Hastie in the Fall of 2018 that voice and data services while on cruise ships was not covered under the international calling plan for the District plan and would be expensive.
The most startling disclosure in the audit report is the existence of three unauthorized budget transfers totaling $2,694.24 by former Board Clerk Lisdalia Saraiva.
Budget Transfers must be approved by both the Treasurer/Deputy Business Manager and the Assistant Superintendent for Business & Administration. The Board Clerk has no authority to approve a Budget Transfer and did not obtain proper authorization.
The Abrams Report audited cellphone usage and associated billings of Jeffrey Hastie for the period September 21, 2018, to February 23, 2019. The firm was not engaged by Ingerman, Smith to conduct an examination or review to express an opinion or conclusion but added, “had we performed additional procedures, other matters might have come to our attention that would have been reported to you.”
Hastie continued to run up hundreds of dollars in additional international phone charges on his personal phone after February 23, 2019, which partial records indicate he then submitted to the District for reimbursement. The complete expense report records and payments records including those for expense reimbursements were requested but not included in the records provided on August 14, 2020, to the FOIL request made on January 14, 2020. Subsequent attempts to obtain such records have yet to receive a response from the School Business Office.
The total amount of international phone charges in the partial expense reports total an additional $476.50: 47 days of AT&T “International Day Pass” charges for $10 a day between December 6, 2018, and April 19, 2018, plus an in-flight text messaging fee to Amy Moselhi. Missing from the expense report is another $209.45 in international telecom charges for a trip to Italy between June 3, 2019, and June 14, 2019, and a $140 charge for what appears to be an Uber ride from JFK Airport to the offices of Southern Westchester BOCES in Rye Brook, NY upon Hastie’s return to the United States on June 15, 2019. Also, a $1.73 in-flight Wi-Fi fee from December 6, 2018.
Altogether, in the period after Hastie claimed he stopped running up international telecom charges he incurred another $827.68 in expenses related to his international travel which he sought to charge back to the district in addition to the overages of $2,277.15 identified in the Abrams Report bringing the total for his year as board president to $3,104.83.
The Abrams Report concluded Hastie failed to provide sufficient evidence to support the purpose of messaging and data usage overage charges in the amount of $977.21 for the period of their audit period, September 21, 2018, to February 23, 2019. The Abrams Report did not examine Hastie’s messaging and data usage charges on overseas trips in April 2019 and June 2019 which amount to another $443.60 along with $140 in Uber ride charges. Combined Hastie had $1,560.81 in messaging and data usage overage charges without evidence of the purpose of the charges or no examination of the records at all.
Whatever the full amount of unauthorized and gratuitously wasteful spending by Hastie, there are no records that school officials made any effort to recoup any of that taxpayer money from the spendthrift Hastie.
On top of the documented charges, there is the cost of the investigation by Abrams, legal fees charged by Ingerman, Smith, collection costs and time and materials used by district employees. A figure of $10,000 or more seems likely.
The Abrams Report was broken into two sections: Budget Transfers and Cellphone Policy and Usage.
The District has adopted Board policy No. 3160, Transfer of Funds Between Categories which outlines the procedures for budget transfers. According to this policy, budget transfers may be made by the Assistant Superintendent for Business Administration subject to limitations established by the Board of Education or the Superintendent of Schools.
The largest Budget Transfer, dated January 10, 2019, was for $2,104.24. The Budget Transfer was requested by Saraiva and the form signed by her but the form did not include the two required signatures, one from the Treasurer/Deputy Business Manager and one from the Assistant Superintendent for Business & Administration.
Despite the failure of Saraiva to obtain authorization, the budget transfer was entered into the District’s nVISION finance system but records requested under FOIL that would indicate who entered the transaction were not provided.
There were two prior Budget Transfers, one for $420.00 dated September 17, 2018, and another for $170.00 dated October 1, 2018. Both forms were signed by Saraiva and by Treasurer/Deputy Business Manager Heidi Hohlfeld but not by the Assistant Superintendent for Business & Administration. These budget transfers were also entered into the District’s nVISION finance system and likewise records requested under FOIL that would indicate who entered the transaction were not provided.
Talk of the Sound has repeatedly requested documentation to show who entered these three transactions into the nVISION system despite Saraiva’s failure to obtain required authorization.
The Abrams Report found that although budget transfer reports “appear to be part of the monthly reporting package provided to the Board for review”, the budget transfer reports were not provided to the board during the audit period between September 2018 and January 2019.
The next budget transfer report received by the Board was for transfers made in February 2019.
Saraiva’s unauthorized budget transfers for $420.00 (9/17/18), $170.00 (10/1/18) and $2,104.24 (1/10/19) were not reported to the board for review in a budget transfer report until April 2019. No explanation was provided by Saraiva why her budget transfers to cover Hastie’s unauthorized international voice and data service for his trips to Germany, Turkey, Italy, Morocco and while on board aircraft and cruise ships was kept from the board and the public for up to 6 months.
The Abrams Report found “budget transfer approvals do not appear to be in accordance with Board policy which states that budget transfers may be made by the Assistant Superintendent for Business Administration. For the three budget transfers made into the “Operation of Plant — Telephone” budget code between September 2018 and January 2019, all were initiated by the District clerk, two were approved by the District Treasurer, and one did not contain an approval signature.”
This is misleading because the District Treasurer alone cannot authorize budget transfers, they must be authorized by the Assistant Superintendent for Business & Administration and sent to the board for review — none of which happened. So, none of Saraiva’s budget transfers to cover the cost of Hastie’s unauthorized international phone charges contained the required approval signature of the Assistant Superintendent for Business & Administration.
All three budget transfers were from the same function code which relates to expenditures associated with the Board of Education, the largest of which is the $2,104.24 budget transfer on January 10, 2019, taken from the budget code for attendance at educational conferences.
Not stated in the report is that Hastie was told repeatedly for months that there were serious issues with his running up overages on his District phone, that he angrily demanded all of this unauthorized charges be “taken care of” by staff in the business office whom he publicly disparaged during radio interviews, that he claimed he was too busy traveling to be concerned with the matter and was irate when the Assistant Superintendent for Business Administration refused to pay the unauthorized overages on his District phone.
And now Talk of the Sound readers will begin to understand why Hastie saw to it that the entire business office was cleared out under his tenure and replaced with compliant temps who would do what they were told to do by Hastie. Anyone who said “no” to Hastie’s unauthorized and likely illegal misappropriation of school district funds was fired. This raises broader questions of what other unauthorized expenses were run up by Hastie and approved by the temp staff hired at Hastie’s insistence.
Hastie claimed his international voice calls, text messages and data service were necessary because he was doing Board business, for example in a memo dated January 17, 2019, he claimed he “continued to conduct Board of Education business while traveling” to justify reimbursement for a Wi-Fi Fee of $1.79 which appeared on one of this Bank of America credit card statement. Like an unauthorized $140.00 Uber charge for a trip back to Westchester after landing at John F. Kennedy Airport on July 15, 2019.
The Abrams Report did not share Hastie’s self-interested justification for running up thousands of dollars in unnecessary, unauthorized expenses.
The District has adopted Board policy No. 3490, Use of Cellular Telephones and No. 8170, Telephone Service for the Board of Education President, to provide guidance on the use of District issued cellphones. The District’s Use of Cellular Telephones Board policy states that the level of service contract for each employee is to be established by the Superintendent and is subject to review and approval by the Board.
Per Board policy No. 3490, there is no documentation that Superintendent Dr. Brian Osborne or Interim Superintendent Dr. Magda Parvey or the New Rochelle Board of Education were ever notified that Hastie was using his District phone to make voice calls, send text message and access the Internet while traveling outside the United States or to make voice calls and send text message from the United States to locations outside the country.
This policy (#3490) provides for the use of District cellphones for a “reasonable number of non-business calls” provided that “employees agree to pay any excess charges over the monthly allowance”. The policy further states that reasonable personal use is based on the sole discretion of the Superintendent, subject to Board review and approval, and that employees must agree in writing to accept financial responsibility for any excess personal usage.
As Hastie was not an employee of the District, as much as he imagined he was, there would be no basis for the administration to demand Hastie meet requirements for employees under Board Policy #3490.
The Abrams Report noted that Board Policy #8170 states “all charges associated with the duties of the office of the President of the Board of Education are to be paid for out of School District funds.”
The Abrams Report failed to note that the use of the phone is for the President to attend to district matters “from his/her residence”, that is to say with the boundaries of the City School District of New Rochelle — not the Istanbul School District. By this measure, all of the overages or other charges for travel outside of New Rochelle are Hastie’s responsibility to pay, not the district and not taxpayers.
The full text or Board policy No. 8170 clearly and explicitly anticipates local use only of a District phone provide to a President of the Board of Education
Inasmuch as the President of the Board of Education does not maintain an office at the School District offices, and is required to attend to many matters related to the district from his/her residence, the Board of Education authorizes the School District to provide a cellular, wireless, or mobile telephone to the President for use during his/her term as President.
All charges connected with the provision of a cellular, wireless, or mobile telephone, service, supplies, and disconnection of such telephone that are connected with the duties of the office of President of the Board of Education shall be paid for out of School District funds.
Policy
Adopted: 1988
Revised: Reso. No. 17-107 — Sept. 6, 2016
The Abrams Report analysis is based largely on comparing monthly Verizon bill summaries for Hastie with a list of known District phone numbers to determine if charges were connected with the duties of the office of the President of the Board of Education and in accordance with Board policy.
Total cellphone charges for the period reviewed amounted to $2,772.19. Of those charges, $2,277.08 (82.14%) were overage charges exceeding the established cellphone plan.
Overage charges comprised international messages sent and received, international minutes inside and outside of the United States, and international data on land, aircraft, and cruise ship.
A review of the detailed call log data compared to a list of known District phone numbers showed that $356.43 or approximately 27% of the overage charges associated with international minutes were the result of calls made to phone numbers that did not appear on the list of known District numbers. The remaining $943.51 or 73% of overage charges associated with international minutes were the result of calls made to known District phone numbers.
There was insufficient evidence to support the purpose of messaging and data usage overage charges in the amount of $977.21.
There can be no argument that Hastie should be required to repay the District for the $977.21 messaging and data usage overage charges where auditors found there was insufficient evidence to support the purpose of those charges.
But this is to miss the point.
The New Rochelle Board of Education has no need for a Board President who spends a significant part of his term as President traveling around the world and even if this were the case there is no emergency that requires the immediate attention of the President so that taking the time to connect to the Internet on free or home Wi-Fi and make free voice calls, send free text messages, check emails or surf the web would not interfere with Hastie acting in his role of Board President.
In short, Hastie was a self-important person who imagined himself as a hybrid: a Board President entitled to a District phone to make calls from his residence but an employee of the district entitled to run up charges on his District phone but special in that he was not obligated to sign an agreement to pay for overages which, in his case, ran into the thousands of dollars. He did not need authorizations from a higher authority (in his mind, he was the only authority) and those carrying out his demands were not required to obtain authorizations and those employees who would not accede to his imperious demands had their heads lopped off — they were fired and, preferably, had their character impugned in the process.
Permanent, full-time employees with personal and professional integrity were fired by Hastie and replaced with temporary, part-time employees with no personal and professional integrity.
What makes Hastie’s wasteful and cavalier disregard for taxpayer funds more galling is that, as anyone who has traveled internationally over the past decade knows, there has been a massive proliferation of free Wi-Fi hotspots which makes internationally calling over services like FaceTime, WhatsApp, Facebook and many others available to no cost.
Hastie managed to run up over $3,000 — $2,772.19 cited in the Abrams Report plus dozens of $10 a day international calling fees on Hastie’s personal phone, and a $6.50 text message to Amy Moselhi while in an aircraft. And the $1.79 Wi-Fi connection via on his Bank of America credit card — for what could have been accomplished with minimal effort and a modicum of patience by way of free phone calls and text messages and internet access.
To take a personal example, my son lived in Saudia Arabia for three years and during that time traveled through the Kingdom, as well as Bahrain, Oman, Egypt, the UAE, the Republic of Georgia, the Republic of Ireland, China, Thailand, and Sri Lanka. Throughout that time he did not pay one penny in fees for international text messages, voice calls or data charges. He connected to Wi-Fi as he traveled and made calls and surfed the web for free.
Hastie was entitled under Board Policy #8170 to have a phone to “attend to many matters related to the district from his/her residence” and those costs should be “paid for out of School District funds” — the cost of the phone and the base contract for roughly $36 a month.
The remaining $2,277.08 charged on his District phone and any fees charged on his personal phone are his responsibility, and he should be required to make restitution for the entire amount.
For reasons yet unexplained, no records related to payments by Hastie were provided under our Freedom of Information Request after 7 months of stonewalling, most under the board leadership of Amy Moselhi. Follow-up requests have, so far, been ignored.
A series of questions sent to Moselhi have, so far, gone unanswered:
- Can you explain why you did not make public the report on this topic (Hastie’s phone bills) by R.S. Abrams & Co., LLP which is dated October 2019?
- Can you explain why the report was not released to me per my January 14, 2020 FOIL request from the time of the request until the end of your term as Board President on June 30, 2020?
- Several weeks after your term as Board President ended I did receive records related to my FOIL request. I have only gotten into working on a story this week. Although I ask for records related to payments, I received no records indicating that after the report was delivered any effort was made to collect any money from Mr. Hastie. He claimed in a radio interview with Denise Ward that he was told he owed about $200. The report suggests a higher figure, between $900 and $2200 but does not specify an exact figure. Either way, there seems to be no dispute that Mr. Hastie owes money to the District. So, can you explain why there are no records that indicate any effort was made to collect money from Hastie?
- The report suggests a felony act. Was any criminal referral made regarding an unauthorized budget transfer for over $2,000 by Board Clerk Lisdalia Saraiva?
Moselhi’s only response was to punt:
I have copied (Board President) Rachel (Relkin) herein. I did not make any decisions on my own. All related decisions were made as a board with the advise (thus spelled) of counsel.
Rachel (Relkin), as president, speaks for the Board and knows as much about this as anyone who was on the board when it was discussed last year.
She will provide a response if she sees fit to do so.
Thank you,
Amy
As Moselhi claimed all other board members were consulted and concurred with her decisions we followed up with each member of the board from Moselhi’s tenure as President none of whom were willing to confirm Moselhi’s account.
I am working on a story about an outside auditor report of Jeffrey Hastie’s phone bills. The audit was authorized by the board in August 2019. The final report, what I am calling the Abrams Report, is dated October 29, 2019.
I asked Amy Moselhi questions (below) about this and you can see her response (below). She has made various claims that you approved of her actions as described below. I want to know if that is true.
As Amy is encouraging me in this course of action, I am copying Rachel on this email and other similar emails to the other board members from that period so Rachel is aware I am asking all board members to respond to the claims Amy has made about you in her email reply to my questions.
Were you a party to and did you concur with a decision “made as a board” to withhold public release of the Abrams Report on the audit of Jeffrey Hastie’s phone bills?
Were you a party to and did you concur with a decision “made as a board” to forego seeking restitution from Jeffrey Hastie for over $2,000 in unauthorized international data, voice, wifi and text message charges while he was board President?
Were you a party to and did you concur with a decision “made as a board” to forestall the release of the Abrams Report in response to my FOIL request for the report dated January 14, 2020? (note: I received the report from Greg Kern on August 14, 2020 after I complained to the board the week before about Kern’s many months of stonewalling on almost all of my FOIL requests).
Were you a party to and did you concur with a decision “made as a board” to not make a criminal referral for the unauthorized use of school district / taxpayer funds to pay Hastie’s unauthorized international data, voice, wifi and text message charges while he was board President AND the unauthorized budget transfers initiated by Liz Saraiva to pay for Hastie’s unauthorized phone charges?
Have you seen, read a copy of the Abrams report?
As you know, the school board only has power to act “as a board” and so acts by voting on resolutions during a public meeting of the board so if you do recall members making such decisions “as a board” can you tell me which meeting these decisions were taken?
A series of requests for missing records to Assistant Superintendent for Business & Administration Greg Kern has likewise gone unanswered:
Mr. Kern,
This is public records request as a follow-up to my FOIL request from January 2020 related to Jeffrey Hastie’s phone bills while he was Board President The Abrams report says the budget transfers related to these bills were not authorized by the Assistant Superintendent for Business & Administration as required but does not explain who did ultimately authorize the budget transfers and who signed off on the invoices to authorize paying them.
I would like to obtain the following records:
- All Budget Transfer records from nVision related to Jeffrey Hastie’s phone bills (while he was Board President).
- Accounts Payable Vouchers related to Jeffrey Hastie’s phone bills (while he was Board President)
Thanks,
Robert Cox
Mr. Kern,
Let me add that there is a sheet entitled “Expense Report” in the PDF packet you sent on the Hastie Investigation.
It is just one page. It is not dated. It is not signed. There is no total at the bottom. There is no line for approvals. There is what appears to be an Uber receipt without any explanation of who was in the car, where it was going from and the purpose of the trip. There is no mention of it on the expense report sheet you sent. In light of these things, it appears that this expense report is possibly one sheet of several sheets. Are there more sheets? Was there a reimbursement payment made for the expenses?
So, I would again ask that you clarify that what you sent is the complete record related to Hastie expense reports covered under my FOIL.
If these are the only records, please let me know.
If there are other records such as additional pages of the expense sheet, payments, etc. please send them immediately as they are covered under my Jan 2020 FOIL request.
Thanks,
Robert Cox
Mr. Kern,
I am told that there was some effort to collect money from Mr. Hastie, so if you can pull up those records and send them along as well I would appreciate it.
Thanks,
Robert Cox
Mr. Kern,
I just got around to working on the matter of Jeffrey Hastie’s phone bills.
I did ask for anything related to payments. I want to be super-clear here.
As you did not provide any payment related records it is because there are no invoices or letters TO Hastie seeking payment related to his phone bill and there are no payment related records of Hastie being paid by the District for reimbursement of his phone charges.
Is that correct? There are no such records?
If that is not correct please state that and I would ask that the oversight be corrected immediately as this FOIL request goes back to January 2020.
Thanks,
Robert Cox
Mr. Kern,
This is a public records request.
I would like to obtain the following records:
Records pertaining to what it cost to have Abrams do an investigation into Jeffrey Hastie’s overages on his District issued phone and report the results to the board and to comply with my FOIL request pertaining to the matter to include whatever request for services were made to do the work, any invoices where the District was charged for any work on the matter including invoices from Abrams or Ingerman Smith either to the District or amongst each other.
RELATED:
An investigation is in order. Unless proven otherwise, Hastie should be compelled to reimburse the District for the entire amount of $2,104.24 — along with whatever other amounts turn up later in an audit.
Bank of America Invoice with Wi-Fi Fee for $1.79
The resolution authorizes Ingerman, Smith to hire an auditor to assist in its review of “the utilization of a district-owned cellular phone by the former 2018-2019 President of the Board of Education.
I concur with Mr. Cox. Thank you Robert for keeping the taxpayers informed with your investigative reporting.
This is an overkill, a waste of taxpayer’s money. $10,000 was spent to investigate $3500 fraud arising from unauthorized use of mobile phone by a public servant. The BOE could have itemized the phone bills and get Mr. Hastie to pay up, discipline fire him after that if they so decide. The district would be $10,000 richer if they had done that. This amounts to killing a fly with a sledgehammer.
The article does not say that $10,000 was spent on an investigation. It says that the District had yet to respond to a FOIL request for that information.
What the article does say is that if you take into account the unauthorized expenses, the work done by staff, and the cost of the auditor and lawyers a figure like $10,000 is a likely figure for the district to pursue as restitution from Jeffrey Hastie.
This is money the District can get quite easily by getting a judgement against him and filing a lien against his assets that are in the USA even if he is hiding out in Italy.
You do not seem to understand this matter if you think Hastie is an employee.
He is a former board member who left the country shortly after his term expires.
As the article says, a big question is why are there no records related to payments by Hastie — letters, invoices, checks, etc.
A question for Amy Moselhi who was in charge at the time, is why do an investigation if you do not intend to pursue a claim.
As to your general idea that spending $10,000 to pursue a $3,500 fraud is “killing a fly with a sledgehammer” I find that preposterous even if those figures were correct.
What is the acceptable level of misappropriation of taxpayer dollars?
What is the disincentive to fraud if you are going to take the position that it is not cost-effective to pursue a fraud investigation because the investigation costs more than the amount of the fraud?
What is the message to other board members? Recall that a previous board President (David Lacher) misappropriated $13,500 in 2013-14. I exposed that and he paid it back.
This matter is not “over”. The solution is not to walk away but to hold Hastie accountable if he refuses to pay the entire bill and let the courts decide.
It is my view that any person in a position of public trust (and the BOE President is not just elected to the board, then elected by the board to be an officer, and as such is the Chief Financial Officer of the district) must be held to account. Period.
Finally, this is a single case — phone bills — where the auditor stated there were over $900 in charges without sufficient evidence they were School business related and over $2,000 in unauthorized budget transfers by the board clerk.
If your CFO is caught in a fraud over phone bills it is reasonable to then do a more expansive investigation into everything he/she touched.
In fact, I do have information on other malfeasance by Hastie such as obtaining employee emails, seeking to obtain no-bid contracts for his “friends” and more.
The best solution is for the board to refer to the entire matter to either the Westchester County District Attorney’s Office or the Comptroller.
At the end of the day there is no acceptable losses when it comes to waste/fraud/abuse.