Possible Fraud Case Referred to Police and Attorney General's Office

Report states results are inconclusive as to whether fraud occurred, but found internal controls were insufficient.


This press release came from Swampscott's Acting Town Administrator Dave Castellarin.

The Swampscott Board of Selectmen and the Swampscott School Committee have received and reviewed the auditor’s “Fraud Examination Report” and have accepted the report and recommendations of the Town’s Auditor.

The Board and the Committee are committed to assuring that all Town and School operations under their purview are conducted according to applicable Massachusetts General Laws and regulations, and appreciates the assistance and recommendations of the auditor in that effort. 

Because of the lack of accounting records and documentation, the result of the fraud examination was inconclusive as to whether fraud occurred during the fraud examination period. However, the audit report does conclude that the system of internal control over cash receipts and cash disbursements were insufficient.  The report did find evidence of several violations of the municipal finance laws, as well as other related infractions.  Both the Board of Selectmen and the School Committee voted to refer the report to the Attorney General’s Office and the Swampscott police department for their review. 

Both the Board of Selectmen and the School Committee take these issues very seriously. Internal controls have already been designed, documented, and implemented to promote controls over cash receipts and disbursements related to school activities and student activity funds.   The School Committee is in the process of formally closing all bank accounts that do not fall under the Town that were previously held at the individual schools.  These funds will be deposited with the Town Treasurer going forward and managed and accounted for in accordance with Massachusetts laws.         

The report is not a public record, since it is going to be reviewed by the police department and the Attorney General and because it contains personal and personnel information.   Any additional recommendations which result from review of the report by the police department or the Attorney General will be carefully considered.  The Board and the Committee are pleased to have worked cooperatively on these issues.

John March 17, 2012 at 02:56 PM
He / She may all ready be on Their Way ...
Barbara Katz March 18, 2012 at 11:30 PM
I can't help but wonder why the article is so vague. As a taxpayer I would have expected our elected officials to be more "transparent" as that seems to be the buzz word they are so fond of. We pay 2 individuals over 1/4 of a million dollars a year to oversee our school systems funds and yet there seems to be a major issue with those funds.. It is curious that our Schools Superintendent sent out a "town wide" phone call to let us know that we "might" be getting funding assistance for yet another new school if we are lucky...boy I hope we are lucky enough to have our out of control taxes raised again. Point being, why has our Superintendent not felt the need to inform the taxpayers of this audit prior to now? I would think that everyone has numerous questions that should be answered. What prompted this audit? How much money are we talking about? When did the Superintendent and Business Manager and our "elected" School Committee know about this issue? Why is it being handled so covertly? This article leaves many unanswered questions, by our elected officials and by 2 town employees who are paid a considerable amount of taxpayers dollars. Which in my mind, makes them work for all the residents of Swampscott...am I wrong in making that assumption? I ask our elected officials and school department "officials" to truly be transparent and tell the residents of Swampscott what is really going on this with this audit....it is the right thing to do.
WhySwampscott March 19, 2012 at 02:10 PM
C'mon. Why should you expect these officials to actually explain to us how they have mis-managed OUR money. I mean, it is only the JOB of the "quarter-million twins" to be accountable and make sure there are no abuses with OUR funds. Since no one has been suspended pending an investigation, we are only left to assume it the 'alleged criminal' is someone no longer on the payroll. Let's see -- have any administrators left town recently? Hhhmmmm!?!? All that leave me wondering why NO ONE knew what was going on until AFTER the 'alleged criminal' left. The "quarter million twins" are paid to know these things about what is happening with OUR money. There is clearly a failure in our control systems if someone could get away with this, and a failure in leadership that allowed it to occur in the first place. So no, Barbara, you really shouldn't expect the rats to shine the light when it would glare most brightly on them. Transparency stops when it comes to THEIR abuse of OUR money. But don't be surprised if you hear lots of "its a shame this happened, but WE caught it" from the "quarter million twins". Don't let them kid you -- they get paid to keep the horse in the barn, not to tell us that it is gone until after the horse has left the barn.
David Whelan March 20, 2012 at 01:02 PM
Lou: You can not change the charter for the purpose of adding more transparency to the process. State law governs (and trumps) how a budget is presented at TM. I heard that the school's budget hearing was poorly attended. That's too bad! Dave Whelan
Glenn Paster March 20, 2012 at 01:42 PM
At the annual School Budget Public Hearing last Wednesday evening, no more than 10 people, including members of the media, were in attendance. This annual Public Hearing is mandated by state statute, http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXII/Chapter71/Section38N. The proposed FY 2013 school line item budget was, and is available online for anyone interested in reviewing the detail, http://www.swampscott.k12.ma.us/pages/SwampscottDistrict_Business/FY13%20budget.pdf Mr. Massei, if you have any questions, I know that any current school committee member would be happy to speak with you. The more people that ask about the school district, the better.
David Whelan March 20, 2012 at 01:50 PM
Glenn: Was Lou one of the ten people in attendance? Dave
Mary DeChillo March 21, 2012 at 04:47 PM
All Massachusetts local municipal boards and committees are governed by the MA Open Meeting and Open Public Records statutes. (see mass.gov website under "Open Meeting and Open Records"). The intent of these laws at the local level is to insure transparency about how business is done by public officials. However, built into the law are 13 (I believe) "exceptions" to when boards and committees are allowed to meet in "executive session" and out of public view. Records of these executive sessions must be released to the public at a later date and they become part of the official public record. Among the exceptions are 1)personnel issues (union grievances, individual employee performance, and 2)matters which may be or are currently being litigated (current or former employee lawsuits or suits brought by parents against the town/school). When lawsuits are settled between an individual and a town or the schools, a "non-disparage" clause is typically included which makes it illegal for the parties to engage in public criticism of the other party or other disclosure. The town's legal counsel and/or the school's attorney provide advice and expertise to the BOS and the SC about what constitutes grounds to adjoin into executive session. Curiously these statutes do not apply to the Governor, the legislative branch or the judiciary. (see the national report released Monday in the media and on-line rating the 50 states on government openness (StateIntegrity.org).
David Whelan March 23, 2012 at 09:20 PM
Major cop out Lou. Pick up the phone and call a SC member if you have questions. Go to a meeting and ask questions. Stop bitching and actually do something constructive.
Marianne Hartmann March 24, 2012 at 02:21 PM
Lou-I agree with you about the structure (and sometimes I wish I could fast forward through the boring parts as well). The thing is that the SC has to follow certain State mandates that require a meeting to run a certain way. At the very beginning of the meeting anyone can sign up for public comment and speak ( nothing needs to be submitted ahead of time for this) and is always at the beginning of the meeting so you don't have to sit through the whole meeting. Although the public comment period does not necessarily allow for a back and forth conversation, you certainly can ask questions and make commentsy and request a response from the SC. I agree that it can sometimes be a frustrating process and the open meeting law can make iteven more difficult but the SC does need to abide by certain laws as they relate to open meetings. For further info on the SC protocol go to: http://www.swampscott.k12.ma.us/pages/policy%20manual/Sect.%20B%20Board%20Governance%20&%20Operations.pdf


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