Flaws fed the Roslyn schools scandal

A combination of poor decisions, misplaced trust and neglected financial controls created a climate that allowed a top official to allegedly steal millions from the Roslyn public schools and nearly get away with it, officials say.

The internal auditor responsible for checking records every month never reported any signs of fraud, the school district says.

It took years for independent auditors to detect a problem, and when they did, in 2002, a school board wary of a public scandal did not report the allegations or order a more extensive audit. Instead, it allowed chief financial officer Pamela Gluckin to retire after repaying the money - believed then to be $250,000.

School officials even let Gluckin - who is accused in a district lawsuit of destroying documents - to return to work for at least one day after she knew the district was investigating her, school officials acknowledged yesterday.

"Should we have been more diligent in our looking at the financial aspect of things?" said school board president William Costigan. "We had systems in place, we had internal auditors, we had independent auditors and we rely on their information and our administration in making decisions."

And while state Comptroller Alan Hevesi has announced he will audit the Roslyn school district's books, such oversight by state agencies has grown rarer in recent years, according to some school officials.

With Gluckin now charged with first-degree grand larceny and Roslyn's finances still under investigation by the Nassau County district attorney, many other school systems are examining their own financial controls more closely.

"There is no foolproof or fail-safe system," said Rockville Centre Superintendent Bill Johnson. "All you want to do is make sure there are enough controls to catch it."

Spreading responsibility around so that, for example, the person who orders supplies is not the same person who signs checks to pay for them is among the controls used by Rockville Centre to avoid putting too much authority in one person's hands, Johnson said.

But in Roslyn's case, the highest-ranking financial official allegedly was at the center of the fraud and had the means to circumvent any controls. As assistant superintendent for business and finance, a post she held nearly four years, Gluckin had access to all records and bills and supervised all employees with access to records and bills, according to records.

"In a situation where you have the primary person responsible for the control who's the one deviously plotting how to beat the system, how can you have control?" said Andy Miller of Miller, Lilly & Pearce, the East Setauket accounting firm that was Roslyn's independent auditor. It detected the first evidence of fraud during its annual audit in 2002, and after going through five years of records in mid-October of that year, determined Gluckin had allegedly stolen $250,000.

Last week, the district fired the firm because of its failure to immediately uncover the full extent of the alleged embezzlement, now believed to be several million dollars, the school board said.

The board's former internal auditor, Albert Razzetti, whose contract was not renewed last July, could not be reached for comment.

George A. Perry was an upstate schools superintendent from 1966-1992 and saw a sharp decline in funding for state audits during the mid-1970s fiscal crisis - a decline that has never been reversed. "The State of New York used to audit districts at least once in a three-year period," Perry said. "Since the cutbacks, you get an audit once every 10 years, if there's a problem."

Hevesi spokesman Jeffrey Gordon said that in addition to full district audits, the office does many more partial audits, targeting specific problems.

In 2003, the agency conducted partial audits of about 50 districts and full audits of eight, he said.

But usually, detecting fraud falls to local officials.

Miller said yesterday his firm is examining its own procedures to determine whether changes are needed. The firm does auditing work for more than 50 Long Island school districts.

Cliff Saffron, a Roslyn resident who ran unsuccessfully for the school board last month, said debating who should have caught the embezzlement first is beside the point. The issue, Saffron said, is what was done once the first evidence was found. "This board, having been made aware of certain facts, did nothing to assure itself that it wasn't more widespread," he said.

Instead, on the night in October 2002 that Miller and a team of accountants uncovered the evidence of alleged fraud, Miller and Superintendent Frank Tassone called Gluckin from the district's offices to ask a question about Home Depot bills being examined, school officials confirmed yesterday.

It wasn't until that Friday that Gluckin was confronted with the full weight of the evidence against her and escorted from the building, they said.

Tassone couldn't be reached for comment.

Costigan said yesterday that he was not aware of the sequence of events until at least several months later. "In hindsight," he said, "if, in fact, district records have been destroyed or are missing, that certainly hasn't helped us."