TRENTON — The Buena Regional School District for two years did not follow some state and federal financial regulations and erroneously paid out $35,469 in health insurance waivers to employees already receiving benefits, according to an audit of the district released by the state comptroller Friday.
According to the report, acting Comptroller Kevin D. Walsh found that between July 2015 and June 2017, Buena failed to verify incomes for participation in the free and reduced-price meal program, did not properly advertise when procuring insurance brokers and did not follow the terms of its employee contracts for payout to employees opting out of health insurance.
Spokeswoman for the State Comptroller Megan Malloy said that the audit officially started in 2017 and “is a standard audit of school districts that our office performs pursuant to our authority.”
Buena Regional Superintendent David Cappuccio Jr., who began in the district during the 2018-19 school year, said the district has been in communication with the state office and a formal corrective action plan will be presented at the August school board meeting.
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“The district takes these matters seriously, and the Business Office has already begun correcting these issues prior to the release of the formal report,” Cappuccio said.
During the time frame covered in the audit, Buena underwent several administrative changes. Business Administrator Pasquale Yacovelli and Superintendent John DeStefano were both hired in the 2014-15 school year. DeStefano resigned in February 2017 “and retired for medical necessity,” according to Press archives.
According to the comptroller’s report, Buena Regional could do more to comply with state and federal regulations and save taxpayer money.
The report found that children from households that are ineligible for the National School Lunch Program received free or reduced-price lunches because the district did not follow verification guidelines from the U.S. Department of Agriculture, specifically for applications that reported zero income.
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In addition, the report cited a lack of transparency in the district’s procurement of insurance brokers. Particularly, the report found that two contracts awarded to the district’s insurance brokers failed to meet standard requirements for transparency because they were not reported in the district’s designated newspaper, nor did the district file required documentation that the insurance broker’s contract was exempt from going through a formal bidding process. Additionally, the health insurance broker failed to inform the district whether the broker would receive any commission, service fee or valuable consideration as a result of selling a health insurance policy or contract.
Finally, the report found the district did not adequately monitor health insurance coverage and, in some cases, gave duplicate health benefits to employees.
In the 2017-18 school year, $30,189 in opt-out waiver payments were given to six couples in which both individuals were employed by the district. Three more employees received $5,280 in improper opt-out payments because they were also receiving benefits from the district.
During this same period, the district was facing a budget shortfall of $800,000, forcing cuts to personnel and programming.
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