Audit Objective 

Determine whether any Livonia Central School District (District) officials had interests in District contracts that were not in compliance with the District’s code of ethics.

Key Findings 

A Board of Education (Board) member, who resigned on May 31, 2022, had prohibited interests in District contracts pursuant to New York State General Municipal Law (GML) Article 18.A prohibited interest occurs when an official has an interest in a contract with the school district which they have a power or duty to negotiate, prepare, authorize or approve; authorize or approve payment under the contract; audit bills or claims under the contract; or appoint an officer or employee with those powers or duties.

The Board member’s physical therapy company entered into six contracts with the District while he was a Board member which resulted in payments totaling $724,869 from August 5, 2017 through December 19, 2022.

In addition, the former Superintendent’s outside employment created an appearance of impropriety. The former Superintendent resigned on July 15, 2022.

The former Superintendent informed District administrators and staff of products and services provided by vendors that were recruited by, and partnered with, a company he partially owned. District officials contracted with 18 of these vendors, for a total cost of $656,579, of which $146,825 related to unnecessary or unused services.

The District lacked a formal procedure for identifying and reporting potential conflicts of interest until June 2021.As a result, District officials were not familiar with requirements of New York State General Municipal Law Article 18 as they relate to conflicts of interest. District officials did not fully understand the steps necessary to disclose a conflict and what constituted a prohibited conflict of interest. Had such procedures been in place, the conflicts of interest discussed herein may have been avoided.

Recommendations 

The audit report includes four recommendations to help District officials ensure conflicts of interests are avoided. District officials generally agreed with our findings. Appendix B includes our comments on the District’s response.