Published: Tuesday, December 12, 2006
Audit: Transport costs excessive
Transportation costs increased by more than $780,000 over a seven-year period.
By LAURE CIOFFI
NEW CASTLE, Pa. The New Castle Area School District substantially exceeded the state's allowance for transportation costs far outpacing all other districts across the state, according to the Pennsylvania Auditor General.
Auditor General Jack Wagner released the district's performance audit report Monday and made special note of its transportation spending from 1997 through 2004.
The state provides a formula allowance for the amount of money a district can spend on transportation costs for pupils.
According to the report, 507 school districts had pupil transportation costs for the 2003-04 school year. About 28 percent paid their contractors the state's final formula allowance or less. An additional 22 percent paid less than 10 percent over their final formula allowance. In that same school year, New Castle paid its contractor 64.37 percent over the state formula.
Wagner, in a news release, said he urges the district to closely monitor its transportation spending.
Costs rise, pupils decrease
Auditors disclosed that New Castle's transportation costs increased by more than $780,000 from the 1996-97 school year to the 2003-04 year. During that time, the number of pupils riding buses decreased from 2,883 to 2,757, while the number of vehicles increased from 23 to 26.
The district contracts its transportation services through Laidlaw Transit, whose local manager is Karen DeCarlo, a member of New Castle City Council and a former member of the board of directors for the nearly defunct Affordable Housing of Lawrence County.
The contracts were negotiated by Nick DeRosa, who has since retired as assistant schools superintendent.
According to the auditor general's report, the district last solicited bids for transportation in 1996. When that contract ended, the district just extended its contract with Laidlaw and did not solicit bids.
The auditor's report states that the 1996 contract included a clause that limited the annual contracted cost increase to the annual consumer price index used by the department of education. That clause was removed when the contract was extended for the 2001-02 through 2005-06 contract.
New Castle Schools Superintendent George Gabriel did not return a call for comment. The person answering the telephone in his office said the district had not received a copy of the report as of Monday afternoon.
According to the audit, the district waived the opportunity to respond to the transportation costs information at the time of the audit.
The audit also addressed errors in reporting financial information and improperly transferred funds from reserve funds to the general fund.
The district, in its response in the report, noted it had three different business managers over a nine-month period, which resulted in the errors.
School officials also were chided for questionable control over conference travel expenses in the report.
The findings included there was no board approval obtained before travel occurred; reimbursement was made for nonallowable expenditures such as alcohol; there was a lack of receipts or expense reports for travel; and existing receipts lacked detail.