LaGrotta offers glimpse into city schools audit

January 19, 2006

PAT LITOWITZ
plitowitz@ncnewsonline.com

State Rep. Frank LaGrotta provided the New Castle school district a glimpse into its audit meeting set for Jan. 19.

The words "significant" and unexplained" will be part of the conversation, the legislator suggested Jan. 18.

"Sources inside the Auditor General's Office have informed me that a preliminary audit of the New Castle school district's transportation contract has revealed potential significant and unexplained overpayments to the transportation company."

Superintendent George Gabriel, business manager Joseph Ambrosini and school board members will learn about the audit findings from state officials. While it was expected the findings would center on Laidlaw Transit, the district's transportation provider, the severity and dollar amount are unknown to school officials.

Gabriel said he could not comment on LaGrotta's statements because he had not seen the audit.

The superintendent had agreed to open the meeting to the media, but the auditor general's office refused.

Kevin Barwin, a regional supervisor with the state's school audit team, said the meeting is not covered under the state's Sunshine Law. He said ideally, the report should be available to the public within 90 days.

"Obviously, I would like it to be as timely as possible," he said of the report's release.

LaGrotta said he had approached the auditor general's office regarding the district's transportation contract. He cited "allegations of an improper relationship between the school district and Lawrence County Affordable Housing."

The mission of the nonprofit agency, spun off from the Lawrence County Housing Authority, is to provide reasonably priced housing for handicapped individuals and senior citizens. The group has come under scrutiny for its purchasing practices involving real estate and the mass exodus of its board members.

Additional questions regarding its laundry contract and dwindling finances have left Affordable Housing's viability in doubt.
The school district itself has no relationship with the agency. However, Nick DeRosa, assistant superintendent, entered into four real estate transactions last month with Affordable Housing.

Karen DeCarlo, a manager with Laidlaw Transport, is a New Castle city councilwoman and a former Affordable Housing board member. During her tenure on the board, DeCarlo voted in favor of purchasing the properties from DeRosa and his business partner, John Orlando.

DeCarlo said last month she was not told DeRosa had a role in the sale.

The potential for conflict comes into question because DeRosa negotiated the district's transportation contract with Laidlaw. DeCarlo had stated previously she played no role in obtaining the contract with the school district.

"In light of the perceptions of impropriety created by the news stories on Affordable Housing and its activities, I thought it was very important that taxpayers receive assurance from the state that their tax dollars were being properly utilized," LaGrotta said.

At the time LaGrotta approached the state for its assistance, he was advised an audit already had taken place.

The school district has been addressing issues about its transportation program since 1992.

Previous audits have cited the district for insufficient documentation, ineffectual internal control and lack of board policy regarding the program.

Copyright (c) 2006, New Castle News