FLINTON - A federal investigation is under way in the wake of a state audit that alleged financial misconduct by former Glendale School District Superintendent Dennis Bruno, the Mirror has learned.
The state Auditor General's audit, released Wednesday and commented on Thursday by current Glendale officials, addressed eight problems - some of which may cost the district at least $70,000 from future education disbursements.
District officials did confirm Thursday that they were not aware that the district or its school board is under investigation. They also said they couldn't add further comment about the investigation, which was cited in the Auditor General's audit.
View clips from the Glendale press conference.
Bruno did not return e-mails and phone calls asking for comment. A statement issued through his Johnstown attorney, Art McQuillan, said Bruno "recognizes some irregularities have taken place and is working with authorities to resolve those issues."
After Bruno's suspension and retirement in 2008 and the auditors' findings, school board President Andy Mulhollen and fellow school district officials said they now realize that was only part of the "betrayal" and hard lessons the district suffered under its former administrator.
Mulhollen said it wasn't long after he was elected to the school board in 2007 that he started realizing that "something wasn't right" with the district's finances.
There were credit card statements and cell phone bills that were never approved - and plenty of "fuzzy math," he said. Budget plans seemed to require a secret decoder ring to decipher.
District officials said they are much wiser for the experience and hopeful that mechanisms are in place to ensure "this will never happen again."
"We cannot live in the past but must learn from [it]," said Superintendent Arnold Nadonley, hired in 2009 as the audit was under way. He followed interim superintendent Patrick Lukasavich, who was hired in August 2008.
"[The district's] Viking ship has been righted and is no longer taking on water," he said.
District solicitor Aimee Willett stressed Glendale officials have been working to correct some issues since 2008. The district takes the report and its findings "very seriously" and feel they have already addressed many of the issues outlined in the state Auditor General's 40-page audit.
Other findings has prompted the district to explore its own "options" on how to recoup the money, said Willett, who declined to comment further.
Those findings touched on many of the onetime highlights of Bruno's nine-year tenure at Glendale.
As superintendent, the educator put the tiny district of 848 students in kindergarten through 12th grade on the map for years as a technology leader, securing grants for high-tech education tools and starting programs that drew attention, including a partnership with Chinese educators that made Mandarin a language course, before leaving under board suspension in late 2008.
Audit findings show some of that funding was secured inappropriately and spent the same way.
Physical education funding landed over a three-year period was spent without seeking bids, and some of the money was used as stipends to Bruno and two fellow administrators, despite the fact it was known to be impermissible, auditors wrote.
A contract with Ming Chuan University of Taiwan for second language internships was never given board approval, they wrote. It was the the same with a Sam's Club credit card, and potentially others, that Bruno secured in the district's name and submitted to the district for payment without board approval, the audit added.
For years, Mulhollen said the board didn't realize Bruno was spending thousands of dollars at the district's expense or that the cards weren't approved.
"We knew there was a Chinese program but we didn't know what kind of contracts were being entered into under it," he said. "In a lot of cases, things were being awarded because members thought they were bid out - but they weren't."
As of now, the school will owe only $2,300 in penalties - most of which stem from hiring uncertified teachers to handle Bruno-led Chinese and information technology courses.
The district learned in the last month about the three $5,700 stipends and is working with auditors to sort the matter out, Willett said. As for payroll and budgets, steps have been taken to ensure there is now a "chain of command" and new billing programs that better outline spending and revenues.
Office staff have been trained on related state guidelines and receive ongoing training for computer programs, Mulhollen added.
Unlike a previous audit, which was not shared with fellow administrators, staff and apparently many board members, this and future ones will be distributed to stress "transparency" and fix issues, Nadonley added.
Mulhollen said that five board members, including himself, Rick Holes, Ron Jasper, Ken Mencer and Kent Ford all joined the board in 2007 or later, and "newer members" quickly started questioning practices that were OK'd by a previous regime.
"It seems there was a time where it was assumed everything was OK because there were policies in place for the previous superintendent, and it was assumed he was following those policies," Mulhollen added.
"Communication is so key," Nadonley said. "And there were instances that, it seems, issues didn't come to the board because they weren't shared."
Mulhollen described Bruno cautiously.
"I feel we were sold a bill of goods, so to speak," he said, adding the board feels "betrayed" by his actions and promises. "He pointed us in the technology direction, which was good."
But many of those efforts were underutilized and relied on complicated grants that the district was better off without, Nadonley suggested.
Other programs, like Bruno himself, "weren't what they seemed to be," Mulhollen added.