Prudent trusteeship of the resources of this district dictates that employees responsible for the safekeeping of district funds be bonded.
FORT CHERRY SCHOOL DISTRICT POLICY No. 811
SECTION: OPERATIONS
TITLE: BONDING
ADOPTED: March 27, 1995
http://fortcherry.schoolwires.net/fortcherry/lib/fortcherry/_shared/District_Policies/800_Operations/811-Bonding.1.pdf
As stated in the October 11th post, FC Business Manager, Paul Sroka, filed Chapter 7 Bankruptcy in 1996 (20 year disposition). http://fortcherryinfo.blogspot.com/2011/10/fort-cherry-issues-veiled-legal-threat.html
Back in July of 2009, a resident made a right-to-know request for the bonding information of Fort Cherry employees and board members.
On Mon, Jul 20, 2009 at 10:35 AM, xxxxxx wrote:
To Mr. Sroka
Paul,
In accordance with Pa Right To Know Law I respectfully request the following,
1) A list of all Fort Cherry School District individuals that are bonded
including the Board Members
2) Their titles
3) The amount each is bonded for each fiscal year
Thank you,
To Mr. Sroka
Paul,
In accordance with Pa Right To Know Law I respectfully request the following,
1) A list of all Fort Cherry School District individuals that are bonded
including the Board Members
2) Their titles
3) The amount each is bonded for each fiscal year
Thank you,
The following documents were provided by Fort Cherry’s Open Records Officer, Paul Sroka, in response to the request.
ü DISTRICT EMPLOYEE BLANKET BOND
ü BOARD SECRETARY BOND
ü BOARD TREASURER BOND
????
The treasurer bond Sroka provided covers Robert Rutledge as the Board Treasurer.
As of the date of the request, July 2009, Rutledge had been off the board for years. Elmo Cecchetti was the Treasurer at that time.
FC District Policy 811 states that bonds are renewed annually.
Enumeration and valuation on such bonds shall be determined annually.
FORT CHERRY SCHOOL DISTRICT POLICY No. 811
SECTION: OPERATIONS
TITLE: BONDING
ADOPTED: March 27, 1995
· Shouldn’t the bond reflect the current treasurer?
Where’s the bond for the Business Manager? The resident who made the original request posed that very question to Sroka.
Sroka’s response:
From: Paul Sroka <psroka@fortcherry.org>
Date: Mon, Jul 27, 2009 at 3:38 PM
Subject: Re: Bonding update
To: xxxxxxx
Subject: Re: Bonding update
To: xxxxxxx
xx. xxxxxxx:
No the one bond document covers all employees. While the separate bonds cover myself and Treasurer since we have authority to sign checks.
Paul
· Is Sroka required to be bonded as Business Manager?
According the Pennsylvania School Boards Association, the Board Secretary and Treasurer MUST be bonded. Business managers are not required to be bonded, but often are.
We again are providing you with a summary of the bonding requirements for school officials that hopefully will clarify questions regarding bonding/crime insurance.
The long and short of it is that the board secretary, treasurer and depositories of school district/intermediate unit/joint school funds MUST be bonded, except that no bond can be required for depositories if everything is FDIC insured.
Business managers per se are NOT required to be bonded, unless serving as one of the foregoing officers, but they often are bonded anyway. Bond amounts usually are determined by the school board, and school boards are authorized, but not required, to pay the premiums. Tax collectors also must be bonded, and school districts usually must pay a share of the premium.
Pennsylvania School Boards Association
The Risk Manager
March 2008
Business Managers are not required to be bonded.
Sroka is bonded as an employee of the district under the $50,000 blanket bond; but to truly follow Policy 811 (prudent trusteeship), shouldn’t he be separately bonded as Business Manager?
Sroka manages a $16 million budget. Is a $50,000 blanket bond enough?
· Can Sroka acquire bonding and at what cost?
In a March 18, 2010, article that appeared in the Observer-Reporter, Washington County Supervisor Larry Spahr spoke of the difficulties encountered in bonding tax collectors who had filed for bankruptcy. Spahr commented on the tight bond market as the problem.
Wouldn’t the same difficulties apply to the bonding of anyone who declared bankruptcy, including Board Secretaries and Business Managers?
. . . A tight bond market is being blamed for Union Township tax collector Pamela Lawrence missing the deadline.
On March 9, Union Township supervisors learned that the newly elected tax collector was denied insurance from a number of bonding companies, Supervisor Larry Spahr said.
Lawrence and her husband, Tracy, were discharged of their debts last month in federal bankruptcy court, court records show.
“The bond market is tight,” Spahr said. “They are going through their records with a fine-tooth comb.” . . .
Observer-Reporter
March 18, 2010
Full article at the end of this post
Here’s a little background information about surety bonds:
Those who secure a surety bond in Pennsylvania provide protection for the people of the state by financially guaranteeing the quality of their work. The specific type of surety bond the individual or business gets determines the type of protection it provides, as not all bonds work the same.
The Pennsylvania state government often requires individuals or businesses to secure a surety bond to discourage them from participating in fraudulent activities. If the principal (or bonded entity) chooses to behave unethically, then the consumer (or obligee) can make a claim against the bond. If the claim is proven to be valid, then the surety company would compensate the wronged obligee for damages, and the principal could be left paying retribution up to the bond's full value. Thus, unlike an insurance policy that covers predictable financial losses, bonds aim to prevent unethical business practices-or else face reparation.
How much will I pay for a bond in Pennsylvania?
Surety bond rates and premiums in Pennsylvania vary based on a number of factors, including the principal's credit history and the type of bond being issued, among other determinants that a surety company might consider. Surety bonds usually cost between 1 and 3 percent of the bond's face value. For instance, if the desired bond amount is $10,000, the bond would probably cost around $100 to $300 for a typical principal with a good credit report. However, the cost of the bond will be higher if the principal's financial history has negative marks, as the surety will be taking a greater risk in backing the principal's work. If a principal has a poor credit history then he or she will need to find surety bond agency like Surety Bonds.com that issues non-standard (or bad credit) bonds to high-risk clients.
http://www.suretybonds.com/states/pennsylvania.html
According to the documents provided by Sroka, the blanket bond insurance is obtained through McMahon, Kenneth & Associates. Are they in the business of providing non-standard (or bad risk) bonds to high-risk clients?
· Is Sroka considered a high risk client?
One more thing, when the Tribune Review’s investigative reporter, Robin Acton, made a RTK request for bonding information, Fort Cherry denied her request, claiming the bonding information “did not exist”.
(See page 2 of the Office of Open Record’s Final Determination, Acton v Fort Cherry School District, AP 2009-0926 http://www.scribd.com/doc/58427427/OOR-2009-0926-Acton-Fort-Cherry-SD)
As you can see on her RTK shown below, the language of Ms. Acton’s RTK request was similar to that of the resident’s July 2009 request.
· The bonding information was given to a resident, but not to an investigative reporter.
????
Why does bonding matter?
· Bonding matters because the Business Manager handles ALL the money of the Fort Cherry School District.
· Bonding matters because by FC district policy, the Board is required to practice prudent trusteeship.
· Bonding matters because by FC district policy, District funds should be kept safe.
The residents, taxpayers, students, and staff deserve nothing less.
Note:
Board members, including Brant Miller and Ray Miller were personally told of Sroka’s Chapter 7 bankruptcy in 2009.
Also in 2009, Sroka filed false criminal charges against a resident in what appeared to be retaliation for speaking out against him at a board meeting. The charges were eventually dropped just days before Christmas 2009.
Board members knew, and some even admitted that the resident had a good reason to sue the district. (As stated in the October 11th post, the resident did file a Federal Civil Rights lawsuit against Sroka and the district. http://fortcherryinfo.blogspot.com/2011/10/fort-cherry-issues-veiled-legal-threat.html.)
Knowing all this, the board renewed Sroka’s contract in January 2010.
Full version of the Observer article referenced in the post:
==================================================
County tax collectors fail to file bonds
--------------------------------------------------
Observer-Reporter (Washington, PA)-March 18, 2010
By Linda Metz, Staff writer
Municipal tax bills are being prepared to be sent to taxpayers within the next few days.
However, tax collectors in 17 Washington County municipalities won’t be able to collect the taxes because they’ve failed to file their bonds with Washington County Court.
Clerk of Courts Barbara Gibbs released a list Wednesday of those tax collectors who did not meet the March 15 deadline to file a bond, which guarantees at least 30 percent of the taxes they anticipate to collect for both their municipality and school district to ensure taxes are collected and dispersed appropriately.
Named on the list are: Meg Byron Malady, Charleroi; Delmar L. Cook, Claysville; Teresa Copul, Coal Center; Darcy Lynn Phillips, Dunlevy; Bernice A. Skobel, East Bethlehem Township; Milton J. Schuler Jr., East Washington; Joni J. Pollock, Elco; James T. Puskavich, Ellsworth; Wayne E. Ray, Fallowfield Township; George E. Elish, Jefferson Township; Renee Lynn Rudinsky, Marianna; Barbara A. Reis, North Charleroi; Patricia Cairns, Roscoe; Joanne Garritano Lombardo, Smith Township; Jackie F. Galiffa, Speers; Roberta A. Minardi, Twilight; and Pamela Perry Lawrence, Union Township.
Once the bonds are filed, it’s up to President Judge Debbie O’Dell Seneca to review them and certify the individuals as tax collectors.
According to O’Dell Seneca, bonds begin coming before her in January and most are cleared well before the filing deadline. However, this year has been unusually slow.
“Usually the month of January is crazy for me,” she said. “For some reason, they’ve been taking longer and longer to filter in.”
The judge, along with Gibbs, explained that once a person’s election as tax collector is made official, information is sent detailing the responsibilities and duties, including the filing of the bonds. They are also warned that they cannot collect any taxes without first filing their bonds.
School district taxes are not usually sent out until mid-year.
A tight bond market is being blamed for Union Township tax collector Pamela Lawrence missing the deadline.
On March 9, Union Township supervisors learned that the newly elected tax collector was denied insurance from a number of bonding companies, Supervisor Larry Spahr said.
Lawrence and her husband, Tracy, were discharged of their debts last month in federal bankruptcy court, court records show.
“The bond market is tight,” Spahr said. “They are going through their records with a fine-tooth comb.”
Union supervisors held a special meeting Tuesday to discuss the legalities and requirements of appointing a new tax collector, he said.
“It’s a very serious situation,” he said. “The tax notices have already gone out.”
But others missed the deadline due to personal and health reasons, or simply an oversight.
Cook said he has been having a hard time getting to Washington to file the bonds becaue of health problems. However, he pointed out that tax bills don’t go out until April 1, and he plans to file before then.
“I’ve already talked to the clerk of courts about it,” he said.
Skobel, who was elected to her first full term as tax collector last year, said she has been dealing with personal and health problems.
East Washington secretary Heather Walsh, who called the Observer-Reporter on Schuler’s behalf, said he also was just elected and was not aware that he had to file the bonds that have been secured by the borough.
“I don’t think he knew that,” she said.
Meanwhile, Minardi said she had talked to the insurance company about the bonds and is waiting to hear back. Minardi was also recently elected to her first full term as tax collector.
“It was my understanding that it was all taken care of,” she stated.
Staff writer Scott Beveridge contributed to this report.
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