FOCUS: SCHOOL FINANCES
Falls school chief used district credit card at will
Granto charged golf trip, an $807 dinner and 25 percent tips
NIAGARA FALLS — As chief of the Niagara Falls School District, Carmen A. Granto has overseen more than $1 billion in spending on city schools.
His knack for fiscal management has been praised, and the superintendent often has bragged about the 16 straight years the district has held the line on its tax levy.
But while Granto was cutting jobs, closing schools and chasing grants to balance the books, he and other district officials were enjoying some perks on district-issued credit cards, a review by The Buffalo News has found.
Before state auditors intervened earlier this year, Granto was allowed to use his credit card at will, with no limits, as part of his contract approved by the School Board.
He was a good tipper, leaving an average of 25 percent on expenses examined for 14 meals. The card also was used for rides between airports and hotels that cost as much as $250, and for $315 in charges from a limousine service to rent a car for an urban superintendents conference in Palm Springs, Calif.
In the time period examined by The News — July 2004 to last June — other expenses included:
• $1,664 for a rental car in Fort Myers, Fla., over a 26-day period in March and April 2005.
• Two golf outings, also in 2005, that each cost about $1,200.
• An $806.74 dinner July 21, 2006, in La Jolla, Calif., and $77.02 for drinks the same day, including $30 for Corona beers and a $9 Grey Goose vodka.
It’s unclear how much of this spending Granto did on his own because records suggest he lent the card to others to use.
The records also are frequently incomplete, missing information about the reason for the purchase or exactly what the expenses were for.
How bad was the record-keeping?
Records for a golf trip that included more details than many of his credit card expense forms included a note — apparently left by a district finance office employee — that said, “Yeah, a receipt!”
‘Let taxpayers down’
These, and thousands of dollars worth of other questionable expenses, followed a 2004 audit by the state Education Department warning district officials they needed to tighten controls over spending, including the use of district credit cards.
The state comptroller’s office reported last month that district leaders ignored that recommendation and ripped the district in a blistering audit that criticized Granto and other top workers, including a veteran business administrator who unexpectedly retired early as auditors completed their review of district records.
“The school district let taxpayers down,” State Comptroller Thomas P. DiNapoli said in releasing his audit, which covered the period from July 2005 to last December.
The district is among the poorest in the state, with slightly more than 60 percent of its students qualifying for free or reduced-price lunches.
The School Board, the audit said, “failed to protect the interests of the taxpayers.”
The review of district spending raised enough concern in the comptroller’s office that auditors have asked federal investigators to help with a closer look at district finances.
The audit recommended 33 courses of corrective action, including disciplinary action against James J. Ingrasci, the since-retired business administrator, as well as Lawrence “Butch” Beyer, the operations and maintenance supervisor, and other applicable department heads.
Granto said he accepts responsibility for the financial missteps.
“Should I have let it go? No. I should have stuck my nose in,” he said.
“We tend to have employees here for a long time,” he added. “Everybody knows each other. Everybody knows that nobody’s cheating here. So we got lackadaisical. We got sloppy, and even lazy, on some things like record-keeping when we shouldn’t have. No question about it.”
Granto said corrective actions included the purchase and installation of a new computer software program called Finance Manager, which tracks all expenses and flags improper spending.
The superintendent had announced before the start of the school year he would retire June 30. In the wake of the revelations on district spending, he has pushed up his departure to Jan. 1, citing his desire to spend more time on his thriving consulting business.
The School Board must adopt a corrective action plan dealing with all the problems revealed in the audit by Jan. 5.
Granto was heavily criticized in the audit. It cited the district for paying him $10,800 during the 2004-05 school year for 21 vacation days that he was not entitled to. It also said Granto used his district credit card to pay $2,200 in travel expenses for a trip he took for his private consulting business, Border River Management.
Granto said he has reimbursed the district for spending the comptroller’s office deemed inappropriate.
The News asked to review credit card records after the comptroller’s audit was released, and has done so over several days this month.
Questionable expenditures included:
• Under Granto’s watch, Deputy Superintendent Cynthia Bianco, his sister, cashed in 100,000 frequent-flier miles she had accumulated over 10 years of flying on district business and personal trips, and used them to pay for a trip to Fort Myers, Fla., for her mother and husband. The board has no policy on frequent-flier miles, Bianco said, noting the board should examine that issue.
• Beyer, the operations supervisor, and two other school officials shared a meal in July 2004 at Lewiston’s Water Street Landing. Their bill came to $226.56 — including a $50 tip.
• In October 2007, Granto spent $250 on a car service to and from John F. Kennedy International Airport in New York City.
Granto reimbursed the district for the rental car in Fort Myers and $52 for alcohol from the July 2006 trip to California, but not for the $800 meal at a conference also attended by other district staff. The district also paid for the JFK car service, a limo ride he and another staff member took to attend a state School Boards Association dinner in New York City honoring Falls Board Member Don J. King as the state’s Board Member of the Year, a district financial official said.
School Board members have been meeting in private during the last four weeks on corrective action recommended in the comptroller’s audit, including possible discipline.
They aren’t the only board members in Western New York to have grappled with such issues in recent years.
Paul J. Grekalski was forced to retire in 2005 as Orchard Park superintendent after his board discovered someone had made 39 calls to escort services and sex chat lines on his district- issued cell phone and had charged $3,191 in personal expenses — which he later reimbursed — to a district credit card board members didn’t know he had.
Niagara Falls School Board President Robert Kazeangin Jr. said the problem in Niagara Falls has nothing to do with bad or potentially criminal behavior, and that the audit only referred to taking “appropriate action” in Granto’s case.
“It never says disciplinary action,” Kazeangin said. “I don’t think Carmen’s done anything intentionally. I think sloppy bookkeeping is the main problem. . . . The idea of punishment [for Granto] has not come up in any board conversations.”
Review continues
While the School Board seeks a new schools chief, Granto’s sister will serve as interim superintendent.
District record-keeping, meanwhile, has been changed.
The district has discontinued the use of credit cards and requires all employees to go through Purchasing Director Marie Maynard if a purchase is needed, Granto said.
The review of the district’s business practices continues.
Asked if it is routine for the comptroller to investigate beyond an audit, Emily DeSantis, spokeswoman for the state office said, “I don’t know that I’d categorize it as routine.”
“When we feel an audit warrants referral to law enforcement, we do refer audits, or, in some cases, we work with law enforcement to further investigate outside an audit,” she said.
pwestmoore@buffnews.com and abesecker@buffnews.com
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