Dear Commissioner Elia,
Years ago I noted publicly that our infamous cosmetic rider to the teachers’ contract required the administrator, in this case, Blue Cross/Blue Shield, to receive from the teacher applying for the benefit a letter from a physician stating that the procedure was “medically necessary.” I asked the administration for statistics to determine if this procedure was being followed by BC/BS. I couldn’t get a reply. You see, BC/BS was not incentivized to hold to the strict requirement. They received a percentage commission/fee from the District only for funds paid out, so to deny a benefit was not in their pecuniary interest.
So years later along comes the IRS and they say the District owes millions of dollars in taxes for the gifts given to the teachers for procedures that were not medically necessary. They held the district liable for taxes that should have been paid as income by the teachers. The assessment issue was covered up by the administration and wasn’t disclosed to the Board of Ed until recently when the Board was asked to approve a settlement with the IRS. Why was nothing said? Why the cover-up of incompetence? Simple. Barbara Nevergold and Kriner Cash didn’t want BC/BS to get a blemish on their record. Why? Because Kriner Cash had solicited BC/BS to give a well-paying job to his lame son, and there was a quid pro quo. The conflict is obvious. Yes, the Superintendent’s son was hired by one of the Board’s largest vendors and there was no public disclosure to the entire Board of the conflict. BC/BS should be held responsible for the losses incurred through their misfeasance. This matter must be referred to the State Attorney General for investigation.
For decades now the district has had an unexplainable and irresponsible relationship with its school engineers/custodians. They get a salary for their positions as engineers and they also get an undefined annual stipend of hundreds of thousands of dollars for cleaning, attending off-hour events, security, etc. The formula used to determine the size of the stipend is unknown. The custodians have taxes withheld from their paychecks and apparently declare that income but the IRS found that the custodians don’t declare their stipends as income and show their expenses as an offset. Did they receive 1099s from the district? Instead of chasing the custodians for the taxes due, the IRS pursued the district. This issue was also never disclosed to the Board until the $8 million or so settlement was reached and they needed Board approval to pay the claim. This matter should also be referred to the State Attorney General for investigation.
The third subject of the IRS assessment was the payments made to parent facilitators over the years. Once again the district has been assessed what should be paid in income tax by the parents. Were they ever given a 1099?
Very truly yours,
Carl P Paladino