Le) State of Nete Jersey Curis Cusisre ‘Disarm oF Ebucstion ‘ancemer PO DEX sI0 Kin Guansavo. ‘ees, NY 08625. 0500, inant H yee Aus (Me. Dominic Miler, Board President Li Board of Education S Hunter Stost Lodi, NI 7544 Dear Mr. Miller SUBJECT: Ladi Public Schools _Legal Services Review (OFAC Cass HINV.130-17, ‘The Department of Education, Office of Fiscal Accountilty and Compliance (OFAC) complied review of the process and methodology uilized by the Lodi Public Schools (Distr to award Kgl services. AS a rel ‘tthe reviow, the OFAC has identified sees with employee hiring practices, The ses of noncompliance are ‘detiled inthe attache por of Examination. Please provide copy ofthe rept ach board mem. Utilizing the process outlined inthe attached “Procedures for LEAJAgeney Response, Corrective Action Plan and Appeal Proces.”the District is eguied, pursuant 10 NLA. 6A:23A-5.6, to puslcly review and Jiscys the findings in this report a a public bow meting no later that 30 days afer recep he report. Within 0 {ys ofthe public meeting, he hoor must adopt a resolution centiying thatthe findings were discus in Dblie meeting and uppeoving a Corrective Action Pin (CAP) to addres the Sues raised in the tpt i Sulbmit aa appeal of any Findings in dispute. A copy ofthe resolution and the approved CAP ano appeal must he sen! to thilfice within 10 days of adoption by the Booed Direct your response wo my alten, Also, pusuunt 1 NJ.A.C. 64:234-5.6(), you must post the findings of the report and the Discs cuccive section plan on your District's website Should you have any questions, please contact Manager, Investigations Unit, Sie Hor an ad Opera npr Prine 8STATE OF NEW JERSEY DEPARTMENT OF EDUCATION OFFICE OF FISCAL ACCOUNTABILITY AND COMPLIANCE, iv ONS UNIT ODI PUBLIC SCHOOLS LEGAL SERVI EW OFAC CASE IN REPORT OF EXAMINATIONLODI PUBLIC SCHOOLS LEGAL SERVICES REVIEW INVESTIGATIVE SUMMARY. (On August 2, 2017, the New Jersey Department of Education, Office of Fiscal Accountability sand Compliance (OFAC), recsived a complaint expressing concerns regarding the Lodi Board of Ediueation’s (Boatd) legal fees. In August 2017, the OFAC investigator initiated an investigation into the concems and conferred with individuals thought to have knowledge of the allegation. The investigator also reviewed relevant documents provided by the Lodi Public Schools (District) including Board minutes, purchase orders, payments, Board policy, employee contracts and legal services" invoices. ‘The investigation disclosed that tke Board employs an in-house attorney and also contracted with ai outside law Firm for special services. In Joly 2015, the Board approved a three-year contract hiring Alisa Nunno DiChiars, Esquire (Counsel), a an employee to provide general counsel services to the Board and on behalf ofthe Board, The annal Salaries for Counsel are listed as follows: + 2015-2016 $63,131.00 + 2016-2017 $64,394.00 + 2017-2018 $65,682.00 ‘The contract states: ‘Mrs. Nuno DiChiara will perform all ordinary legal services which will Inctude amtendance and representation at every other regular meeting, as well as meetings at whick the Board requires assistance of counsel; research, consultation and rendering of opinions on any and all legal questions confronting the Board and selected staff members . . . representations at all grievance and arbitration proceedings; legal drafting or review of legal documents, notices, contracts, and proposed polices. Mrs. Nunno DiChiara reserves the right to request additional fees for extraordinary services 10 be rendered over and above the annual salary which ‘encompass protracted ligation or protracted contractual representation. ‘The coniruct does not address work location, work days, work hours, sick leave, vacation leave ‘or any other employee henefits. Other employee contracts provided by the District reference: detailed job description, work week, daily hours, specific amount of sick and vacalion leave, health benefits, etc. Also, the contract does not clearly define the amount of hours Counsel is expected to work for the annual salary she is receiving. According to the District's Business Administrator, Mrs. DiChiara does not report to work atthe Disirict and performs her duties offsite. In comparison to other District employees, Mrs DiChiara, as an employee, does not receive tenure, health benefits, annual evaluations and sick or vacation leave. Mis. DiChiara does not report 10 a supervisor at the District and is not ‘committed 1 Disrict work schedule‘Report of Examination ~ August 2017 ‘Lodi Public Schools ~ Legal Services Review Page 2 Additionally, the contract did not define extraordinary services or the amount to be paid for these services. The investigilor reviewed a request for payment of the extraordinary services ‘submited by Counsel on the keerhead titled “Law Offices, William R. Nunno bill for Professional Services Rendered to date by Alist DiChiara, Esq.” showing Counsel charged the Distrit $7,654.00 ($160.00 houty) for services performed in the matter of Innisfree v. Lodi Board of Education, et al. Mrs. DiChiara bills the District as a vendor. Other District employees ate paid for overtime and serviees outside of their normal job description as a stipend, the amount of which, is typically know in advance of the service. Whereas independent contractorsvendors typically submit an invoice for services render at the conclusion of a ‘completed task ‘Also, during the same time period of Mrs. DiChiara' s employment, the Distit contracted with the law firm of Sciarrillo, Correll, Merlino, Mckeever & Osborne, LLC (Firm) for special counsel, specifically as & labor/negeliator forthe 2016/2017 and for the 2017/2018 sehool yeas, “The Firm's contract stated: ‘The Firm shall perform the duies of counsel forthe Board in accordance with the Laws of the State of New Jersey and the polices, practices, rules, regulations and directives established by the Board. The Firm shall be paid at an hourly rate of $160.00 for basic consultation services, research, drafting and preparation of documents, agreements, liigation, and all other services ‘associate with representing the Board in matters the Board assigns to counsel ‘A review of the Firm's billing statements disclosed multiple line items of legal services rendered for services listed on Counsel's contract. According to the Frank Quatrone, Superintendent, Counsel could not represen the District for those services due toa conflict of interest. Counsel's brother-in-law is the District's High School principal and any matters arising from the high school warranting legal services would be assigned to the Firm. Additionally the Firm billed the District for preparation and attendance of Board meetings that Counsel could notated which is also listed asa duty in Counsel's contract ‘onelusi ‘The District filed to clearly define the job description, job duties, work hours and also failed to ensure the supervision of Counsel by a District Administrator. The Disirit should utilize the IRS Independent Contractor! Employee guidelines 1o determine the status of employees Recommendation ‘The District shall prepare a Corrective Action Plan indicating the measures it ensure consistent employee hiring practices. will implement to