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Audit finds Hopevale lacked fiscal oversight

Lax accounting practices and a lack of fiscal oversight allowed a Hopevale School District business manager to steal $108,000 in district funds, according to an audit released by the state comptroller's office Tuesday.

"More than $100,000 of Hopevale taxpayers' money was lost because fiscal monitoring responsibilities were ignored," said State Comptroller Thomas P. DiNapoli.

Auditors found that Kenneth A. Mangione oversaw all of the district's financial and business responsibilities, serving not only as business manager, but treasurer, purchasing agent and certifier of payroll, as well. By granting all of those responsibilities to one person, there was no system of checks and balances in place, auditors said.

Hopevale school officials last year requested an audit after they discovered some financial improprieties in both district records and at Hopevale Inc., a private residential housing facility for troubled children in the district, for which Mangione also served as business manager.

Mangione, who had worked at Hopevale for 35 years, admitted in court that he had embezzled tens of thousands of dollars from the school district to finance his gambling addiction.

In March, he was sentenced to a six-month jail term and ordered to repay $50,000 to the district.

Auditors said Mangione employed a variety of method to steal funds, including paying himself an extra $86,081 by issuing additional payroll checks and improperly increasing his salary. He also used $14,484 in district funds to pay his personal income taxes and issued a $1,500 unauthorized vendor check to himself.

The state audit also found that Mangione was able to alter his W-2 forms so that they showed he was paid $31,999 less than he actually earned. The audit recommends the district limit override rights on its computer information systems and that the School Board seek training regarding financial oversight, among other recommendations.

State auditors also determined that Fox & Co., the district's accounting firm for 20 years, did not conduct the district's 2004-2005 audit, as required by the state Education Department, and failed to perform up to professional standards.

Mangione's Dec. 1 pre-indictment guilty plea to two grand larceny charges came after he was fired as chief financial officer of both the Hopevale school and the residence for troubled children.

According to John C. Doscher, chief of the Erie County district attorney's White-Collar Crime Bureau, Mangione began stealing in late 1993 and continued to embezzle funds through June 2006. Most of the money apparently was lost at the casinos in Niagara Falls and Niagara Falls, Ont.


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