Ernest Patrick Smith, managing partner of the accounting firm Nawrocki Smith, presents the findings of a forensic audit into Riverhead Central School District. Photo: Alek Lewis

A forensic audit of the last five years of the Riverhead Central School District’s business affairs found no evidence of fraud, embezzlement or malfeasance, but found the environment in the district’s business office was one of “conflict,” “seeming discontent,” and “disenchantment,” largely due to the overwhelming number of responsibilities assumed by former Deputy Superintendent Sam Schneider.

The results of the forensic audit were presented to the Board of Education last night by Ernest Patrick Smith, managing partner of accounting firm Nawrocki Smith of Melville, which the board hired on Nov. 1 to conduct the audit amidst the demotion and administrative reassignment of Schneider pending an investigation into unspecified allegations from an employee.

The forensic audit, which still remains open, was compiled using documents from the 2016-17 to 2020-21 school years, alongside interviews with various administrators and district employees. 

The results of the audit were presented last night to the Board of Education. Photo: Alek Lewis

During his tenure as deputy superintendent, Schneider took on duties and responsibilities that extended beyond the role of the district’s business and financial management operations, including overseeing the human resources, security, and building and grounds departments, according to the results of the audit.

“The level of responsibility for this and for managing all of these duties and responsibilities as a deputy is very large. And in my view, based upon the work that we have done — my firm has done  — this is largely what the issue was,” Smith said.

“This caused a lot of discontent within the office, lots of conflict, some tension, disgruntlement amongst the folks that work there, and in turn led to performance issues and problems within the office,” Smith added.

Schneider was hired by the district in 2011 as the assistant superintendent for finance and operations and was promoted in July 2016 by former Superintendent Nancy Carney to the deputy superintendent, which came with additional responsibilities and made him the district’s second most senior administration official.

Schneider parted with the district in March, pursuant to a settlement agreement reached in January that stated Schneider would be paid his full compensation through the end of current school year. The settlement agreement also agreed to end the investigation against Schneider.

Schneider was hired by the East Hampton Free Union School District in March as its assistant superintendent for business.

Smith pointed out there are not many other Long Island school districts with a deputy superintendent, and for those that do, the title is not typically given to a business official. Smith recommended the business official “stick to business official duties,” and that besides those difficulties, the financial side of the district “runs very well” and has many experienced employees.

Smith recommended the district adhere to the structure outlined by the state Department of Education: the superintendent be the chief executive officer, the board of education president be the chief fiscal officer and the assistant superintendent for business be the chief financial officer.

“My opinion is that this was out of balance,” Smith said. “We had one person who had too many responsibilities. And I don’t think it was perhaps any fault of his own, it just happened over time, over various administrations, so as to have so many responsibilities that have caused some other issues within the district. So from an internal control perspective, you really need to have the proper structure.”

Schneider declined to comment on the results of the audit presented to the board.

The forensic audit investigation remains open. Smith said one issue that remains open is the inventory of the district’s personal protection equipment purchased by Schneider in response to the COVID-19 pandemic. 

“I do believe we will resolve it,” Smith said. “You have to understand what was going on during that time frame. We all know it was not that long ago when COVID hit in March of 2020. Basically everyone was placed at home, schools closed, businesses closed, people not operating. Then there was a scramble for PPE. Everyone is looking to buy PPE wherever they can.

“We’re comfortable with the documentation they looked at from a purchasing perspective,” Smith added. “We are just trying to pin down the inventory of those items that were purchased.”

Other elements of the forensic audit that need to be completed pertain to budget transfers, budget code restructure, fund balance reports, vendor database analysis and purchasing contract review, and transportation department inquiries. The firm is also in the process of reviewing and analyzing additional documents recovered after the cyber attack on the district.

The board of education hired a new assistant superintendent for finance and operations, Rodney Asse, to lead the town’s business office starting the beginning of next month. Asse was formerly employed as a business official at Superintendent Augustine Tornatore’s former district, Liberty Central School District, assistant superintendent for finance at the Newburgh Enlarged City School District, and budget director at the Rochester City School District.

[See prior coverage: School board hires new assistant superintendent for finance and operations]

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Alek Lewis is a lifelong Riverhead resident and a 2021 graduate of Stony Brook University’s School of Communication and Journalism. Previously, he served as news editor of Stony Brook’s student newspaper, The Statesman, and was a member of the campus’s chapter of the Society of Professional Journalists. Email: [email protected]