An investigation by the Office of the State Auditor has determined the Pleasantville School District has engaged in gross overspending, lacks sufficient program and financial oversight, and has underutilized positions.

The audit released Monday lists a number of occasions in which employees were paid for work that was not needed and money was misspent or spent without proper approval. Other problems cited included the district at one point having 42 teachers who had no assigned students and more than $500,000 paid to students in a mentoring program.

It notes that at least some infractions regarding widespread timesheet irregularities for a district program have been referred to the Division of Criminal Justice for further investigation.

District officials, who cited a state-imposed monitor as a big part of the problem, said they will work to implement changes. State Auditor Stephen Eells said investigators will be back in a year to review the district’s progress.

Eells said it is hard to weigh in on who is to blame for the problems in the district because they have had so many superintendents and constant change. There have been 11 superintendents and seven Human Resource directors in the past 10 years and at least five changes in the past seven years for the high school’s principal and district’s director of curriculum, the audit said.

“Someone has to look at the entire management of the district, including the Board of Education,” he said. “There is something wrong when a district has had so many leaders. It was clear that leadership has never really taken hold there. It was a revolving door. There is a reason you are not keeping your people.”

Eells said because of the large amount of state aid the school district receives — close to 80 percent of its budget — Pleasantville is always on the state auditor’s radar. He declined to comment on specifics of the criminal investigation.

Superintendent Garnell Bailey said she is grateful the state sent the auditors, who helped identify problems in the district.

“It was very eye-opening,” she said Monday about the audit. “We got the opportunity to correct things. I look forward to having them come back.”

She agreed that the lack of continuity in the district has created challenges she inherited, but said she will keep working to improve the district and welcomes all the help the state wants to offer.

“I’m just going to keep doing my job,” she said.

Board President Darleen Bey-Blocker and Vice President Joanne Famularo said a big problem is the state monitor. The district has had a state monitor since March 2007 who oversees spending and has the authority to override school board decisions.

Bailey was appointed in 2010, when Superintendent Gloria Grantham was placed on leave. Baily was also suspended by the board in February — citing an unspecified state investigation — only to be reinstated a day later by the state monitor, James Riehman.

Famularo said the board has a plan in place but is unable to execute it because of the state monitor position.

“There’s definitely a lack of leadership in this district,” she said. “Our decision-making is sound. We want what’s best for the district.”

State Department of Education officials said they could not comment becasue they had not reviewed the audit.

Bey-Blocker said some board members have contributed to the problems by putting personal issues before district needs.

But changes could be made to the way the board members are selected.

Mayor Jesse Tweedle is discussing the possibility of creating a mayor-appointed board in the city so board members would not be elected. Tweedle submitted a petition earlier this month to have the issue be voted on in November’s election.

“It was an eye-opener,” Tweedle said of the audit. “I knew something was wrong. This report pretty much spells it out.”

The mayor said he didn’t want to comment on specifics of the report until he has a chance to look into what’s going on.

He stressed that the district has good teachers and students with a lot of potential, and he wants to work together with the district, board and parents to make things better.

“My question is: What the hell’s going on?’” Tweedle said. “Somebody’s got to be accountable. I need answers.”

The district spends $18,499 per student — the third highest average of 106 districts of similar enrollments the state office examined. The district has about 700 employees and 3,500 students, but there are several instances in which money was misspent during the past few years, the auditor’s office said.

According to the audit, the district spent $2.9 million in salaries for 42 teachers in the 2011-12 academic year who had no assigned students. The district enrolled more students the next year when the charter school in the city closed, but 19 of the 42 remained without students, 13 returned to the classroom, six received a partial schedule and four left the district. The district’s teacher-to-student ratio was 9.7 to 1 in 2011-12.

Bailey said some of the teachers listed as not having any students were lead teachers or worked in specialized areas with other teachers. But, she said a lot of those assignments have already been eliminated.

“We have already made a lot of changes,” she said.

Another $1.15 million was spent from October 2010 to August 2012 — including $522,343 paid to students — for the Beat the Streets mentor program that had older students mentor young ones. Only $205,000 was budgeted for the program and there more than two and a half times as many mentors, 93, as student attendees, 35, on a daily average for the program, the audit said.

Another area outlined in the audit was cost of legal expenses. Spending reached $900,000 in legal fees and $750,000 in legal judgments against the district during the period reviewed, the audit said. In addition, the district hired its board attorney on cases already covered by the insurance provider — causing them to lose the provider, who sued and said the board attorney hindered their ability to litigate.

The district’s new insurance provider increased the per-case deductible from $15,000 to $150,000. The district is facing five cases under the new provider, including one in which the plaintiff seeks more than $1 million in damages and insurance does not cover the case.

Staff Writers Lynda Cohen and Anjalee Khemlani contributed to this story.

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More than 30 years’ experience reporting and editing for newspapers and magazines in Illinois, Colorado, Texas and New Jersey and 1985 winner of the Texas Daily Newspaper Association’s John Murphy Award for copy editing.