In Depth: Audit Exposes Financial Troubles At Broward Teacher’s Union
A closer look at a 2-year audit of the Broward Teacher’s Union finances reveals an organization with little financial oversight, a glaring lack of transparency and eye-popping amounts paid to leadership and a construction company hired to do building maintenance.
At the center of the report — a union president who, according to the audit, bypassed rules and enjoyed lucrative perks.
Allegations in the report have led to two investigations into whether union President Pat Santeramo made illegal campaign contributions with union money.
Several teachers we spoke with, who have not received a raise in several years and who faithfully paid $600 annually to the union for dues, are outraged by the profligate spending and shoddy record keeping at a time of severe cutbacks across the Broward School District.
I got my first look at the audit Wednesday night and only had time to report on a few of the items detailed in the report. With time, I have put together a more complete story on the report and its’ findings.
The audit, which a source tells me is being reviewed by the Broward State Attorney’s Office, was conducted by the American Federation of Teachers (AFT), the parent organization of the Broward Teacher’s Union (BTU), after questions were raised about the union’s finances. It outlines profligate spending by Santeramo and his top associates within the union.
In the report we learn that Santeramo’s union “credit card expenses over the two-year period examined (from 2009-2011) totaled $128,634. The majority of the charges are lacking backup documentation.”
The report adds that”…(Santeramo) is in the process of reviewing in order to provide an explanation and documentation.”
Others at the union also had credit cards, like former bookkeeper Arlene Marotta. The report says between 2009-2011 she rang up more than $355,000 in credit card expenses. Investigators found that more than $96,000 of that total had no documentation or proof the expense was related to union business. The report says her credit card was destroyed.
Also detailed are expense accounts for union leaders. Santeramo receives $600 per month for a car allowance, up to $250 per month for gas and until July 2011 received $300 a month for expenses. Three others at the Union received similar monthly expense and auto allowances.
The audit found there were no receipts for the use of Santeramo’s gas card.
All of this spending was occurring despite the union overestimating its’ dues by $1.2 million dollars in 2010, according to the report. The report also says the union needed to take $3.8 million out of its’ reserves to cover expenses.
For 2011-2012, the union faces a deficit of $350,000.
The deficits forced the union to lay off 4 people and leave two positions unfilled.
A few teachers and union members we spoke with were disgusted by the details in the report.
“I think it’s ridiculous they had this access to all this money,” said teacher and union member Donna Shubert, adding that it made the union appear hypocritical when criticizing the School Board. “We’ve been saying the school board is corrupt and wasteful and mismanaged and then we have our own problems so it doesn’t look good. “
The report also details Santeramo’s generous vacation and sick time. The report says he is owed more than $255,000 for 230 unused vacation days and 122 sick days.
The benefit extended to other union employees, too. Other union employees are given up to 20 days sick time per year to “cash in.” The report reads that “(T)his is a generous benefit in light of the (union’s) current financial difficulties.” The audit says it amounts to an “annual four-week bonus.”
Several other portions of the report stand out:
* More than $188,000 was paid to Marsden Construction for building maintenance. The report finds that “AFT’s research suggests that the amounts are approximately double the reasonable and customary charge for this type of work.” CBS 4 News tried to locate Masden Construction Thursday. The only company registered in Florida with that name is in Seminole County. No one answered a number registered to the business.
* The audit notes a dozen union checks were made out to cash for at least $13,000. The checks were for “holiday gifts” or “organizing.” The AFT points out that “no checks should be made payable to cash. “
* Nearly $170,000 spent for campaign contributions lacks documentation of what the money was spent on.
Ultimately, the report found that “lack of bookkeeping expertise, proper internal controls and required backup documentation led to significant errors” in union finances. However, the report points out that several changes have been made including requiring receipts for all purchases, purchase orders for expenditures and contracts to be reviewed by a comptroller.
Santeramo, head of the BTU for 10 years, is being investigated by the Broward State Attorney’s Office and the Florida Elections Commission for allegedly making illegal campaign contributions with union money. The report indicates that 26 individuals “were issued checks that are believed to have been reimbursements for contributions to political candidates.”
The audit says the AFT brought the matter to the BTU executive board and began working to recover the “wrongful reimbursements.” There has been “substantial progress” in recouping the money, the report says.
Santeramo’s attorney has said the accusations against his client are false.
Teacher Kenny Minchew said that if anyone broke laws they should be held accountable, however he understands how the alleged illegal contributions could have occurred.
“Any mistakes were made to fight the legislature and try to protect teacher’s rights,” Minchew told me. “I think the members that got us into this were so focused on the fight that they forget to look back a little bit.”
The AFT has taken over day-to-day operations of the BTU and is sending a financial manager to assist the BTU with its’ finances.