Auditor General DePasquale Says Central Bucks School District Spent Nearly $400,000 on Superintendent Contract Buyout
Auditor General DePasquale Says Central Bucks School District Spent Nearly $400,000 on Superintendent Contract Buyout
Employment contract signed before anti-excessive buyout law went into effect
HARRISBURG (July 16, 2015) – Auditor General Eugene DePasquale said a recent audit shows that the Central Bucks School District spent nearly $400,000 on an early termination settlement with a former superintendent after only 10 months on the job.
The overly generous buyout agreement, finalized July 24, 2012, superseded the terms of the original employment contract with the former superintendent. The agreement was signed just a few months before changes to the Public School Code went into effect preventing such excessive buyouts.
“Less than two months after the contract was signed, a new state law would have prohibited the exact excessive buyout that Bucks County offered,” DePasquale said. “That is money that could have been better used to educate students.”
“The timing of the initial contract signing was unfortunate, but want to be clear that this audit is about finances, not about the Central Buck’s School District’s success in educating students.”
Had the district signed the employment contract after the changes to the Public School Code went into effect, the district would only have been obligated to pay the former superintendent one year’s compensation. The changes to the school code were signed into law by the governor nearly two weeks before the contract was finalized with the former superintendent but the provisions were not yet in effect.
“The district also paid $23,900 to a headhunter to find the former superintendent, which, considering the former superintendent’s brief tenure, calls into question the value of the search firm price tag,” DePasquale said. “It is a board function to search for and to hire administrators, and moving forward, I encourage this district – and other districts — to perform the work themselves rather than hiring high-cost headhunters.”
The board told auditors that the termination agreement was negotiated because the former superintendent and the board were “drifting apart.” However, the board did not offer to discuss a corrective action plan with the former superintendent as an alternative to termination.
On July 3, 2013, after the former superintendent had served only 10 months of the four-year contract, the board approved a separation agreement with the former superintendent, which terminated his employment with the district effective July 31, 2013.
As a result of prematurely ending the contract, the separation agreement required the district to make payments to the former superintendent totaling $390,728, including:
• $365,000 for salary and benefits of, based on a calculation of $1,000 per day for 365 days;
• $13,861 for actual costs for major medical, hospitalization, surgical, prescription drug, and dental coverage for one year, or until July 31, 2014;
• $567 for life insurance coverage for one year ending July 31, 2014;
• $10,000 for a 403(b) retirement contribution; and
• A cellphone, an iPad, and a printer, all valued at $1,300.
Auditors recommend that Central Bucks School District:
• Ensure that future employment contracts with prospective administrators contain adequate termination provisions sufficient to protect the interests of the district and its taxpayers in the event that the employment ends prematurely for any reason;
• Re-evaluate the effectiveness of hiring an outside firm during the superintendent search process before spending money on such services in the future;
• Provide as much information as possible to the taxpayers of the district explaining the reasons for entering into separation agreements and justifying the district’s expenditure of public funds for this purpose; and
• Require the board to include in its superintendent employment contracts provisions that address the need to comply with the recent changes to the Public School Code when entering into separation agreements.
District officials maintain that the termination agreement was proper and necessary to protect the interest of the school district.
The Central Bucks School District audit report is available online here.
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