Baker Tilly Virchow Krause, LLP

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New York, NY 10119
tel 212 697 6900
fax 212 490 1412
bakertilly.com

February 1, 2016
City Council
City Hall
140 Main Street
Torrington, CT 06790
Re: Forensic Audit Services

City Council:

In connection with the above referenced matter, you retained Baker Tilly Virchow Krause,
LLP (Baker Tilly or BT) on October 22, 2015 to perform a forensic audit of the Torrington
Board of Education (BOE) budget line items related to Information Technology (IT) services
rendered by or coordinated through consultation with Protected Harbor, Inc. and/or NetMagic
Systems (PH), or any of its affiliates, covering the time period of April 1, 2013 through June 30,
2015.
Section 1 About This Report

A. ASSIGNMENT
BT was engaged to perform a forensic audit of the BOE, encompassing an examination of the
following:

1. Any and all Bids, Requests for Proposals and Quotes relative to IT Services and bid
proposals submitted in response thereto
2. Any and all agreements, plans and/or contracts and Memorandums of Agreement
between PH or any of its affiliates and the Torrington Board of Education
3. All invoices, purchase orders and payments made to PH or any of its affiliates

4. Any and all financing or payments made to third party vendors procured by or
coordinated through PH or any of its affiliates from General Funds and/or grant funds

Our investigation and research was intended to answer questions related to the following
concerns:

Whether the expenses incurred and paid by Torrington Board of Education were in
compliance with Government Accounting Standards (GASB).

Whether the Torrington Board of Education was in compliance with all policies,
procedures, city charter provisions and statutory requirements, including but not limited
to Board approvals, Financial Reporting, Conflict of Interest and Procurement and
bidding procedures.

Whether PH or any of its affiliates complied with all terms and deliverables itemized in
any and all plans, contracts and/or Bid Proposal.

Whether all invoices properly document the services rendered including a breakdown for
hourly services rendered outside the fixed price as provided in the contract.

Whether the Board of Education has implemented best practices in external and internal
controls over accounts payable.

Whether any and all IT equipment removed from Board of Education premises was
inventoried prior to its removal and any trade-in or sale proceeds properly documented
and credited to the Board of Education.

Whether on-site technicians are properly reported as consultants vs. employees and
whether background checks are being conducted in accordance with state statutes and
contractual terms.

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Whether all 1099s properly reflect consulting services and payment for supplies,
materials and equipment.

Whether expenditures and/or reimbursements paid to PH or any of its affiliates for

supplies, materials and equipment invoiced outside of the flat-rate contracted price were
procured through the competitive bid process as dictated by city charter and state statute.

Whether expenditures for supplies, materials and equipment paid to any and all vendors
for IT services arranged through the efforts and oversight of PH or any of its affiliates
was procured through the competitive bid process as dictated by city charter and state
statute.

Whether Protected Harbor received any compensation or commission from any vendor
providing services, supplies, materials and equipment procured through the efforts of PH
or any of its affiliates.

Whether PH or any of its principals, employees or representatives executed any

documents, contracts or agreements representing the company or its principals,
employees or representatives as authorized personnel of the Board of Education and
committing the Board of Education to contractual obligations.

B. DOCUMENTS AND INFORMATION

In preparing this report, we reviewed materials provided to us by the Mayors Office, by Mr.
Hugh Potter, Director of Business Services Torrington Public Schools and Mr. Richard Luna,
President of PH and IT Director Torrington Public Schools, in order to understand the facts and
background relating to this mater. We also conducted interviews with former and current
employees of the BOE and Mr. Luna. A list of individuals interviewed and items reviewed is
presented in APPENDIX A.

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C. INDEPENDENT REVIEW
We have no present or prospective interest in the parties or properties that are the subject of this
report, and we have no personal interest or bias to the parties involved.

Our compensation is not contingent on any action or event resulting from the analysis or
conclusions in, or the use of, this report.

D. STATEMENT OF QUALIFICATIONS
We have attached the Curricula Vitae of our staff in APPENDIX B.

E. ASSUMPTIONS AND LIMITING CONDITIONS

To the best of our knowledge and belief, the statements of fact contained in this report are true
and correct. The reported analyses and conclusions are limited only by reported assumptions and
limiting conditions, as is our personal, unbiased professional analyses and conclusions.

Our report is intended solely for this matter and should not be used for any other purpose.

Section 2 Case Background

On October 22, 2015, BT attended an introductory meeting with Mayor Elinor Carbone,
Raymond Rigat (Corporation Counsel), Timothy Waldron (Mayoral Aid), Lynda Reitman
(Interim Superintendent Torrington Public Schools) and Hugh Potter (Director of Business
Services Torrington Public Schools) to discuss the history behind the decision to outsource
the operation of the Torrington Public School IT Department to a vendor and the concerns
leading to the forensic audit. Prior to the spring of 2013, the City of Torrington (COT) Public
School District had an in-house IT department consisting of a director and technicians. During
that spring, the State of Connecticut began to introduce Smarter Balanced Assessment
Consortium (SBAC) standardized testing in K-12 schools, which is a computerized system.
During the introduction of the system, the schools experienced major computer failures.
Concerns arose as to whether the current state of the IT systems could be relied upon to handle

February 1, 2016

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this new type of computerized testing process. The BOE considered the scenario of outsourcing
their IT Department so that it would be managed and operated by an outside consultant.
The BOE hired PH to serve as the outsourced IT Department, at a cost of $343,170 over
the period of May 2, 2013 June 30, 2014. The cost was to be calculated from a flat monthly
rate of $6.15 per month, per child, using a census at that time of 4,650 children. The contract
included all day tech support, management and supervision of technicians, preventive
maintenance, WiFi management and changes and review of IT expense items. The contract
services included specific projects, such as to improve network servers, expand the retention
period of data backups, monitoring software, network documentation, remote control software
and the purchase of a backup server. These itemized project costs were estimated at a total of
$179,000, some of which would be paid to PH for services and some of which would be paid to
outside vendors for equipment. These services were defined in the Torrington Outsourcing
Contract (EXHIBIT 1) which was designated an emergency purchase.
On October 8, 2013, RFP# 101031-IT (EXHIBIT 2) was prepared for outsourced IT
services to cover a period of July 1, 2014 June 30, 2016. PH responded to the RFP with a
proposal and was awarded the work. An actual contract was prepared, marked DRAFT
6/11/14 and later signed on June 29, 2015 (the year following the draft date). An invoice
provided a calculation for determining the monthly cost based on a student count as of October
1, 2013 and a fixed per student rate of $6.80 for the first year of service. The contract further
stated the student count is 4,250 as of October 1, 2013, and the annual fee for the first year of
the Term shall be $462,400 to be paid in four equal quarterly installments of $115,600. It was
explained during the introductory meeting that using the stated per student rate and fixed
student count, the actual annual fee should be $346,800, and thus the quarterly installments
should have been $86,700.
In our interview with Lisa Schimels, former technology secretary for the BOE, we
learned that she realized when processing a quarterly invoice that the amount budgeted for PH
was less than the annual amount that four quarterly invoices would total. She brought this to the
attention of Hugh Potter. After looking into this amount, the BOE realized that the amount listed
on the invoices was linked to the contract. As explained in the introductory meeting, by paying
the quarterly invoices, the BOE believes that PH received an overpayment of $115,600.

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In our interview with Cheryl Kloczko, former Superintendent for Torrington Public
Schools, we learned that during the time period when the contract was developed, there was a
change in several staff and administrative positions, and as a result, the discrepancy was not
immediately realized. Once both parties became aware of the miscalculation, the general counsel
for the BOE assisted in preparing memoranda of understanding (MOU), in an effort for the BOE
to recover the overpayment. From our interview with Lynda Reitman, we learned that three
attempts were made to rectify the overpayment issue through MOUs. All attempts were
unsuccessful, as PH was unwilling to agree to an MOU which referred to the additional $115,600
as an overpayment.
During his interview, Mr. Luna explained that the additional $115,600 was associated
with billing for management of a WiFi project for the months of July 2014 through January
2015. During 2014, Danielle Batchelder (former director of business services for Torrington
Public Schools) asked Mr. Luna to consolidate his billing for services outside of the outsourcing
contract by integrating the cost within the contract price. Mr. Luna further explained that his
average monthly billing related to management of the WiFi project for the months of July 2014
through January 2015 was $16,000 per month.
When PH was hired to serve as the outsourced IT department, Mr. Luna was also given
the title of IT Director. This has led the BOE and the COT to be in a situation where there is a
perceived conflict between Mr. Lunas title and responsibility as IT Director, which enables him
access to, and influence over, budgetary data for the IT Department, and PHs role as a vendor
which is paid from that same budget. Concerns over both the conflict of interest and the alleged
overpayment led the COT to seek a forensic audit of the BOE budget line items related to IT
services rendered by or coordinated through consultation with PH, or any of its affiliates,
covering the time period of April 1, 2013 through June 30, 2015.

Section 3 Findings and Conclusion

A. FINDINGS
Based on our examination of the information provided, we have either identified answers to the
questions outlined in Section A above and/or provided recommendations for further analysis,
which are explained in each corresponding sub-section of our report and in the conclusion.

February 1, 2016

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1. Whether the expenses incurred and paid by Torrington Board of Education were in
compliance with Government Accounting Standards (GASB).

We determined that the Board of Education has not historically implemented best practices in
external and internal controls over accounts payable, including the process by which expenses
were incurred and paid. We found that making this assessment was best determined by using the
internal control framework compiled by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) and the Government Finance Officers Associations (GFAO)
Code of Professional Ethics. According to COSO, internal controls are broadly defined as a
process, effected by an entity's board of directors, management and other personnel, designed to
provide reasonable assurance regarding the achievement of objectives in the following
categories:
1. Effectiveness and efficiency of operations
2. Reliability of financial reporting
3. Compliance with applicable laws and regulations

We illustrate in Sub-Section 5 the examples in which a lack of external and internal

controls over accounts payable impact the manner by which IT expenses are incurred or paid.

2. Whether the Torrington Board of Education was in compliance with all policies,
procedures, city charter provisions and statutory requirements, including but not
limited to Board approvals, Financial Reporting, Conflict of Interest and Procurement
and bidding procedures.

We performed a background check on all IT vendors used between April 1, 2013 and June
30, 2015 (including PH) as well as board members and former and current BOE employees who
interacted with PH or were involved in procurement. We performed a comparative analysis
between the following attributes for each individual and business subject: phone numbers,
residential or business addresses, e-mail addresses, Federal Employer Identification Numbers
(FEIN), relatives, and employees. We did not find any indication that any of the vendors are

February 1, 2016

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owned by PH, Mr. Luna, the board members or the former and current BOE employees who
interacted with PH or were involved in procurement.

During our interview with Mr. Luna, he described the vendor Gain Communications, Inc.
(Gain) as networking partners. He stated that he has worked with them in the past. We noted in
our examination that from April 1, 2013 through June 30, 2015, the BOE made three different
types of technology purchases from Gain: phone systems, Smart Boards and WiFi cabling. Mr.
Luna stated during his interview that the new phone system went through a competitive bid
process, and that although he did review the bids, the BOE board was responsible for vendor
selection. He further described that he reached out to four vendors in total. In our examination of
the document production, we did not find any evidence of competitive bids between the BOE
and Gain. The document production for Gain only contained (1) Proposal Sales Agreement
documents addressed from Gain to the BOE, (2) invoices addressed from Gain to BOE and (3)
purchase orders addressed from the BOE to Gain. We did note an e-mail (EXHIBIT 3) dated
January 14, 2014, from former BOE director of business services, Danielle Batchelder to BOE
accountant Carrie Gorman, which states the following:

Hi Carrie,
Administration has changed their plan on how to get TMS [Torrington Middle School] up and
running for the testing. The prior proposal/deposits from GAIN are no longer valid. Gain and
Richard Luna are putting together a new proposal for the Superintendent to sign off on. In the
meantime, GAIN needs to begin ordering parts because we are under a tight timeframe for the
testing period. Please cut a check for the $40,000 to prepay GAIN. Once we receive their new
proposal, we can deduct the $40,000 from the total amount.

The BOE has a purchasing policy which states that all purchase orders from all school
organizations are to be put out to bid if the order is expected to equal or exceed Ten Thousand
Dollars ($10,000.00). 1 The above illustrates an example of non-compliance with this policy, as
the request that Gain be provided a $40,000 advance for a different type of work than was

Torrington School District - Policy 3010: Purchasing Policy

February 1, 2016

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initially agreed upon is occurring without a competitive bid. Gain is being selected for work in
excess of $10,000, and this threshold should have required a competitive bid per the policy.

3. Whether PH or any of its affiliates complied with all terms and deliverables itemized in
any and all plans, contracts and/or Bid Proposal.

Baker Tilly conducted interviews with seven individuals, who are either current or former
employees of the BOE. From these interviews, we heard consistently that the overall IT
environment has improved since Richard Luna became IT Director. Invoices dating from April
1, 2013 through June 30, 2015 were reviewed by Baker Tilly. Based on the interviews and
invoice review, we have no reason to believe PH or any of its affiliates did not comply with all
terms and deliverables itemized in any and all plans, contracts and/or bids. However, there are no
proposals from sub-vendors or from PH to compare to for add-on services valued at $10,000 or
greater. Without an actual bid, we would not be able to evaluate the compliance of the subvendor(s).
We examined PHs Torrington Outsourcing Contract, which serves as the basis for the
scope of work for the time period of May 2, 2013 through June 30, 2014. According to the plan,
any labor provided by PHs technicians for services falling outside the scope of the plan is to be
billed at $75.00 per hour. As explained in other sections of this report, we noted that in cases
where these additional services were provided that the invoices lacked full detail. We further
noted that the plan does not address the cost for services provided by Mr. Luna directly. We
identified two invoices (EXHIBIT 4), one for April 2014 and one for May 2014, which illustrate
that Mr. Luna billed at a rate of $193.80 per hour for management of the WiFi project, which
entailed meetings, conference calls, and WiFi project work hours. Clearly, this was in excess
of the only rate stated in the Torrington Outsourcing Contract. These invoices total $24,613.
We further noted that the Torrington Outsourcing Contract includes WiFi management within
the scope of work associated with the fixed price for this contract. These two invoices for
management of a WiFi project which total $24,613 would appear to be costs that should have
been included within the contract and not billed separately. Further, as IT Director, Mr. Luna
would have been responsible for managing or overseeing any projects related to IT
infrastructure. Therefore, by billing these two items, PH was not in compliance with the contract.

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We also noted during our examination of PHs Torrington Outsourcing Contract that an
item was included in the work scope for network documentation, at an estimated cost of
$25,000. This process was explained to involve installing test equipment which would then
examine the system over several weeks to conduct speed tests and create wiring diagrams. In
our examination of the invoices, we noted that invoices #12034, #12064, #12115, #12057 and
#12171 were billed during the months of April, May and June of 2013 for network
documentation and for a computer inventory, at a total cost of $44,500. We note that this cost
is in excess of the $25,000 cost listed in the outsourcing contract. In our examination of the
documents, we did not identify any type of network documentation or up-to-date computer
inventory. Further, as IT Director, one would expect that Mr. Luna should be responsible for
maintaining an inventory of the computer hardware as well as documentation on the network (in
order to properly manage the IT environment), and as such, the BOE should not have paid
separately for these services. When we interviewed Mr. Luna, we specifically asked if he had an
inventory of software and hardware owned and/or used by the school district. He indicated that
he had not prepared one since the school district had not retained him to do so.

4. Whether all invoices properly document the services rendered including a breakdown
for hourly services rendered outside the fixed price as provided in the contract.

Baker Tilly reviewed a total of 236 invoices for services and equipment provided during the
time period of April 1, 2013 through June 30, 2015. The invoices reviewed are from multiple IT
vendors which include CDW-G, Gain Communications, HP, Protected Harbor, Inc./NetMagic
Systems, and Valley Communications Systems. Of the 236 invoices reviewed, we noted that 86
(EXHIBIT 5) contained descriptions which lacked an appropriate level of detail, as described in
the chart that follows.
DIAGRAM 1
Vendor
Gain Communications, Inc

February 1, 2016

Summary of Invoices

Findings

Based on our review of the

We noted that there were 48

invoices, we noted that Gain was

invoices containing items

involved in three IT projects:

totaling $20,526, in which

Smart Boards, phone systems and

the invoices include a billing

Page | 10

Vendor

Summary of Invoices
WiFi cabling.

Findings
rate of $160 for "labor-outof-state" or a similar
description. It is unclear if
this is an hourly rate. These
invoices lack detail as to
which project the labor
relates to.

Protected Harbor,

In addition to their outsourcing

We noted approximately 36

Inc./NetMagic Systems

contract, Protected Harbor,

invoices which lacked detail

Inc./NetMagic Systems had

in the following areas: (1) No

submitted invoices which included technicians listed or hours

charges for the following: (1)

worked, (2) no serial

Installation of various hardware,

numbers for equipment, (3)

(2) reimbursements for tools and

no receipts for

equipment, (3) various equipment,

reimbursement (including the

(4) spam filter, (5) consulting

spam filter), (4) and lack of

services, (6) Wi-Fi

specification on the parts or

implementation management, (7)

tools that were purchased.

various hardware (8) on-site and

summer labor, (9) additional tech
support.
Valley Communications

We noted 2 invoices which

The invoices lack any

Systems

include a cost for labor and

description which would

video service labor.

explain the labor.

During our review we also noted that for many of the invoices, the purchase order date was
after the purchase date and for expenses over $10,000 there were no bids or sales quotes obtained
prior to purchase. Finally, of the 86 invoices that lack sufficient detail, 19 invoices are for labor
provided by PH totaling $216,139.

February 1, 2016

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5. Whether the Board of Education has implemented best practices in external and
internal controls over accounts payable.

In order to determine whether the BOE has historically implemented best practices in internal
and external control over accounts payable, we reviewed several aspects of the operations of the
accounts payable, specifically related to IT purchases and the outsourcing contract with PH. We
identified numerous examples where it appeared that the BOE did not implement best practices
in this area:

As will be explained in Sub-Section 9 of our report, BOE policy does not specifically address
the actions to be taken in the event of an emergency expenditure or whether such expenditure
can bypass the requirement for competitive bids for purchases exceeding $10,000. The COT
policy does have specific guidelines for handling emergency expenditures, which vary based
on dollar amount threshold. However, there is no clear indication that the COT policies are
applicable to the BOE. We note in our report that PHs original contract for outsourced IT
services and several subsequent purchases exceeded $10,000, but did not involve a
competitive bid. The purpose of a competitive bid is to identify the best seller of goods or
services, using several criteria, including, but not limited to cost, qualifications
responsiveness and timeliness. It is reasonable that any institution would experience an
emergency situation whereby a problem must be rectified in a timely manner. However,
controls must be in place to identify and respond to emergencies, and these controls must
include components to prevent funds from being used without properly assessing the
situation and weighing the options.

We learned that when PH was brought on as a vendor to provide outsourced IT services that
Mr. Luna was designated IT Director. As IT Director, Mr. Luna has the ability to assess the
BOEs IT needs, make recommendations towards the IT budget and to recommend vendors.
As a vendor, he also has the ability (contractually) to engage his technicians to perform
services outside of his contract for a fixed hourly rate of $75.00 per hour. There is no
separation between PH as a vendor (under the ownership of Mr. Luna) to the BOE and PH as
the BOEs IT Department (under the direction of Mr. Luna). A vendor would, like all

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businesses, have the goal of profitability, whereas an IT Department would have the goal of
providing a functional and supportive technological environment. These goals which are
inherently divergent are also conflicting.

We reviewed the invoices submitted by PH to BT for their services provided to the BOE. We
also reviewed PHs invoices provided by BOE. We noted that the BOE did not provide 9
invoices which were provided by PH. We further noted 113 cases where invoices were
submitted to the BOE by PH, Gain, Valley Communications and CDW-G, and the invoice
date precedes the date on the purchase orders which was issued to these vendors. A purchase
order is intended to allow a buyer to clearly and explicitly communicate their intentions to a
seller, and it serves as evidence that the seller intended to buy and pay for the goods. The
issuance of a purchase order after the seller has already billed for the services circumvents
the controls that the purchase order is intended to provide.

6. Whether any and all IT equipment removed from Board of Education premises was
inventoried prior to its removal and any trade-in or sale proceeds properly documented
and credited to the Board of Education.

In our discussion with Mr. Luna, he explained there are no trade-ins or sales of IT inventory.
Any inventory which is outdated or broken beyond repair is stored in a trailer behind Torrington
Middle School. The contents of the trailer are periodically emptied and recycled. Mr. Luna is not
familiar with the process involved in recycling the contents of the trailer. In our interviews with
the employees of the BOE, we noted that none of the employees were familiar with whether
there was a process for trade-in, sale or disposal of outdated or broken IT inventory.

7. Whether on-site technicians are properly reported as consultants vs. employees and
whether background checks are being conducted in accordance with state statutes and
contractual terms.

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We have requested further information from the BOE regarding the employees who serve as
technicians, in order to compare this list to the technicians employed by PH to verify that there is
no overlap.

8. Whether all 1099s properly reflect consulting services and payment for supplies,
materials and equipment.

In general, a Form 1099-Misc would be required if a vendor received at least $600 in rent,
services (including parts and materials) or other income, and the vendor was an individual,
partnership (i.e., Limited Liability Company (LLC)) or estate. BT requested, and received from
Hugh Potter, a production of Form 1099-Misc for the 2013 2014 Tax Years. We then
compared these documents to the vendors used during the 2013 2014 Tax Years. We noted that
the IT vendors generally are corporations, and as such, a 1099 would not be required to be filed
by the Torrington BOE. We noted that CDW-G is an LLC, and thus the BOE would be required
to issue CDW-G a Form 1099-Misc for their services (EXHIBIT 6). In reviewing the invoices
for CDW-G we noted that they had invoiced $284,963 in 2013 and $319,032 in 2014. We noted,
however, that CDW-G was only issued a Form 1099-Misc for the 2014 Tax Year in the amount
of $157,982. The BOE should have issued CDW-G a Form 1099-Misc for both 2013 and 2014
for the correct amounts, which would vary if they were issued on the cash or accrual basis.

9. Whether expenditures and/or reimbursements paid to PH or any of its affiliates for

supplies, materials and equipment invoiced outside of the flat-rate contracted price
were procured through the competitive bid process as dictated by city charter and state
statute.

Connecticut State law requires that with the exception of the gas, water and electric utility
services, any purchases of, or supplies for, contractual services, materials, supplies and
equipment be based on competitive bids. By law, these bids must be awarded to the lowest
responsible qualified bidder. Certain considerations which should be made in determining
whether a bidder is responsible and qualified include skill, ability, and integrity, past
performance on contracts, ability and financial responsibility. The law further requires that

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preference must be given to Connecticut based companies which manufacture or assemble the
required commodities or equipment, or that provide the required services. 2
According to the municipal code of the COT, All expenditures for supplies, materials,
equipment and contractual services the estimated cost of which is more than $10,000.00 shall be
made on the basis of a written contract which shall be based on sealed bids. 3 We reviewed the
municipal code of the COT and noted that there are provisions found at C13-6 (Expenditures
not to exceed estimates), C13-7 (Extraordinary expenditures under $100,000.00), C13-8
(Expenditures exceeding $100,000.00) and C13-8a (Extraordinary expenditures exceeding
C13-8 limit). We note that these code sections detail separate processes for emergency
expenditures based on cost thresholds. We further note that numerous sections of the municipal
code dealing with measures of enforcement over purchasing include verbiage that the respective
sections do not apply to the BOE. Therefore, it is unclear if the code sections pertaining to the
policies and procedures for emergency expenditures apply to the BOE, given that they describe
actions to be taken by the COT Board of Finance and the COT Board of Councilmen, should the
need for an emergency expenditure arise.
The BOEs purchasing policy states that all purchase orders from all school
organizations are to be put out to bid if the order is expected to equal or exceed Ten Thousand
Dollars ($10,000). The BOEs purchasing policy does not contain any specific verbiage
detailing the process for handling emergency purchases. The BOE does have a policy 4 which
allows for unexpected or uncontacted-for portions of any appropriation for school purposes to
any other item of such itemized estimate, however, this policy does not include a mechanism
for bypassing the competitive bid policy in order to do so. Another BOE policy dealing with
contract award 5 provides the superintendent the authority to award contracts on approved
budget items without prior approval of the Board of Education. However, this policy also does
not provide a mechanism for bypassing the competitive bid policy.
As such, it is unclear how the BOE would have the authority to bypass its own
competitive bid policy using an emergency exception, when (1) the BOEs purchase policy

Connecticut General Statutes 4a-59

Torrington, Connecticut Code of Ordinances, Title XVI Division of Purchasing, C16-4 Competitive bidding
4
Torrington School District - Policy 3040: Transfer of Funds Between Categories
5
Torrington School District - Policy 3000: Awarding of Contracts
3

February 1, 2016

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does not have an emergency expenditure exception to the competitive bid policy and (2) the
COTs emergency expenditure exception does not appear to apply to the BOE.
It appears that certain expenditures paid to PH, which were outside of the flat-rate
contracted price, were not procured through this competitive bid process. According to invoice
#12899 dated June 12, 2014 and provided to BT by PH (EXHIBIT 7), WiFi project management
was performed by Richard Luna. PH billed Torringtons BOE for 85 hours, at a rate of $193.80
per hour. The total cost for this service was $16,473. There was no contract to support this
expenditure, and no competitive bid for the services.
Additionally, invoices from CDW-G were reviewed and also appeared to be noncompliant with the competitive bid process. On two separate occasions, web filters were
purchased in excess of $10,000. Invoice #JV19414, dated February 12, 2014 (EXHIBIT 8),
documents a web filter purchased for $88,450, and invoice #JT38550, dated February 10, 2014
(EXHIBIT 9), shows a web filter purchased at $17,885. Neither of these purchases is supported
in a contract, and there is no competitive bid for the product.
Furthermore, 13 charging carts were purchased through Hewlett-Packard at a price of
$1,839 per cart as seen on Invoice #54835961, dated September 15, 2014 (EXHIBIT 10). The
total cost for these purchases was $23,907. Again, the purchases appear to be non-compliant with
the competitive bid process as there is no evidence of a competitive bid or contract to support
this purchase.
These examples are just a sample of the invoices representing purchases exceeding $10,000
for which the competitive bid process was circumvented.

10. Whether expenditures for supplies, materials and equipment paid to any and all
vendors for IT services arranged through the efforts and oversight of PH or any of its
affiliates was procured through the competitive bid process as dictated by city charter
and state statute.

As previously discussed, we noted instances where purchases were made for goods and/or
services from PH, CDW-G and Hewlett-Packard, which were procured without the involvement
of a competitive bid process. These cases are described in detail in Sub-Section 9.

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11. Whether Protected Harbor received any compensation or commission from any vendor
providing services, supplies, materials and equipment procured through the efforts of
PH or any of its affiliates.

Based on the information we received and reviewed, we did not find any evidence that PH
received compensation from any vendors.

12. Whether PH or any of its principals, employees or representatives executed any

documents, contracts or agreements representing the company or its principals,
employees or representatives as authorized personnel of the Board of Education and
committing the Board of Education to contractual obligations.

Based on the information we received and reviewed, we did not find any evidence that PH
obligated the BOE to any contracts or agreements.

Other Findings
We reviewed the Formation Technology Services Agreement (EXHIBIT 11), provided
by PH, in order to understand the contract price. Attached to the agreement was an RFP that was
issued on October 8, 2013 to seek proposals for a vendor to provide IT support services. The
RPF outlined several aspects of the IT operations and the expectations of a winning bidder. The
agreement between PH and the BOE covered the time period of July 1, 2014 through June 30,
2017.
Article III of the contract explained the structure of the contract price. The monthly cost,
which is to be paid quarterly, is to be calculated by multiplying the number of students by a per
student rate. The "per student rate" is contractually fixed at $6.80 for the first year, $6.97 for the
second year and $7.14 for the third year. According to this section of the contract, the "per
student rate" is multiplied by the Boards student count as of the month October in the respective
year of the invoice. This section then explains the student count is 4,250 as of October 1, 2013,
and the annual fee for the first year of the Term shall be $462,400 to be paid in four equal
quarterly installments of $115,600.

February 1, 2016

Page | 17

We recalculated this amount and determined that the product of a per student rate of
$6.80 and 4,250 students should result in a monthly cost of $28,900, which is a quarterly cost of
$86,700 and ultimately an annual cost of $346,800. The contract verbiage instead expresses this
quarterly cost as $115,600, which would result in an annual cost of $462,400. In total, the annual
cost of $462,400 expressed in the contract exceeds the calculated annual cost of $346,800 by
$115,600.
During our interview with Mr. Luna, we discussed the contract price calculation. Mr.
Luna explained that the additional $115,600 was associated with billing for management of a
WiFi project for the months of July 2014 January 2015. According to Mr. Luna, during 2014,
Danielle Batchelder (former director of business services for Torrington Public Schools) asked
Mr. Luna to consolidate his billing for services outside of the outsourcing contract by integrating
the cost within the contract price. Mr. Luna explained that his average monthly billing related to
management of the WiFi for the months of July 2014 January 2015 was $16,000 per month.
For a total of seven months, this would only equate to $112,000. As explained in a previous
section of our report, we noted two invoices, one for April 2014 at a cost of $8,140 for 42 hours
and one for May 2014 at a cost of $16,473 for 85 hours, which illustrate that Mr. Luna billed at a
rate of $193.80 per hour for management of the WiFi project, which entailed meetings,
conference calls, and WiFi project work hours. We did not note an invoice detailing work for
June 2014, which seems irregular considering that the itemized project billing stopped after May
2014 and resumed in July 2014 and continued for six additional months.
During our interview with Lynda Reitman, interim superintendent for the BOE, Ms.
Reitman explained that if the calculation was incorrectly performed by multiplying 4 (instead of
correctly multiplying 3) by the number of months, the result would be $115,600 instead of
$86,700. Further, she explained that a quarterly payment of $115,600 instead of $86,700 would
result in an overpayment of $115,600 after all four quarters were paid. We re-performed this
calculation, and find that by using 4 instead of 3 as the multiple to turn the monthly amount into
the quarterly amount, it does in fact result to exactly $462,400 (which is the annual amount
shown in the contract) and, thus, it appears to be the factor attributing to the additional $115,600.

February 1, 2016

Page | 18

B. CONCLUSION
BT received and examined procurement documents for IT services provided to the BOE,
focusing on those during the time period of April 1, 2013 through June 30, 2015. We also
conducted interviews with former and current employees of the BOE and Mr. Luna in order to
understand the facts and background relating to this matter. We further reviewed State and City
regulations, BOE purchasing and contract policies as well as relevant internal control best
practices. We identified the following:

During our review of 236 invoices for services and equipment provided between April 1,
2013 and June 30, 2015, we noted that for 113 of the invoices, the purchase order date was
after the invoice date and for expenses over $10,000 there were no bids or sales quotes
obtained prior to purchase.

We examined the agreement between PH and the BOE which covers the time period of July
1, 2014 through June 30, 2017, as well as the calculation for the annual fee. In our
examination, we found that if the calculation was incorrectly performed by multiplying 4
(instead of correctly multiplying 3) by the number of months, the result would be $115,600
instead of $86,700. The annual effect of this miscalculation would result in an overpayment
of $115,600 after all four quarters are paid.

We reviewed the COTs municipal code as they relate to emergency expenditures, and found
that there are procedures involved for the approval and execution of these types of
expenditures, which vary based on a dollar value threshold. While the dollar value
determines the exact measures to be taken, the measures themselves include at least two
levels of approval, which in some cases include a public vote. We compared these areas of
the COTs municipal code to the BOEs policies, and noted that (1) there is no clear
indication as to whether the COTs code on emergency expenditures applies to the BOE, and
(2) the BOEs policies do not have their own section pertaining to emergency expenditures.
As such, it is unclear how the BOE should have handled the emergency technology
expenditures and how they should handle future expenditures.

We identified an e-mail between the former director of business services and the accounts
payable accountant which illustrated a case where a competitive bid would not be used for a
purchase in excess in $10,000, despite the requirement. Further, this example illustrated that

February 1, 2016

Page | 19

both the vendor and Mr. Luna were working together to provide the BOE with a proposal
for the services to be provided.

We noted that there is an apparent lack of segregation of duties with respect to PHs role as a
vendor (under the ownership of Mr. Luna) to the BOE and PHs role as the BOEs IT
Department (under the direction of Mr. Luna). An IT Director would be driven for providing
the BOE with the most efficient technology environment, whereas a business owner would
be driven towards increasing sales of technology services. These goals are inherently
divergent and also in conflict.

Based on our review performed and findings to date, we recommend the following next steps:

As previously discussed, there is a lack of segregation of duties between Mr. Lunas role as
President of PH, a vendor to the BOE and Mr. Lunas role as the BOEs IT Director. We
recommend that to create a proper segregation of duties, the BOE hire an IT Director who
would work under the BOE superintendent, and be responsible for monitoring and directing
the work of any IT vendor, make recommendations for the IT budget and maintain the
efficiency and effectiveness of operations of the BOEs IT department.

We learned that the BOE policies are not clear and specific enough to prevent, detect and
correct conflicts of interest, mitigate risks, and address emergency expenditures. We
recommend that a more detailed review of these polices be performed. This review should
also seek to determine the extent to which existing COT code sections are applicable to, and
should be followed by, the BOE.

We recommend further review into the day-to-day practices of the purchasing department of
the BOE, in order to form a more comprehensive set of policies and procedures that address
potential internal control gaps and weaknesses.

It appears that the current IT Director has not put in place a policy of identifying and tracking
inventory of all IT equipment, which we believe should be done immediately. We also
recommend that a detailed physical inventory inspection of IT equipment be performed, and
compare the results of that inspection with the documentation for all of the IT equipment
purchased since 2013. Further, we recommend that the BOE establish a perpetual inventory
tracking system for IT equipment, whereby information on inventory quantity and
availability is updated on a continuous basis.

February 1, 2016

Page | 20

The rate billed by Mr. Luna for managing the WiFi upgrade project ($193.80) was in excess
of the rate agreed to in the outsource contract ($75.00). In total, the amount billed for this
project was $24,613 (127 hours times $193.80 per hour). Mr. Lunas outsource contract did
include WiFi Management as part of the scope of work. However, the nature of work
involved in upgrading a WiFi system is different from routine maintenance and there is not
enough detail provided in the contract to describe what services were required of Mr. Luna
and his technicians as part of WiFi Management.
o Assuming these hours were incurred for work that was truly outside the scope of the
outsourcing contract, then at minimum, the BOE could potentially seek recovery for
the difference between the rates, which is $15,088 (127 hours times $75.00 per hour
equals $9,525; $24,613 minus $9,525 equals $15,088). We recommend that the BOE
discuss with legal counsel the possibility of seeking recovery of the difference
between the rates.
o We recommend that further research be conducted to identify whether the scope of
WiFi Management was limited to routine maintenance or extends to system
upgrades. If in fact the scope includes system upgrades, then this is evidence to
support potential recovery of the entire billed amount of $24,613, not just the
difference between the rates noted in the paragraph above.

We noted that PH had charged $44,500 for creating network documentation and a
computer inventory during April, May and June of 2013. We note that this cost is $19,500
in excess of the $25,000 cost listed in the outsourcing contract.
o Assuming that this network documentation and computer inventory was completed,
we recommend that that the BOE request said documents from PH, and consult legal
counsel to potentially seek recovery of the $19,500 paid in excess of the outsourcing
contract.
o We recommend that if the network documentation and computer inventory cannot be
provided, that the BOE consult legal counsel to potentially seek recovery of the entire
billed amount of $44,500.

Lastly, we recommend that the BOE consult legal counsel to potentially seek recovery of the
aforementioned $115,600 overpayment made to PH.

February 1, 2016

Page | 21

As always, we remain available to discuss any aspect of this report or any additional areas in
which you may have questions. Please do not hesitate to contact us.

Respectfully submitted,

Brian P. Sanvidge, CIG, CFE

February 1, 2016

Page | 22

APPENDIX A
LIST OF INTERVIEWEES

Richard Luna Owner of Protected Harbor and IT Director of the Torrington Board of
Education

Donna Labbe Grant writer and grant manager, Torrington Board of Education

Carrie Gorman Accounts payable, Torrington Board of Education

Lisa Schimels Former technology secretary for the Torrington Board of Education

Lynda Reitman Interim Superintendent, Torrington Board of Education

Hugh Potter Director of Business Services, Torrington Board of Education

Tina Tanguay Former accountant, Torrington Board of Education

Cheryl Kloczko Former superintendent, Torrington Board of Education

DOCUMENTS REVIEWED

RFP prepared by Torrington BOE for IT Services (undated)

Mandatory Pre-Bid Meeting Sign In Sheet March 2013

Bid Response, Consolidated Computing Inc. April 2013

Outsourcing Plan prepared by Protected Harbor/NetMagic Systems for IT Services

(undated)

Outsourcing Contract prepared by Protected Harbor/NetMagic Systems for IT Services

(signed and undated)

Torrington Wiring Breakdown prepared by Protected Harbor/NetMagic Systems

(undated)

February 1, 2016

Page | 23

Article by The Register Citizen concerning Torringtons new IT contract October 2013

RFP prepared by Torrington BOE for IT Services October 2013

Protected Harbor/NetMagic Systems response to RFP for IT services October 2013

IT Services Agreement prepared by Torrington BOE June 2014

Assessment PowerPoint prepared by Protected Harbor/NetMagic Systems (undated)

Recap PowerPoint prepared by Protected Harbor/NetMagic Systems (undated)

Server Analysis Report and Recommendations prepared by Protected Harbor/NetMagic

Systems (undated)

Technology Review PowerPoint prepared by Protected Harbor/NetMagic Systems

(undated)

Torrington Findings prepared by Protected Harbor/NetMagic Systems (undated)

The City of Torrington Public School Proposal prepared by the Ergonomic Group
December 2012

Contracting/Procurement Overview prepared by the State of Connecticut (undated)

IT Inventory Items prepared by the school district of Torrington (undated)

Grant Awarding letter prepared by the State of Connecticut May 2015

Device Indicator report prepared by Protected Harbor/NetMagic Systems August 2013

Central and District Totals prepared by the school district of Torrington for years 20142015

Master Data Services Agreement prepared by Advanced Corporate Networking Inc.

March 2015

Purchasing Agreement for E-Rate Customers prepared by CDW Government LLC

(unsigned and undated)

February 1, 2016

Page | 24

By-Laws of the Board of Education prepared by Torrington Public Schools August 2015

Code of Ethics prepared by the City of Torrington January 2001

Code of Ethics prepared by the school district of Torrington August 2010

Legal Responsibilities Statement prepared by the school district of Torrington June 1992

Administrative Decisions Statement prepared by the school district of Torrington

September 2010

Administrative Organization Statement prepared by the school district of Torrington

September 2010

Awarding of Contracts Statement prepared by the school district of Torrington October

2010

Purchasing Policy prepared by the school district of Torrington November 2003

Inventories/Equipment Statement prepared by the school district of Torrington May 2002

Annual Audit Statements and Guidelines prepared by the school district of Torrington
October 2010

Periodic Financial Reports Statement prepared by the school district of Torrington

November 2010

Transfer of Funds between Categories; Amendments prepared by the school district of

Torrington March 2001

School Activity Funds prepared by the school district of Torrington May 2012

February 1, 2016

Page | 25

VENDOR INVOICES REVIEWED

Protected Harbor/NetMagic Systems Inc.

o Invoices April 2013 June 2015
o Purchase Orders April 2013 June 2015

CDW-G
o Invoices March 2013 April 2015
o Purchase Orders March 2013 April 2015
o Sales Quotes March 2013 April 2015

Gain Communications
o Invoices August 2013 April 2015
o Purchase Orders August 2013 April 2015

Hewlett-Packard
o Invoices March 2013 March 2015
o Purchase Orders March 2013 March 2015
o Sales Quotes March 2013 March 2015

GOVERNMENT REGULATIONS & POLICIES REVIEW

Connecticut General Statutes 4a-59

Torrington, Connecticut Code of Ordinances

o Title XIII Budget, Finance and Extraordinary Measures, specifically:
C13-6 Expenditures not to exceed estimates
C13-7 Extraordinary expenditures under $100,000.00
C13-8 Expenditures exceeding $100,000.00
C13-8a Extraordinary expenditures exceeding C13-8 limit
o Title XVI Division of Purchasing, specifically:
C16-4 Competitive bidding

Torrington School District Policies, specifically:

o Policy 3040: Transfer of Funds Between Categories
o Policy 3000: Awarding of Contracts
o Policy 3010: Purchasing Policy

February 1, 2016

Page | 26

APPENDIX B

Resume

Brian P. Sanvidge, CIG, CFE

Principal
212 792 4836
brian.sanvidge@bakertilly.com

Brian has over 33 years of experience working with businesses on labor investigations,
fraud investigations, disaster recovery, and business continuity. Brian translates his 25
years of government experience to providing litigation and monitorship services within the
construction, hospitality, and healthcare/pharmaceutical industries. Brian is a Certified
Inspector General based in New York, and has lectured nationally on labor law, business
fraud, white-collar crime, and tax fraud, as well as regulatory compliance and government
investigations for groups including the New York State Surrogate Bench as well as
several bar associations.

Specific experience
>

Inspector General for twelve years (ten of which for the New York State Department
of Labor (DOL)), overseeing the civil and criminal investigations conducted by the
department

>

Certified Inspector General since August, 2010

>

Retained as an expert on behalf of the government for several cases

>

Oversaw 5,000 civil and criminal investigations conducted by the Department of

Labor that resulted in criminal convictions and civil restitutions of $250 million

>

Qualified as an expert witness in financial crimes in the State and Federal court
systems as well as in American Arbitrations Association (AAA) arbitrations

>

Supports employee classifications, public work, and wage and hour disputes

>

Aids local, county and state government investigations and/or monitorship cases

>

Works with multiple Women Owned Minority businesses

>

Supervises data analysis and computer forensic techniques to uncover defensible

information

>

Supports large-scale government monitorship cases, some as large as $1 billion

dollars

>

Supports external and internal legal counsel government investigations, government

compliance, forensic accounting and investigations

>

Assists in fraud case related to labor, construction, healthcare and not-for-profit

>

Provided investigation into Global 50 healthcare company with $7 million in

questioned costs

Resume, continued
>

In December 2013, was honored to be included among the Who's Who of Forensic
Accountants, by Long Island Business News

Industry involvement
>

Association of Inspectors General

>

Association of Certified Fraud Examiners

>

National Association of Criminal Defense Lawyers (NACD)

>

American Bar Association

>

Citizen's Budget Commission - Trustee

>

International Association of Independent Private Sector Inspectors General

>

National White Collar Crime Center - Certified Financial Records Expert Witness

>

New York Metro InfraGard Alliance - Secure member

>

American Society for Industrial Security

National Education
State University of New York at Albany
Bachelor of Arts in Political Science

Resume

Joel R. Podgor, CPA/CFF, CFE

Partner
212 792 4850
joel.podgor@bakertilly.com

Joel has over 40 years of experience in tax advocacy and litigation consulting. Joel has
extensive experience as a provider of expert witness testimony in litigation matters, tax
fraud, criminal fraud and matrimonial litigation. As a Kovel accountant, Joel works closely
with criminal and civil tax counsel. Joel is based out of New York, NY, and is a Certified
Fraud Examiner.

Specific experience
>

Qualified to serve as a Court Appointed Forensic Accountant pursuant to NYS Part

36

>

Works regularly under client privilege, operating in full confidentiality, for a variety of
high profile cases

>

Quantifies damages in cases related to discrimination, shareholder disputes, and

insurance fraud

>

Aids investigations related to securities, bank, mail and wire fraud

>

Works with in-house counsel to uncover, quantify and help put in place procedures to
avoid reoccurrence

>

Assists in tax examinations by identifying ways to mitigate alleged tax loss and verify
whether or not there are additional tax preparation errors

>

Works with attorneys to identify opportunities or strategies to reduce the amount of

money included in criminal conduct, pursuant to sentencing guidelines

>

Performs accounting and tax work for attorneys representing clients going through
the Offshore Voluntary Disclosure Initiative (OVDI) and/or Streamlined Filing
Compliance Procedures

Industry involvement
>

American Institute of Certified Public Accountants

>

New York State Society of Certified Public Accountants (NYSSCPA)

>

Association of Certified Fraud Examiners

>

NYSSCPA Litigation Support Committee

>

Former chairman, NYSSCPA Domestic Relations Committee

Resume, continued
Education
Fort Lauderdale University
Bachelor of Business Administration in Accounting

Resume

Amy Slevinski, CFE, MFS

Manager
703 923 8420
amy.slevinski@bakertilly.com

Amy is a manager in our Forensic, Litigation, and Valuation Services practice and has
been with the firm since 2011. She has eight years of experience in forensic
investigations, fraud risk management, litigation support, digital forensics, and data
analytics. Amy has worked with clients across a wide variety of industries including higher
education, not for profits, government contracting, financial services, the federal
government, real estate/construction, and telecommunications.

Specific experience
>

Performs investigations into allegations of fraud or misconduct for public and private
entities on behalf of internal or external counsel, chief audit executives, and other
senior leaders

>

Provides guidance to clients regarding the management of fraud risk including, but
not limited to performing fraud risk assessments, assessing anti-fraud programs and
controls, facilitating fraud awareness and training, and developing reporting
processes and procedures

>

Consults with clients on digital forensic and e-discovery needs such as the
acquisition, preservation, and analysis of electronic evidence in support of
investigations or litigation

>

Performs data analytics using Audimations IDEA software to detect potential

indicators of fraud or misconduct and assists clients with implementing continuous
monitoring programs

>

Assists global entities with compliance assessments and investigations pertaining to

the Foreign Corrupt Practices Act (FCPA)

Industry involvement
>

Association of Certified Fraud Examiners (ACFE)

>

Institute of Internal Auditors (IIA)

>

Women in eDiscovery

Resume, continued
Amy Slevinski, page 2

Presentations and publications

>

Co-presented From Wedding Bells to Prison Cells: A Case Study in Not-for-Profit

Diversion of Assets, US Trust / Bank of America Webinar Series (August 2014)

>

Co-presented Taking the Fear out of IT Fraud Association of Certified Fraud

Examiners DC Chapter (January 2014)

>

Co-presented Dont Forget Your Deposition is in the Morning! Are You Ready?
National Association of Construction Auditors Annual Conference (September 2012)

>

Co-presented Computer Forensics Process and Pitfalls Women in eDiscovery

DC Chapter Meeting (January 2007)

>

Authored Data Speaks: What Does It Say About Your Organization? Protiviti
KnowledgeLeader series (2006)

Education
George Washington University
Master of Science in High Technology Crime Investigation
University of Pittsburgh
Bachelor of Science in Business Management/MIS

Resume

Matthew L. OLeary, CPA/CFF/CITP, CFE

Senior Consultant
212 792 6108
matthew.oleary@bakertilly.com

Matthew is a senior consultant in the firms forensic, litigation, and valuation services
group since 2013. His forensic experience includes digital forensic analysis, white-collar
crime investigations, and tax fraud investigations. Besides fraud experience, he offers
accounting, and tax experience, as well as experience in data analysis and database
management. Prior to becoming forensic accountant, Matt worked as a financial auditor.

Specific experience
>

Performed compilation, review and audit engagements for clients in various

industries, including healthcare, non-profit, distribution, logistics, apparel, food and
beverage, investment companies, and 401(k) plans, prior to becoming forensic
accountant

>

Assisted in the development and management of several recordkeeping and

investigative databases used for security and employee related matters

>

Performed bank reconciliations and post disbursements and receivables into

database software

>

Designed and improved Microsoft Access database applications

>

Managed database projects and trained personnel in database management and

design

Industry involvement
>

New York State Society of Certified Public Accountants

>

American Institute of Certified Public Accountants

>

Association of Certified Fraud Examiners

Education
St. Johns University
Master of Science in Accounting
Bachelor of Science in Accounting

Resume

Erik Perdon, CPA

Senior Consultant
646 776 6286
erik.perdon@bakertilly.com

Erik is a senior consultant in our forensic, litigation, and valuation services group. Prior to
working at Baker Tilly, Erik worked as a financial auditor, performing review and audit
engagements for both public and private company clients in the banking, broker-dealer,
insurance, and consulting industries.

Specific experience
>

Performs internal controls testing

>

Assists in Sarbanes-Oxley Act compliance testing

>

Manage audit engagements for clients ranging in size of multi-million to multi-billion

dollars

>

Performs fraud detection testing

>

Performs monitoring of compliance for government contracts

>

Performs criminal and civil investigations relating to various types of fraud schemes

Industry Involvement
>

American Institute of Certified Public Accountants

>

New Jersey Society of Certified Public Accountants

>

Association of Certified Fraud Examiners

>

New York State Society of Certified Public Accountants

Education
Seton Hall University
Masters of Science in Professional Accounting
Montclair State University
Bachelor of Science in Accounting

Resume

Joshua Wiesenfeld, MPA

Staff Consultant
646 766 6242
joshua.wiesenfeld@bakertilly.com

Joshua is a staff consultant in the New York office of the firms forensic, litigation, and
valuation services group, which is comprised of more than 100 professionals working in
tax, audit, consulting. Prior to Baker Tilly, he worked at the Port Authority of New
York/New Jersey Office of the Inspector General and the Association of Inspectors
General. He has been with the firm since 2014.

Specific experience
>

Provides review and governance regarding compliance and regulatory issues

>

Assesses compliance strategies

>

Specializes in fraud, investigative services, and compliance

>

Assists the business fraud and investigative services team with various investigations

>

Serves large construction clients with compliance regulation and strategy needs

Industry involvement
>

The Association of Inspectors General

>

The Association of Certified Fraud Examiners

>

American Institute of Certified Public Accountants

Education
John Jay College of Criminal Justice
Masters of Public Administration in Forensic Accounting
John Jay College of Criminal Justice
Advanced Certificate in Forensic Accounting
Yeshiva University
Bachelor of Arts in Political Science, Minor in Economics

EXHIBIT 1

EXHIBIT 1

EXHIBIT 1

EXHIBIT 1

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 2

EXHIBIT 3

EXHIBIT 4

EXHIBIT 4

EXHIBIT 5

Vendor

InvoiceNumber

Description
InstallationofTMSlaptops1.5
7/18/2014 hoursperlaptop@75$perhour
SpamfilterforJuly,August,
8/12/2014 September

InvoiceDate

ProtectedHarbor

12951

ProtectedHarbor

13006

ProtectedHarbor
ProtectedHarbor

13005
13005

ProtectedHarbor
ProtectedHarbor

13004
13004

ProtectedHarbor

12999

SamsungTVsforSecurityMonitors
8/12/2014 forTMS;purchasedfromAmazon
8/12/2014 Mounting&Installation
SamsungTVsforTMS;purchased
8/12/2014 fromAmazon
8/12/2014 Installation
ReimbursementHammerDrilfor
7/29/2014 SmartBoardinstallations

ProtectedHarbor
ProtectedHarbor
ProtectedHarbor

12999
12900
13112

ReimbursementMonitormounts
7/29/2014 forTMSsecuritymonitors
6/20/2014 SpamfilterforApril,May&June
10/20/2014 SpamfilterforOct,Nov,Dec

ProtectedHarbor
ProtectedHarbor
ProtectedHarbor

13307
13307

ProtectedHarbor
ProtectedHarbor

13307
13314

ProtectedHarbor

13372

ProtectedHarbor

13308

ProtectedHarbor
ProtectedHarbor

InstallationofSmartboardsat
12/16/2014 Torringford
Installsoloarminmusicroomat
2/9/2015 East
2/9/2015 InstallSmartBoardintoLMC
InstallEpsonProjectorMelissaKain
Forbesoldprojectornever
connectedacrossfromloading
2/9/2015 dock
2/10/2015 SpamfilterforJan,Feb,March

Quantity(if
applicable)

Cost

TotalCost

PurchaseOrder
Date

$38,475.00 $38,475.00

8/4/2014

3.00 210.00 630.00

10/10/2014

1.00 484.94 484.94

250.00 250.00

10/10/2014
10/10/2014

1.00 6,578.33 6,578.33

 2,800.00  2,800.00

10/10/2014
10/10/2014

1.00 328.50 328.50

10/10/2014

2.00 330.00 660.00

 3.00 210.00 630.00
 3.00 210.00 630.00

10/10/2014
10/10/2014
12/3/2014

3.00 350.00 1,050.00

1/13/2015

2.00 70.00 140.00

 4.00 70.00 280.00

3/17/2015
3/17/2015

2.00 70.00 140.00

 3.00 210.00 630.00

3/17/2015
3/17/2015

21.00 350.00 7,350.00

3/17/2015

3.00 350.00 1,050.00

3/17/2015

13315

3/10/2015 InstallationofSmartboardsatTHS
InstallationofSmartboardsat
2/9/2015 Torringford
InstallationofSouthWestlaptops
perRFP1.5hoursperlaptop@
2/21/2015 $75perhour

26.00 112.50 2,925.00

3/17/2015

13376

3/13/2015 InstallationofWhiteBoardsatTHS

21.00 35.00 735.00

3/25/2015

PRIVILEGEDANDCONFIDENTIAL

PAGE1

EXHIBIT 5

Vendor

InvoiceNumber

ProtectedHarbor
ProtectedHarbor

13377
13437

3/13/2015
4/3/2015

NetMagicSystems
NetMagicSystems
NetMagicSystems

12110
12276

5/6/2013
8/16/2013

N/A

Description

InvoiceDate

N/A

Quantity(if
applicable)

Cost

TotalCost

PurchaseOrder
Date

Additionaltechniciantohelpinstall
andconfigureLAStestingsoftware
onacriticalbasescecauseofLAS
testingupdatebug
17.00 75.00 1,275.00
3/25/2015
SpamfilterforApril,May&June
 3.00 210.00 630.00
4/8/2015
May2013OutsourcingInvoicePro
Purchaseorder
RatesfromMay2,2013
27,675.00 27,675.00 notprovided
AdditionalSummerLabor
 20,000.00  20,000.00
8/22/2013
OnSiteTechAugust2013
 3,417.00  3,417.00
8/26/2013
OnSiteTechAugust&Septemeber
2013(Thomas)
2.00 6,834.00 13,668.00
9/13/2013
OnSiteTechSeptemeber2013
(Nick)
2.00 3,417.00 6,834.00
9/13/2013

NetMagicSystems

12353

9/20/2013

NetMagicSystems

12352

9/20/2013

NetMagicSystems

12350

9/20/2013 Cables

25.00 15.00 375.00

9/13/2013

NetMagicSystems

12354

9/20/2013 Transcievers

4.00 375.00 1,500.00

9/13/2013

NetMagicSystems

12355

NetMagicSystems

12278

NetMagicSystems
NetMagicSystems

12455
12462

NetMagicSystems

12537

NetMagicSystems

12550

NetMagicSystems

12599

NetMagicSystems
NetMagicSystems
NetMagicSystems

12599
12599
12599

NetMagicSystems

12601

NetMagicSystems

12601

NetMagicSystems

12598

9/30/2013 AppleiPadrepairreimbursement
2.00
AdditionalTechnicalSupportforJuly
8/19/2013 2013
1.00
MiscPartsOrderedfromNewEgg
10/29/2013 Reimbursement
11/13/2013 VideoPartsforTMS
 2.00
AdditionalTechnicalSupportfor
12/12/2013 Nov213
AdditionalTechnicalSupportforDec
12/21/2013 (includesSmartBoards)
NewEggOrderHardware
2/3/2014 Reimbursement(VGACable)
AmazonOrderHardware
2/3/2014 Reimbursement
2/3/2014 NewEggCableReimbursement
2/3/2014 NewEggTools
NewEggOrderHardware
2/3/2014 Reeimbursement10Mice
NewEggNetworkingCables25fro
2/3/2014 SmartBoards
AdditionalTechnicalSupportfor
2/3/2014 January2014

PRIVILEGEDANDCONFIDENTIAL

294.81 589.62

10/16/2013

20,000.00 20,000.00

10/16/2013

627.00 627.00
177.14 354.28

11/6/2013
11/19/2013

16,000.00 16,000.00

12/19/2013

20,000.00 20,000.00

1/9/2014

4,755.11 4,755.11

2/11/2014

2,655.83 2,655.83
 1,655.33  1,655.33
 2,655.81  2,655.81

2/11/2014
2/11/2014
2/11/2014

406.84 406.84

2/11/2014

221.55 221.55

2/11/2014

20,000.00 20,000.00

2/11/2014

PAGE2

EXHIBIT 5

Vendor

InvoiceNumber

InvoiceDate

NetMagicSystems

12551

12/21/2013

NetMagicSystems

12706

3/8/2014

NetMagicSystems

12721

3/19/2014

NetMagicSystems

12774

4/8/2014

NetMagicSystems
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications

12715
148231
148232
148295
148309
148308
148307
148371
148368
148370
148369
148401
148402
148406

3/13/2014
9/5/2013
8/5/2013
9/18/2013
9/20/2013
9/19/2013
9/19/2013
10/4/2013
10/4/2013
10/4/2013
10/4/2013
10/10/2013
10/10/2013
10/10/2013

GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications

148421
148426
148545
148561
148562
148563
148616
149170
149169
149171
149234

10/18/2013
10/18/2013
11/13/2013
11/19/2013
11/19/2013
11/19/2013
11/27/2013
4/2/2014
4/2/2014
4/2/2014
4/15/2014

GainCommunications
GainCommunications
GainCommunications

Quantity(if
Description
applicable)
PartsReimbursement(NewEgg&
Amazon)(THSLab&SBs)
AdditionalTechSuportforFeb
(IncludesSmartboards)
AdditionalTechnicalSupportfor
Mar(includesSmartBoards)
WIFIProjectManagementRichard
LunaApril;includesmeetings,
conferencecallsandWIFIproject
workhours
42.00
SpamfilterforJanuary,February
andMarch2014
3.00
Laboroutofstate
 8.00
Laboroutofstate
 5.00
Laboroutofstate
 2.00
Laboroutofstate
 1.00
Laboroutofstate
 6.00
Laboroutofstate
 2.00
Laboroutofstate
 2.00
Laboroutofstate
 2.00
Laboroutofstate
 1.00
Laboroutofstate
 1.00
Laboroutofstate
 1.00
Laboroutofstate
 1.00
Laboroutofstate
 1.00

Cost

TotalCost

PurchaseOrder
Date

3,904.53 3,904.53

2/20/2014

20,000.00 20,000.00

3/27/2014

20,000.00 20,000.00

5/6/2014

193.80 8,139.60

5/6/2014

210.00 630.00
160.00  1,280.00
160.00 800.00
160.00 320.00
160.00 160.00
160.00 960.00
160.00 320.00
160.00 320.00
160.00 320.00
160.00 160.00
160.00 160.00
160.00 160.00
160.00 160.00
160.00 160.00

3/24/2014
9/23/2013
9/23/2013
9/23/2013
10/9/2013
10/9/2013
10/9/2013
10/16/2013
10/16/2013
10/16/2013
10/16/2013
10/29/2013
10/29/2013
10/29/2013

3.00 130.00 390.00

 1.00 160.00 160.00
 1.00 160.00 160.00
 5.00 160.00 800.00
 1.00 160.00 160.00
 2.00 160.00 320.00
 1.00 160.00 160.00
 1.00 160.00 160.00
 1.00 160.00 160.00
 1.50 160.00 240.00
 1.00 160.00 160.00

10/29/2013
10/29/2013
11/22/2013
12/3/2013
12/3/2013
12/3/2013
12/12/2013
4/23/2014
4/23/2014
4/23/2014
4/25/2014

149559

InstallationLabor(NewSystems)
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
InstallationofadditonalCAT6cable
6/20/2014 &

1.00 628.00 628.00

6/26/2014

149560
149477

6/24/2014 Installationof1CAT6Cable&Mo
6/6/2014 Laboroutofstate

1.00 628.00 628.00

 1.00 160.00 160.00

6/26/2014
6/16/2014

PRIVILEGEDANDCONFIDENTIAL

PAGE3

EXHIBIT 5

Vendor
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
GainCommunications
ValleyCommunicationsSystems
ValleyCommunicationsSystems

InvoiceNumber
149444
149920
149922
149921
149900
149908
149821
149820
150122
150121
150123
149733
149764
150064
150065
150121
150122
150123
150460
150559
150582
150605

InvoiceDate
6/3/2014
9/11/2014
9/11/2014
9/11/2014
9/4/2014
9/4/2014
8/20/2014
8/20/2014
10/24/2014
10/24/2014
10/24/2014
7/31/2014
8/13/2014
10/8/2014
10/8/2014
10/24/2014
10/24/2014
10/31/2014
1/7/2015
1/28/2015
1/29/2015
2/6/2015

150905
150902
627569
628499

4/16/2015
4/16/2015
10/31/2014
12/18/2014

Description
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate
Laboroutofstate

Quantity(if
applicable)
 7.00
 2.00
 4.00
 1.00
 1.00
 9.00
 5.00
 3.00
 1.00
 1.00
 1.50
12.00
 2.00
 1.00
 1.00
 1.00
 1.00
 1.00
 2.00
 1.00
 4.00
 3.00

TotalCost
 1,120.00
320.00
640.00
160.00
160.00
 1,440.00
800.00
480.00
160.00
160.00
240.00
 1,920.00
320.00
160.00
160.00
160.00
160.00
160.00
320.00
160.00
640.00
480.00

PurchaseOrder
Date
6/6/2014
10/2/2014
10/2/2014
10/2/2014
10/10/2014
10/10/2014
10/21/2014
10/21/2014
11/21/2014
11/21/2014
11/21/2014
11/25/2014
11/25/2014
11/25/2014
11/25/2014
11/25/2014
11/25/2014
11/25/2014
1/16/2015
3/2/2015
2/26/2015
3/2/2015

LaborConnecticut
Laboroutofstate
Labor
VideoServiceLabor

3.00 160.00 480.00

 1.00 160.00 160.00
 1.00 76.00 76.00
 1.00 76.00 76.00

4/29/2015
5/21/2015
10/30/2014
12/23/2014

Cost
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00
160.00

$ 304,414.27

PRIVILEGEDANDCONFIDENTIAL

PAGE4

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EXHIBIT 11

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