When New Canaan Public Schools’ budget director returns from summer break next week, she’ll help create reports that could establish or rule out the notion that the lunch ladies arrested last week depleted school parents’ funds while stealing nearly $500,000 from the district itself, officials said Monday night.
Tracy Haberman knows the point-of-sale or ‘POS’ software system used at cash registers in Saxe Middle School and New Canaan High School “very, very well,” according to Dr. Jo-Ann Keating, director of finance and operations for the district.
“We are going to look at pulling reports and I am not certain that all the transactions are time-stamped, but that would be a key piece to doing an audit and reviewing accounts that have been modified,” Keating told members of the Board of Education during their regular meeting, held in the Wagner Room at New Canaan High School.
“So, we can see where transactions take place—a parent deposits to a child’s account, it is pulled in through the system, a child goes to a register to purchase something, it’s keyed in there—and we can also see if there are double entries at that point and we can also see if someone went in and modified after-the-fact. So those are the kinds of things that we are going to try and audit and we are going to be looking at situations surrounding those changes, if there are any, and also look at the frequency of that. And also try to make some meaning out of that data.”
The comments came during a presentation from Keating that put into the context of the district’s own longstanding efforts to ensure proper financial controls the widely publicized larceny charges brought against a pair of sisters who had overseen the two school cafeterias for a number of years.
According to information gleaned from arrest warrant applications, the sisters used a similar method to steal money at each school: First, they allowed and in some cases, food service workers say, advised the women stationed at cash registers to take in cash without recording the transactions in the registers, then removed large bills from registers themselves, “counting out” the drawers in private at the end of the day and reporting just a small deposit of what remained.
It’s unclear at this point whether some separate method also was used to account for the sold inventory—in other words, to make it appear that items purchased with cash (later stolen) had been paid for in some other way (for example, whether some of the $478,588 in missing funds was charged instead to purchase cards or student IDs in order to account for the reduced inventory).
Keating and Superintendent of Schools Dr. Bryan Luizzi both underscored at the meeting that, to this point, the only “victim” of the sisters’ alleged theft is the district itself.
Yet police heard from one of 10 food service workers interviewed during the months-long investigation that she was “surprised that the Board of Education didn’t pick up on the loss of money sooner,” according to an arrest warrant application that included testimony from New Canaan Police Sgt. Kevin Casey, an investigator.
“She felt that the BOE should have picked up on how much food was being ordered and how much money was being taken in,” Casey reported in the affidavit.
Ultimately, New Canaan Police on Aug. 11 charged Marie Wilson, 67, of Wilton, by warrant with first-degree larceny, a felony offense. Wilson had been employed as the assistant food director at New Canaan High School. The following day, her sister Joanne Pascarelli, 61, of Norwalk turned herself in on an arrest warrant for the same charge. She had overseen the food services program at Saxe.
Though the Board of Ed has been reimbursed the $500,000 by its insurance company, the district opted to pursue a criminal case.
That case started in earnest on Dec. 21, when district officials notified police about the missing money.
At about 9 a.m. that day (a Thursday), the head of finance for New Canaan Public Schools met with Casey and Sgt. Peter Condos of the New Canaan Police Department Investigations Division “to discuss the theft of money that had been occurring within the school system for quite some time,” according to an affidavit from Casey that is the basis of arrest warrant applications for both women.
The thefts took place at the cafeterias of both Saxe and NCHS for up to 15 years, according to the affidavit. “It is believed that the thefts were occurring much farther back then 2012 but school records and statute of limitations prevented us from looking further back in time,” the affidavit said.
According to the arrest warrant application, the Board of Ed had conducted its own internal investigation based on a cafeteria worker’s complaint regarding the mishandling of money by the sisters, putting Pascarelli on administrative leave on Nov. 16 while Wilson, facing termination, resigned Dec. 5.
NCPS had become aware of possible thefts “awhile back,” according to the district’s testimony as cited by Casey, “when the school board decided to look into how their employees handle cash after a different, unrelated incident had occurred.” (That incident goes unspecified in the application.)
Two summers ago, the school board put in place a new point-of-sale or ‘POS’ system called ‘Solana,’ which “incorporated a blind close accounting format,” according to the affidavit.
“In this type of system, the cashier is unaware of the amount taken in and must count out the drawer and sign a deposit slip for the money they counted,” the application said. “The POS system knows how much each type of bill and change should have been brought in. Upon instituting the system, and after Marie Wilson and Joanne Pascarelli left the BOE there was a substantial increase in the daily cash deposits.”
Here’s a table tracking the average daily deposits at Saxe Middle School by fiscal year for the last several years, where student enrollment remained steady (varying by no more than 30 students, on average):
Average Daily Deposits, Food Services at Saxe Middle School
|Academic year ending||Average|
In their investigation, Casey and Condos reviewed documentation provided by the schools, the affidavit said, including deposit slips, till reports and financial records from the food services divisions of both schools for the past five years.
“What stood out to me were the ‘till reports,’ ” Casey said in the affidavit. “These reports show each point of sale terminal, who was logged into it and how much, if any, cash was brought in each day. These till reports allowed us to look for any patterns with employees as it pertains to taking in cash at the registers.”
As part of the investigation, Casey traveled to NCHS and observed how cash is handled for the lunch program. There, he found that four cash registers are used and take in cash. The till reports that Casey obtained from the Board of Ed showed “no cash coming in for long periods of time” for “some of the registers.”
On Feb. 5, Wilson came to police headquarters for an interview, accompanied by attorney Steven Frederick of Stamford-based Wofsey, Rosen, Kweskin & Kuriansky LLP (her attorney now is Stamford’s Mark Sherman, who has denied the charges).
Wilson told investigators that she retired Dec. 4 and was then surprised to learn that the town was withholding her pension because of an open police investigation.
“Wilson stated that the only thing she is guilty of is feeding a child who had no money or giving somebody a cookie and that’s it, that’s all she has ever done,” Casey said in his affidavit. “She said she has always done her best and never called in sick for 30 years.”
According to Wilson, procedures for food services changed when a new individual took over finance and operations for the district, about three years ago. Before then, she said, cashiers would give her their register drawers and Wilson would count out the money with the food services director and deposit it in the bank the following day, the affidavit said.
The “Fastlane” POS system had been “a disaster from the beginning,” Wilson told investigators, according to Casey’s notes from the meeting.
“Kids were able to buy things and it wouldn’t deduct it from their account,” the affidavit said, citing Wilson’s testimony. “Then the school would have to credit money back. She stated that Saxe was notorious for that” and that officials “did not want to cause any issues with the parents.”
“They would get kids charging a lot to their accounts,” the affidavit said.
Wilson told police she “had no idea” who stole the money, it said.
According to Wilson, the computer system itself—the POS at the cash registers—was difficult for lunch ladies to operate.
“She stated that the buttons on the system are hard to see especially if you need glasses,” the affidavit said. “If you don’t push the right buttons it was a problem. It’s all very specific and when it gets busy you can be like a fish out of water …. A lot of girls would push any button to get them off the line when it was busy. Especially at Saxe. So with the stealing going on by the kids, the administration wanting them out of there as quick as possible, trying to get 300 kids out of there, yelling and screaming. It’s all very political there. She stated that [one worker] was pulled off the register for telling the kids their balance and not pushing the right buttons. Parents would complain it was wrong to tell the kids their balance.”
Asked by investigators how money would be counted at the end of the day, Wilson said that it took the cashiers “too long” to count it out, so she would count in front of them, then they cashiers would recount and “punch it in.”
Yet if the funds in the drawer did not match the till reports, Wilson said she would “put the right amount in” and “fix it.”
“Asked how she would ‘fix it’ [Wilson] said it would be there,” Casey wrote in his affidavit. “She did state that a couple of times she took money from her own pocket to fix it for a couple of girls.”
Up until three years ago, all the money from cafeteria was pooled in one lump sum, rather than broken down on a per-register basis, Wilson said.
Asked by investigators about how much cash NCHS would bring in on a given day, Wilson “avoided giving a number but offered many excuses as to why the numbers would change,” the affidavit said.
“She said it would depend on what they were serving, some kids would prefer a sandwich and they were more expensive,” the report said. “She said exams would affect the cash taken in. January a lot of kids moved out of the area so that would change the numbers. Rainy days versus sunny days would affect the cash flow.”
Asked what would happen if the register was “over” and there was extra cash in the drawers, Wilson said, “Oh yeah they caught me with $18 extra in my petty cash,” according to Casey’s affidavit.
Casey noted some discrepancies between Wilson’s description of the food services cash-handling and records that investigators turned up as well as testimony from cashiers themselves. For example, when asked who filled out deposit slips, Wilson said that she did and then the cashiers would take it from her and put the slip in their money bags. When the cashiers closed, Wilson could see if the money wasn’t right and would tell them to recount it.
“Wilson stated that she did not need to sign the deposit slips but you could see her handwriting on them,” the affidavit notes.
Wilson also denied that she had ever asked a food services worker to sign a blank deposit slip (for her to fill out later), and said she didn’t think anyone could have altered the deposit slips after she handed them in. She also could not account for what Casey called “missing Fastlane documents,” referring to the former POS system.
“Wilson stated that she did not have to keep them, there was nothing to store, she wasn’t told to keep them,” the affidavit said, adding: “She had no idea what happened to the Fastlane paperwork.”
Asked by a detective if someone could have stolen money from the register because there was no paperwork to track cash, Wilson said: “With all the people around it would be really hard, it’s not like they went into a little closet or something with their drawer afterwards, you’ve seen the high school there is people everywhere, somebody would notice if somebody was putting something in their pocket. But that is my opinion.”
That testimony runs counter to what investigators were told during a March 5 interview with a cashier at NCHS. According to that cashier, during Wilson’s tenure, cashiers were told by Wilson not to count the drawer, that it was already done. Also, at the end of lunch, Wilson would not count drawers out in front of the cashiers, but would abscond to her office.
Asked how it was possible that some registers during the period she was in charge showed zero cash taken in, according to Casey, Wilson said: “I don’t know. If they didn’t have cash that’s all I could think of. If they didn’t have cash then we didn’t put it in.”
Yet some of the same cashiers almost never brought in cash, and that would go on for weeks or months, police said.
Wilson replied that “I couldn’t tell you” how that happened, the affidavit said.
The cashier later interviewed by police also provided statements that challenged Wilson’s account, saying she took in $140 to $150 per day and that “other registers are about the same.” Asked if there was ever a day that she didn’t take in cash, the cashier said, “No, kids pay cash too,” according to the affidavit.
Other NCHS cashiers interviewed by police corroborated that account.
The investigators told Wilson that after she resigned from the job, “the amount of cash has gone up dramatically” at the high school.
“I told her that some workers have been saying that she was taking cash,” the affidavit said. “I asked her if this was the case of everyone taking a little cash. I told her if she made a mistake and was taking cash, then now was the time to tell me.”
Wilson’s response was: “Did you go through my bank records yet? Then do that, because I am sure you will see I have no problems, um, with any of that. Um I made a lot of money, but not this way. You know I made a lot of money selling a house in New Canaan. I made a lot of money selling, um a house I was starting to build in Wilton. I mean, I don’t think, I don’t think I have anything to worry about.”
On Feb. 8, Casey and Condos met with the original complainant, and she told them that “she saw some things that she thought were weird in the beginning.”
“Then little by little she realized something wasn’t right,” Casey said in the affidavit. “She was told not to talk or she would be punished.”
Once, the woman said, a joke she made about those working in the food services division did not go over well with Pascarelli—and ultimately she was punished by being made to wash dishes for more than one year.
According to the complainant, Pascarelli would come to the cash registers at Saxe and “remove the large bills” between each of four lunch periods.
“Pascarelli would not tell them how much she was taking” and put the bills in a desk drawer, the affidavit said. When cash was handed over, nobody made a record of the transaction in the register itself, the complainant said, claiming that “Pascarelli trained her to do it that way.”
At the end of the day, under the Fastlane system, Pascarelli would take the register’s drawer but wouldn’t count it.
Though the food services staff members were trained by a representative from Solana how to enter cash into the POS system, Pascarelli told them when he left “that the new way was going to take too long,” the affidavit said.
“She made them revert back to the old way of not entering the cash into the drawer,” it said. At day’s end, Pascarelli would put a figure on a deposit slip and have the food services workers sign for it, though that amount would be “very low, like $27” though the complainant knew it should’ve been far higher, the affidavit said.
Other parts of the Solana protocol were ignored. For example, cashiers were supposed to count out their drawers and sign deposit slips before putting cash into bank bags, but those bags never came, the affidavit said. (After Pascarelli was put on leave, the complainant told police, the bank bags were put back into circulation and the Solana instructor’s processes were used.)
A second food services worker, speaking Spanish through Police Officer Roberto Lopez, corroborated the complainant’s account. A cook at Saxe who was interviewed by police said Pascarelli would have her “sign the blank paper,” meaning a deposit slip.
Another food services worker described “a lot of intimidation at work,” the affidavit said.
“You can’t speak out about anything or you will be put on dishes,” the affidavit said. She added later: “You can’t say no to Pascarelli.”
Once, one of the workers said she wasn’t going to volunteer for cooking detail and “she was punished by making her do dishes at the high school for two months,” the affidavit said.
A food services worker also told police that when she started her shift, someone had signed her into her register at the beginning of the day even though a Social Security number was needed to do so.
Police first interviewed Pascarelli on March 2, accompanied by attorney Mark Carta of Darien-based Carta McAlister & Moore LLC.
When police asked Pascarelli “what her day was like,” Carta said it would be best to specify a timeframe since “procedures changed dramatically over the years,” according to the affidavit.
During the interview with police, Casey said, Pascarelli told investigators that each cashier would count out $27 for the drawer to start the day and then, at the end, detail exactly what was in the drawer, put the money in a sealed plastic bag and that it then would go to the high school.
Yet that description did not jibe with the testimony of food services workers, Casey said in the application. According to them, the workers were “made to sign the blank deposit slips” and didn’t say anything about it because they feared retribution.
Casey said he asked Pascarelli about how much cash came into the Saxe registers under the Solana and Fastlane systems, and she said $100 to $150—even though the average intake, records showed, was less than $40. Pascarelli denied removing large bills from the registers, saying she only went to the registers between periods to make change for the cashiers if it was needed.
Casey said that during the interview, he talked about the till reports that broke down daily cash flow on a per-employee basis.
“I told Pascarelli that we interviewed numerous employees and they are all saying that she (Pascarelli) was stealing the money,” Casey said in the affidavit. “Pascarelli replied, ‘All the people that I worked with?’ then she said, ‘What gives them that idea?’ At that point we explained to Pascarelli that when she left the cash intake increased dramatically and asked her if she could explain why. Pascarelli said she didn’t see how that was possible. Then Pascarelli asked us, ‘By how much?’ I told her it was about $80 to $100 a day. She replied, ‘Something is wrong then because I would never do something like that.’ ”
Pascarelli also denied that she would empty registers of large bills after each lunch period and that she had instructed the cashiers to ignore Solana’s protocol regarding use of cash bags, though the delivery of those bags had been delayed, Casey said.
Casey said he then showed Pascarelli till reports that showed not all registers were bringing in cash, to which she responded, “Sometimes that would happen though where they would use the charge accounts.”
“I interrupted Pascarelli and said, ‘For 180 days, some women took in no cash for the whole school year.’ Pascarelli asked, ‘And what year was that?’ I told her 2016, 2015, 2014, 2013, 2012. Her response was, ‘I don’t know, you know.’ I then told Pascarelli that the cashiers gave me sworn written statements. At that point, I told Pascarelli, ‘Joanne, look, you’re caught.’ Pascarelli said, ‘They are lying.’ ”
According to the affidavit, told that the till reports themselves did not line up with Pascarelli’s system, she said, “Hmm, well I could tell you I did not. I would never take money, I know better than that.”
Casey said that he told Pascarelli if she did steal the money and “wanted to try to make amends for the theft, then she would have to admit she was wrong and provide a sworn written statement to explain how everything happened,” according to the application.
“I told her that the BOE doesn’t need a financial scandal like this. Especially when people in high school would find this embarrassing. Pascarelli agreed by saying, ‘Yes it is, but I am telling you I did not have anything to do with any of that.’ I replied, ‘Joanne, we know you did.’ At that point, her attorney … said, Joanne I think you stated your case, I don’t think you should continue.”
The interview ended there, though on April 3 Wilson returned to police headquarters with an iPad belonging to NCHS, saying she didn’t realize she had it and didn’t want to be accused of stealing it, according to Casey’s affidavit.
“While speaking with Wilson in the lobby, she seemed very upset and I asked if she was OK. She stated that she can’t sleep at night because she is so worried that I am going to knock on her door and arrest her. She said it has really been bothering her. Wilson became even more upset. I told her if she wanted to get something off her chest we could sit down and talk. Wilson said she wasn’t sure if she wanted to do that. We spoke for a bit longer and ultimately she decided to sit down with me and explain what really happened.”
According to the arrest warrant application, Wilson then changed her story to say that another individual since 2006 would demand $100 every day from the registers after lunch was over, telling Wilson that it was petty cash or similar uses. If ever there was more money in a drawer at the end of lunch, those funds similarly would be designated for random uses, Wilson said, such as purchasing supplies.
Wilson said that she was “pissed” at the man “when he bought an expensive camera that he said he bought for the food service area but she never saw it again,” the affidavit said.
Later, when pressed to explain how a missing $100 per day still would leave the discrepancy in funds about $200 short on a daily basis, Wilson started to cry, the affidavit said. She denied wrongdoing.
Police did investigate the accusation from Wilson, connecting in April with the man’s attorney, who stated that his client did not handle cash at all while employed at the schools. Through a different attorney, the man eventually returned an iPhone and iPad that belonged to the schools (though they had been wiped clean).
Wilson would return to NCPD for a final interview in May, where she again denied wrongdoing and declined to take a lie detector test.
“I don’t believe in those things,” she told police, according to Casey’s affidavit.
Judge John Blawie of state Superior Court in Stamford signed arrest warrants for Wilson and Pascarelli on Aug. 10.
During the Board of Ed meeting, Keating noted that when she started in her role three years ago, one year after Luizzi himself took on the superintendent’s role, she studied past audits and reviewed the district’s financial systems and internal controls. Keating herself brought in Haberman as budget director for the schools and the team began studying “areas we needed to look at,” including cash reconciliation in food services.
Keating pushed, with Luizzi’s support, for an external audit that would identify the cash reconciliation as a “significant deficiency” in its management letter—that’s one step below a “material weakness,” as it allowed for a possibility of fraud. Haberman, who had experience in schools and food services specifically, put a “paper system” in place that would create a trail for cash, and trained staff, and then oversaw the implementation of the new “blind close” POS system. A number of policies were updated following the external audit, including food services processes, Keating said. District officials gathered data from past years regarding cash intake and then, in April 2017, the district conducted its own internal audit of food services at NCHS.
“When we started to do that we found that somehow the cash was not what it should have been,” Keating said. “So that is a flag for us.”
On Nov. 7, 2017, Keating said, two cafeteria workers at Saxe got into a disagreement and the following day, Keating herself met with them and handed out her own business card, urging them to contact her if they wanted to talk. One week later, a cafeteria worker contacted her and they met Nov. 15.
“She described a number of things happening in the cafeteria,” Keating said, and “the most significant” information she detailed had to do with “highly questionable cash handling procedures” at Saxe that were attributed to Pascarelli. That eventually led to Pascarelli’s dismissal and the police contact.
Board of Ed member Penny Rashin commended Keating for her diligence in the job and for “creating the correct atmosphere of trust” so that an employee felt comfortable coming forward.
Outstanding reporting Michael. This passage caught my attention:
“when the school board decided to look into how their employees handle cash after a different, unrelated incident had occurred.” (That incident goes unspecified in the application.)
This seems to imply that there was a previous irregularity with cash collections that did not become public knowledge.