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HomeMy WebLinkAbout1351 KoserIn Re: Gary Koser File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Daneen E. Reese Donald M. McCurdy Michael Healey Raquel K. Bergen 03 -004 Order No. 1351 11/29/04 12/8/04 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Act, Act 9 of 1989, P.L. 26, 65 P.S. § 401 et seq., as codified by Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq., by the above -named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegation(s). Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was filed and a hearing was waived. The record is complete. A Consent Agreement and Stipulation of Findings were submitted by the parties to the Commission for consideration. The Stipulation of Findings is quoted as the Findings in this Order. The Consent Agreement was subsequently approved. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under Act 93 of 1998. This adjudication of the State Ethics Commission is issued under Act 93 of 1998 and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with Chapter 11 of Act 93 of 1998. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Koser, 03 -004 Page 2 I. ALLEGATIONS: That Gary Koser, a (public official /public employee) in his capacity as the Business Manager for the Penn Hills School District, Allegheny County, violated the Section 1103(a) of the Public Official and Employee Ethics Law (65 Pa.C.S. § 1101 et seq.) when he used the authority of his office for the private pecuniary gain of himself, including but not limited to using school district equipment for personal use; and when he authorized payments to himself for expenses not related to his position with the school district or which were personal in nature. II. FINDINGS: 1. Gary Koser was employed by the Penn Hills School District (PHSD) as the Business Manager from April 15, 1986, through April 1, 2003. a. Koser held the position of Board Secretary in conjunction with his position as Business Manager. b. Koser was also appointed PHSD tax collector during the period from 1991 to 2002. c. Koser's employment was confirmed in employment contracts with the district dated May 1, 1989, July 8, 1996, and August 4, 1998. 2. Koser was on administrative leave from the PHSD from October 2002 through April 1, 2003. a. Koser was terminated from his position by the board of directors effective April 1, 2003. 3. In his capacity as Business Manager, Koser was responsible for Plant Services including the maintenance and transportation departments. 4. Koser used his position as business manager to initiate equipment purchases for use by the maintenance department of the PHSD which he then used for personal purposes. 5. In or about October 2002 [sic] Koser initiated the purchase of a Bobcat loader by the school district. 6. At the October 12, 1999, meeting, the Board approved the purchase of a Bobcat loader from Bobcat of Pittsburgh. a. The purchase was approved based on Koser's recommendation. b. The board was not considering or in need of such equipment at that time. 7 On November 19, 1999, Koser signed District Purchase Order No. 91521 in the amount of $25,725.00 for a 773 Loader, with cab, auger, sweeper, and blower to be purchased from Bobcat of Pittsburgh. a. The sale was handled through the Bobcat Cranberry Township branch. b. The machine was described as a 773 Bobcat loader equipped with standard equipment, front auxiliary hydraulics, operating lights, advanced hand controls, deluxe cab enclosure kit with heater, set of heavy -duty float tires, backup alarm, attachment control kit, 68" construction industrial bucket Koser, 03 -004 Page 3 without teeth and a tooth bar. c. The Bobcat was delivered to the district on or about November 19, 1999. 1. The Bobcat loader was assigned ID #4699S by the manufacturer. 8. On the afternoon of Wednesday, December 29, 1999, Koser removed the recently purchased bobcat from the maintenance garage at the Lincoln Middle maintenance garage and transported it to his residence at 4 Glen Cove Drive, Greensburg, PA 15601. a. Koser used a trailer owned by the PHSD to haul the bobcat. b. Koser used his personal van to pull the trailer. c. The distance from Linton Middle School to Koser's residence was 24.5 miles each way. 9. At the time of initiating the Bobcat purchase Koser was building a new home and in need of equipment for landscaping and /or moving stone around the property. 10. The bobcat had not been used for any school district purposes prior to December 1999 when Koser used the bobcat for his personal purposes. 11. While using the bobcat for personal purposes, Koser damaged the equipment necessitating repairs. 12. On Thursday, December 30, 1999, Bobcat of Pittsburgh, Youngwood, PA branch picked up the bobcat from Koser's residence for repair. a. Koser had contacted the Bobcat of Pittsburgh branch closest to his residence. b. Bobcat did not repair equipment in the field. c. The bobcat was picked up between 1:00 p.m. and 2:15 p.m. 13. Bobcat of Pittsburgh Work Order Invoice No. 00718127, dated January 11, 2000, reflected labor and parts for repairs to the vehicle, ID #4699S, as follows: Travel Labor $185.60 Shop Labor $249.00 2.5 Fluid — PM99D (1) $ 13.13 Quad Ring (2 @ $1.25) $ 2.50 Lip Seal (2 @7.05) $ 14.10 Actuator (1) $278.92 Mileage — Delivery (61 @ .90) $ 54.90 Mileage — Pickup (17 @ .90) $ 15.30 Total $913.45 a. The repair costs were charged against the vehicle warranty. b. The district did not incur any costs for the repairs made to the vehicle. 14. The bobcat was returned to the district by Bobcat of Pittsburgh on January 5, 2000, between 9:45 a.m. and 11:20 a.m. 15. The district maintenance staff was without the use of the bobcat for five days Koser, 03 -004 Page 4 (December 29, 1999, to January 5, 2000) as a result of Koser removing the bobcat to his residence, and the time it took for it to be repaired. 16. Area businesses provide rentals of Bobcat loaders at prices ranging from $175.00 to $200.00 per day. a. Industrial Warehouse Supply, 1710 Douglas Drive, Pittsburgh, PA charges $175.00 per day plus a $50.00 round trip delivery fee. 1. The cost of an eight -day rental from Industrial Warehouse Supply would have been $1,450.00 ($175.00 /day X 8 days + $50.00 delivery). b. Bobcat of Pittsburgh, 20620 Route 19 North, Cranberry Township, PA charges $200.00 per day. 1. The cost of an eight -day rental from Bobcat of Pittsburgh would have been $1,600.00 ($200.00 /day X 8 days). 17. PHSD policies prohibit the removal of district equipment for any personal use by staff or students. 18. Penn Hills School District Policy #708, Lending of School Owned Equipment and Books, relates to the use of instructional and non - instructional equipment and books, and specifically states that removal of school equipment from school property for personal use by staff or students is prohibited. 19. Koser received a private pecuniary gain of at least $1,450.00 (8 days @ $175.00 plus $50 delivery) when he used his position as business manager to remove a district owned Bobcat loader from PHSD property for use at his personal residence. The following findings relate to the allegation that Koser authorized payments to himself not related to his position 20. Koser served as the appointed tax collector for the PHSD between 1991 and 2002. a. The district in -house tax office was formed in or around July 1991. b. A tax office supervisor, a subordinate to Koser, ran the day -to -day operation of the office. 21. The PHSD established a $10.00 fee for tax certifications. a. The fees were the responsibility of Koser as tax collector. 22. Koser opened a district account at PNC Bank on July 30, 1993, titled the Penn Hills School District Tax Certification Account ( #902186). a. No board action approving the account opening is noted in the meeting minutes of the PHSD. b. Koser determined that he would have signature authority for this account. 1. The Assistant Business Manager and school board president were also given signature authority by Koser. 23. The Tax Certification Account (902186) was funded solely from the collection of tax certification fees received by the district tax office. Koser, 03 -004 Page 5 24. The tax certification fees received by the district were forwarded to Koser's office and subsequently deposited into the Tax Certification Account by Sandy Arrigo, Koser's secretary. a. Arrigo made copies of the checks and payments she received from the tax office. 1. The majority of the fees were paid by check. b. Arrigo deposited the fees and balanced the account. c. Arrigo did not have signature authority on the account and did not maintain the checkbook. 25. Koser maintained sole control of disbursements from the Tax Certification Account. a. Koser maintained the checkbook in his desk. b. Koser handwrote the checks. c. Koser maintained receipts for some payments issued from the account. d. Koser maintained a handwritten ledger of receipts and expenditures. 26. Disbursements made from the tax certification account were not submitted for board approval by Koser. a. Disbursements were not included with bill lists provided to the board for review and approval. 27. Checks issued from the Tax Certification Account contained a facsimile stamp of the signatures of Koser, the Assistant Business Manager Bruce Dakan, and the board president. a. The facsimile stamps were maintained in a vault which Koser had controlled. 28. Dakan and the board president were not consulted by Koser when the signature stamp was used. a. Koser did not advise either when disbursements were made from the account. b. Koser never sought or obtained approval from the board when making expenditures from this account. 29. Koser transferred funds from the Tax Certification Account to the PHSD General Fund by issuing a check payable to the Penn Hills School District General Fund. a. Transfers were made one to three times per year. b. Transfer amounts ranged from $3,800.00 to $10,000.00 per check. 30. Koser used the Tax Certification Account as a Petty Cash fund to make payments for the following including but not limited to: magazine subscriptions; supplies; gifts; deposits for retirement dinners; and food for various types of meetings, including board meetings. Koser, 03 -004 Page 6 31. Koser also issued payments to himself for various items including: food; fundraiser tickets; supplies; mileage, parking and travel related expenses. 32. PHSD policy requires itemization with receipts for any reimbursements for expenses incurred by district employees. 33. District Policy #331, Job Related Expenses, addresses reimbursement of actual and necessary expenses, including travel expenses, of administrators, that are incurred in the course of performing services for the district. a. Validity of payments for job related expenses was to be determined by the superintendent. b. Use of a personal vehicle for approved purposes was reimbursable at the mileage rate approved by the board. c. Procedures for reimbursement of travel expenses, as prepared by the business manager shall include (in part): "In all instances of travel and job related expense reimbursement, full itemization with receipts attached shall be required within 60 days of occurred expenses." 34. The District utilized a "Request for Reimbursement for: Intradistrict Travel" form to record local mileage and /or other expenses incurred. a. The employee's signature, as well as the approvals of the employee's supervisor, department director, and business manager were required. b. Receipts for other expenses were required. 35. Koser never submitted request for reimbursement forms when authorizing payments to himself from the tax certification account. a. Koser never submitted job related expenses to the superintendent for approval. 36. Deposits into the tax certification account #902186 between July 1993 and January 2003 totaled $103,214.87. a. Of that amount, $85,600.00 was transferred to the PHSD General Fund. b. The account was closed on February 12, 2003, with a balance of $11,498.91. 1. The last check was issued from the account on September 6, 2002. 37. Between July 1993 and January 2003, $17,614.88 in payments for various items were made from Account No. 1902186. a. Of that amount, payments totaling $3,402.41 were issued to Koser. b. None of the payments were approved by the superintendent. c. Koser signed checks issued to himself. 38. Between January 1998 and October 2002, Koser issued reimbursements to himself in the amount of $2,295.81. Koser, 03 -004 Page 7 39. Koser did not have the approval of either the board of directors or the superintendent to issue the above listed payments to himself. a. Koser, as a Business Manager, was aware of district policies relating to approval for reimbursement for mileage and job related expenses. 40. Since the filing of the Investigative Complaint, Koser has produced receipts to substantiate some of the amounts reimbursed to himself. 41. Koser realized a private pecuniary gain of approximately $550.00 when he issued unauthorized payments to himself between January 1998 and October 2002. 42. Koser was terminated as business manager for the PHSD on April 1, 2003. a. Koser's termination was based on a statement of charges presented to the board by the district solicitor. b. The charges were the result of an investigation of a number of issues relating to Koser's conduct as business manager which included his use of the tax certification account to issue payments to himself. 43. Koser realized a private pecuniary gain of $3,620.81 [sic] when he used the school district bobcat for personal use and authorized payments to himself from a school district account. Bobcat Rental: Unauthorized Payment: Total: $1,450.00 $ 550.00 $2,000.00 III. DISCUSSION: From April 15, 1986, through April 1, 2003, Respondent Gary Koser (also referred to herein as "Respondent" or "Koser ") served as the Penn Hills School District (PHSD) Business Manager. In that capacity, Koser was, at all times relevant to this case, a public official /public employee subject to the provisions of the Public Official and Employee Ethics Law, Act 9 of 1989, Pamphlet Law 26, 65 P.S. § 401, et seq., as codified by the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq., which Acts are referred to herein as the "Ethics Act." The allegations are that Koser as PHSD Business Manager violated Section 1103(a) of the Ethics Act when he used the authority of his office for the private pecuniary gain of himself, including but not limited to using school district equipment for personal use; and when he authorized payments to himself for expenses not related to his position with the school district which were personal in nature. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). Koser, 03 -004 Page 8 § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. 65 Pa. C. S. § 1102. Section 3(a)/1103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are reproduced above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. As PHSD Business Manager, Koser was responsible for Plant Services including the maintenance and transportation departments. In his capacity as PHSD Business Manager, Koser initiated the purchase of a Bobcat loader by the school district. At the time, the PHSD Board was not considering or in need of such equipment. However, based upon Koser's recommendation, the PHSD Board approved the purchase at its October 12, 1999, meeting. On November 19, 1999, Koser signed District Purchase Order No. 91521 in the amount of $25,725.00 for the purchase of the Bobcat. The Bobcat was delivered to the district on or about November 19, 1999. PHSD policies prohibit the removal of district equipment for any personal use by staff or students. However, on December 29, 1999, Koser removed the Bobcat from a PHSD maintenance garage and transported it to his residence 24.5 miles away. Koser transported the Bobcat using his personal van and a trailer owned by the PHSD. While using the PHSD Bobcat for personal purposes, Koser damaged the equipment, resulting in transportation and repair charges totaling $913.45 as set forth in Finding 13. These costs were charged against the vehicle warranty, such that the district did not incur the costs. The Bobcat was returned to the district on January 5, 2000. The district maintenance staff was without the use of the Bobcat for five days (December 29, 1999, to January 5, 2000) as a result of Koser's actions. Based upon rates charged by area businesses for rentals of Bobcat loaders, the parties have stipulated that Koser received a private pecuniary gain of at least $1,450.00 (8 days @ $175.00 plus $50 delivery) when he used his position as PHSD Business Manager to remove a district owned Bobcat loader from PHSD property for use at his personal residence. Koser, 03 -004 Page 9 While serving as PHSD Business Manager, Koser was appointed PHSD tax collector during the period from 1991 to 2002. Koser was responsible for the $10.00 tax certification fees collected by the school district tax office. On July 30, 1993, without authorization by the PHSD Board, Koser opened an account at PNC Bank titled the "Penn Hills School District Tax Certification Account," which account was funded solely with tax certification fees received by the district tax office. Koser determined that he, the PHSD Assistant Business Manager, and the PHSD Board president would have signature authority for this account. However, Koser maintained sole control of disbursements from the account. Checks issued from the Tax Certification Account contained facsimile stamped signatures of Koser, the Assistant Business Manager, and the PHSD Board president. The facsimile stamps were maintained in a vault that Koser controlled. The Assistant Business Manager and the PHSD Board president were neither advised nor consulted by Koser when the signature stamps were used. Likewise, Koser never sought or obtained approval from the PHSD Board when making expenditures from the account, and the disbursements that he made were not included with bill lists provided to the PHSD Board for review and approval. Koser issued payments to himself from the Tax Certification Account for various items including: food; fundraiser tickets; supplies; mileage, parking and travel related expenses. As PHSD Business Manager, Koser was aware of district policies that PHSD employees were required to observe when seeking reimbursements for their job - related expenses. Specifically, PHSD employees were required to use a particular expense reimbursement form and to itemize and produce receipts for such expenses. The PHSD superintendent was to determine the validity of payments for job-related expenses. Koser did not observe these district policies when issuing payments to himself from the Tax Certification Account. Koser never submitted the PHSD reimbursement forms when authorizing payments to himself from the Tax Certification Account, nor did he submit his job related expenses to the superintendent for approval. Although some of the amounts Koser paid to himself from the Tax Certification Account have since been substantiated, the parties have stipulated that Koser realized a private pecuniary gain of approximately $550.00 when he issued unauthorized payments to himself from the Tax Certification Account between January 1998 and October 2002. In sum, the parties have stipulated that Koser realized: (1) a private pecuniary gain in the amount of $1,450.00 when he used the school district Bobcat for personal use; and (2) a private pecuniary gain of approximately $550.00 when he issued unauthorized payments to himself from a school district account between January 1998 and October 2002. Having highlighted the Stipulated Findings and issues before us, we shall now apply the Ethics Act to determine the proper disposition of this case. The parties' Consent Agreement sets forth a proposed resolution of the allegations. The Consent Agreement proposes that this Commission find as follows: (1) That a violation of Section 1103(a) occurred when Koser used school district equipment, specifically a Bobcat, for his personal use. (2) That a violation of Section 1103(a) occurred when Koser authorized payments to himself from the tax account, with the acknowledgement that some of the funds withdrawn were for actual expenses incurred by Koser. As part of the Consent Agreement, Koser has agreed to make payment in the amount of $2,000.00 in settlement of this matter, with said amount to be payable to the Penn Hills School District and forwarded to this Commission within thirty (30) days of the issuance of the final adjudication in this matter. Koser, 03 -004 Page 10 In considering the Consent Agreement, it is clear that the elements for the recommended violations of Section 3(a)/1103(a) of the Ethics Act have been established. With regard to the PHSD Bobcat, Koser used the authority of his position as PHSD Business Manager when he recommended the purchase of the Bobcat by the school district, signed the purchase order for the Bobcat, removed the Bobcat from PHSD property, and transported the Bobcat to his residence using a PHSD trailer. As PHSD Business Manager, Koser was responsible for PHSD Plant Services including the maintenance and transportation departments. But for being the PHSD Business Manager, Koser would not have been in a position to take these actions. The parties have stipulated that the resulting private pecuniary benefit to Koser was at least $1,450.00. With each element of a Section 1103(a) violation having been established, we conclude that a violation of Section 1103(a) of the Ethics Act occurred when Koser used school district equipment, specifically a Bobcat, for his personal use. (See, Cagno, Order 1204 at 28, and Orders cited therein). With regard to Koser's issuance of payments to himself from the Tax Certification Account, it is clear that as part of his official duties, Koser was responsible for the tax certification fees received by the school district tax office. Koser used the authority of his public position when he issued funds to himself from that account. Koser disbursed such funds from the account without review or approval by anyone else, including the PHSD Board or superintendent. Based upon the Consent Agreement and Stipulation of Findings, it is acknowledged that some of the funds withdrawn by Koser from the account were for actual expenses incurred by Koser. The portion of the withdrawn funds that was used to pay /reimburse Koser's proper, actual expenses was not a private pecuniary benefit. See, Moore, Opinion 04 -004. However, the parties have stipulated that Koser realized a private pecuniary gain of approximately $550.00 when he issued unauthorized payments to himself from the Tax Certification Account between January 1998 and October 2002. With each element of a Section 3(a)/1103(a) violation having been established, we conclude that a violation of Section 3(a)/1103(a) of the Ethics Act occurred when Koser authorized payments to himself from the PHSD Tax Certification Account, with the private pecuniary benefit consisting of funds other than those that were withdrawn for proper, actual expenses incurred by Koser. (Cf., Gulnac, Order 1135). We determine that the Consent Agreement submitted by the parties sets forth the proper disposition for this case, based upon our review as reflected in the above analysis and the totality of the facts and circumstances. Accordingly, Koser is directed to pay $2,000 to the Penn Hills School District through this Commission within 30 days of the mailing date of this Order. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. As Business Manager for the Penn Hills School District (PHSD), Allegheny County, Respondent Gary Koser ( "Koser ") was at all times relevant to this case a public official /public employee subject to the Ethics Act. 2. Koser violated Section 1103(a) of the Ethics Act when he used PHSD equipment, specifically a Bobcat, for his personal use. 3. Koser violated Section 3(a)/1103(a) of the Ethics Act when he authorized payments to himself from the PHSD Tax Certification Account, with the private pecuniary benefit consisting of funds other than those that were withdrawn for proper, actual expenses incurred by Koser. In Re: Gary Koser ORDER NO. 1351 File Docket: 03 -004 Date Decided: 11/29/04 Date Mailed: 12/8/04 1 Respondent Gary Koser ( "Koser ") violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when as Business Manager for the Penn Hills School District (PHSD), Allegheny County, he used PHSD equipment, specifically a Bobcat, for his personal use. 2. Koser violated Section 3(a)/1103(a) of the Ethics Act, 65 P.S. §403(a)/65 Pa.C.S. § 1103(a), when he authorized payments to himself from the PHSD Tax Certification Account, with the private pecuniary benefit consisting of funds other than those that were withdrawn for proper, actual expenses incurred by Koser. 3. Per the Consent Agreement of the parties, Koser is directed to pay $2,000.00 to the Penn Hills School District through this Commission within 30 days of the mailing date of this Order. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, Louis W. Fryman, Chair