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HomeMy WebLinkAbout1354 CobbIn Re: Paul Cobb File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Daneen E. Reese Donald M. McCurdy Paul M. Henry Raquel K. Bergen 04 -003 Order No. 1354 2/28/05 3/1/05 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 ( "Ethics Act "), 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 not filed and a hearing was deemed waived. The record is complete. This adjudication of the State Ethics Commission is issued under the Ethics Act 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 the Ethics Act. 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. Cobb, 04 -003 Page 2 I. ALLEGATIONS: That Paul Cobb, a (public official /public employee) in his capacity as Business Manager for the North Pocono School District violated the following provisions of the State Ethics Act (Act 93 of 1998) when he used the authority of his position for a private pecuniary gain, including but not limited to utilizing school district account to purchase a computer and related equipment which was used for personal purposes, and utilizing a school district credit card to make purchases of a personal nature and failing to reimburse the district for the purchases; and when he utilized school district equipment, including but not limited to, a computer and monitor for his private personal 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). § 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. II. FINDINGS: 1. The Investigative Division of the State Ethics Commission received a signed, sworn complaint alleging that Paul Cobb violated provisions of the State Ethics Act (Act 93 of 1998). 2. Upon review of the complaint the Investigative Division initiated a preliminary inquiry on January 12, 2004. 3. The preliminary inquiry was completed within sixty days. 4. On March 9, 2004, a letter was forwarded to Paul Cobb, by the Investigative Division of the State Ethics Commission informing him that a complaint against him was received by the Investigative Division and that a full investigation was being commenced. a. Said letter was forwarded by certified mail, no. 7002 3150 0000 6075 3191. b. The domestic return receipt bore the signature of Paul Cobb, with a delivery date of March 12, 2004. Cobb, 04 -003 Page 3 5. On April 22, 2004, the Investigative Division of the State Ethics Commission filed an application for a ninety day extension of time to complete the investigation. 6. The Commission issued an order on June 8, 2004, granting the ninety day extension. 7 On November 8, 2004, the Investigative Division of the State Ethics Commission filed an application for a ninety day extension of time to complete the investigation. 8. The Commission issued an order on November 29, 2004, granting the ninety day extension. 9. On December 21, 2004, a letter was forwarded to Paul Cobb through his attorney, advising that the allegations listed in the notice letter of March 9, 2004, were being amended. a. Said letter was forwarded by certified mail, no. 7004 2510 0003 5004 0672. 10. Periodic notice letters were forwarded to Paul Cobb in accordance with the provisions of the Ethics Law advising him of the general status of the investigation. 11. The Investigative Complaint was mailed to the Respondent on January 3, 2005. 12. Paul Cobb was employed as Business Manager by the North Pocono School District (NPSD), Moscow, PA from November 1999 until April 2004. a. Cobb was suspended from his job at NPSD on April 2, 2004. 13. Cobb's duties and responsibilities as NPSD Business Manager are outlined in ajob description as follows: Job Goal: To administer the business affairs of the district in such a way as to provide the best possible educational services with the financial resources available. To insure the school district derives maximum educational dividends from the expenditures of every school dollar. Performance Responsibilities: 1. Assumes responsibility for budget development and long -range financial planning. 2. Establishes and supervises a program of accounting and reporting for the financial affairs of the district. 3. Works with the Superintendent in the preparation of the budget. 4. Advises the Superintendent of business and financial questions and performs additional duties as required. 5. Prepares financial statements as required by State and Federal agencies. 6. Acts as the budget control officer and prepares monthly reports to proper staff officials concerning the status of their budgetary accounts and to guard against the overspending of any budgeted account. 7 Provides monthly accounting of all income and expenditures and submits a Cobb, 04 -003 Page 4 monthly statement to the Board detailing the status of each item. 8. Develops and administers a program for purchasing supplies and equipment. 9. Prepares all bidding documents for equipment and supplies including notice to bidders, instruction to bidders, specifications and form of proposal. 10. Assumes responsibility for correspondence relating to school district purchasing activities. 11. Acts as payroll officer. 12. Manages the district's insurance program. 13. Maintains an up -to -date inventory of school property. 14. Completes Pupil Transportation contracts and other transportation reports as mandated by the Department of Education. 15. Works with the depository and /or trustee in insuring the maximum return on the district's investments. 16. Supervises the district's Receiving Department and procedures. 17. Is responsible for the district's accounts payables and preparation of related monthly reports. 18. Oversees district Tax Collectors and outlines collection procedures and controls. 14. Cobb also has signature authority for school district accounts. 15. In his position as Business Manager, Cobb reported directly to the District Superintendent. 16. The position of Business Manager for the NPSD is compensated under Act 93 - Business Manager Compensation Plan pursuant to the Public School Code of 1949, as amended, Section 1164. a. Paul Cobb received compensation and benefits pursuant to this plan. 17. The NPSD Act 93 - Business Manager Compensation Plan pertaining to Paul Cobb effective July 1, 2001, through June 30, 2005, contained, in part, the following: a. Compensation Increase for Year Ending Current Salary 2002 2003 2004 2005 $66,750 $3,500 $3,500 $3,250 3,250 b. Work Year The North Pocono administrative staff will serve on a twelve (12) month contract from July 1 to June 30. 18. In his capacity as Business Manager Cobb served as the Board Secretary for an additional salary of $3,500 per year. Cobb, 04 -003 Page 5 19. The NPSD's purchasing policy requires employees to submit a Requisition Form for approval by the business manager for items to be purchased using district funds. a. Upon approval, the item to be purchased is assigned a Purchase Order No. from the NPSD Purchase Order Log. b. The Purchase Order Log identifies the company name, employee making the requisition, and the date. c. The Purchase Order log is maintained by Cobb's confidential secretary. d. The confidential secretary assigned purchase order numbers. 20. NPSD has in its inventory numerous pieces of computer equipment purchased from Dell Computer Company, Inc. a. The equipment is assigned to teaching, clerical and administrative employees throughout the NPSD. 21. The NPSD maintains computer inventory records containing the following: a. Description of equipment. b. Date of acquisition. c. Cost. d. Location of equipment. e. Person to whom equipment is assigned. 22. NPSD employs both a Technology Coordinator and Assistant Technology Coordinator. a. The function of this department, in part, is as follows: 1. Maintain NPSD computer equipment. 2. Maintain NPSD computer inventory purchase /assignment logs. 3. Review and approve computer equipment purchases for the NPSD. 23. Employees wanting to purchase computer and related equipment or audio visual equipment submit a New Equipment Request form for review by the Technology Coordinator or his assistant. a. The form is reviewed for technical aspects, compatibility, etc. b. The purchase price is not approved by Technology Coordinator. 1. The purchase price is subject to review by the business manager. 24. Dell Computer Company, Inc. has a special purchase program available to school district employees. a. NPSD participates in this employee purchase program. Cobb, 04 -003 Page 6 b. Computers and related equipment can be purchased at a discounted price from retail. c. The equipment can be ordered via telephone or online. d. The employee must pay using personal funds (credit card or check). e. The equipment is not to be billed to the school district. 25. On August 23, 2001, Cobb ordered from Dell Computer Co. the following computer equipment: a. One (1) Dell Inspiron 4000, Pentium 111 computer (laptop) with related software packages. b. The total cost was $1,900.00. 26. The Dell invoice ( #633825013), in addition to describing the computer and related software, contains the following information: a. Customer #004177734. b. Purchase Order #37757 c. Sold to: NPSD, 701 Church Street, Moscow, PA 18444 d. Ship to: Paul J. Cobb, NPSD, 701 Church Street, Moscow, PA 18444 27. Purchase Order No. 37757 identified in the NPSD Purchase Order Log is assigned to Roto Rooter - W. Bell - 8/22/01. a. W. Bell is a NPSD maintenance employee. b. Purchase Order #37757 makes no reference to the computer ordered by Cobb. 28. No valid NPSD Purchase Order No. was ever assigned to Dell Invoice #633825013. 29. No NPSD employee other than Paul Cobb was involved with the Computer purchased from Dell to Invoice #633825013. a. No NPSD employee provided Dell with P.O. #37757. 30. There is no NPSD New Equipment Request Form contained in the NPSD files indicating the computer purchased by Cobb was approved by either the NPSD Technology Coordinator and /or his assistant. a. Cobb did not submit such a request to the technology department. 31. Dell Invoice #633825013 includes a NPSD cost code billing account number of 10- 0155. a. The cost code number identifies that the cost of the item is to be reimbursed to the NPSD by the person making the purchase. b. Handwritten on the invoice is: Reimbursement Paul. Cobb, 04 -003 Page 7 1. Paul references to Paul Cobb. c. The handwritten note indicates that Cobb is to reimburse the school district. 32. NPSD General Fund Check #00046122, dated 12/20/2001, was issued payable to Dell Marketing /Computer Corporation in the amount of $1,900.00 as payment for the laptop ordered by Cobb. a. The aforementioned check was for payment of Dell Invoice #633825013. b. Paul Cobb's signature is one of three NPSD officials signing the check authorizing payment. 33. The NPSD General Fund expenditure card pertaining to Dell Invoice #633825013, contained the following information: a. Business Manager approval - initials PC signifying Paul Cobb's approval. b. P.O. No. - blank. c. Cost Code - 100155 d. Amount - $1,900.00 e. Total - $1,900.00 34. Cobb did not make any reimbursement to the school district for the computer at anytime prior to March 2003. a. The computer was utilized by Cobb for personal purposes between August 2001 and March 2003. b. Reimbursements are to be made to the school district at the time of receipt of the items. 35. The NPSD conducts a yearly audit of the financial status of the District. a. The audit is conducted by an independent certified public accounting firm contracted with by the District. b. The NPSD Business Manager assembles (or causes to be assembled) the District's financial records to be audited. c. Paul Cobb during his tenure as Business Manager for NPSD performed this function. 36. The NPSD YTD General Ledger Transaction Report Form 7/1/01 to 6/30/02, Code #10 -0155 (Accounts Receivable) contains the following entry related to the purchase of the computer by Cobb: a. Date - 12/20/2001 b. Trans No. - C5300017 c. Vendor - Dell d. PO - Blank Cobb, 04 -003 Page 8 e. Invoice - 633825013 d. Check No. - 00046122 e. Description - General Fund f. Debit - $1,900.00 g. Credit - 0 h. Balance - $1,900.00 37. The aforementioned Ledger Transaction Report was provided to the Auditors by the NPSD Business Manager. a. Paul Cobb, at the time, was the NPSD Business Manager. b. Cobb did not disclose to the auditors that this was his personal purchase that required reimbursement to the NPSD. 38. At the time of the Fiscal Year 2001 Audit, Paul Cobb acting as NPSD Business Manager, transferred the aforementioned General Ledger Transaction Report entry to Account Code #1100 -610 on the NPSD Function 155 Form. a. Cobb provided this form to the Auditors. b. Account Code #1100 -610 is the NPSD Instruction and Supplies Account. c. Cobb's actions created the impression that the laptop was being used for NPSD purposes. 39. Cobb's use of his public position moved the $1,900.00 from the Accounts Receivable (money owed by Cobb) to a legitimate NPSD expense. a. No reimbursement was ever made by Cobb to the NPSD prior to March 2003. 40. Cobb's use of the authority of his public position to purchase the computer and his subsequent transferring the purchase to a NPSD expense resulted in a private pecuniary gain of $1,900. (The following findings relate to the allegation that Paul Cobb utilized a district credit card for personal use) 41. The NPSD maintains a Staples Office Supply credit card for purchases of school related supplies. a. The NPSD has had the credit card since 1996. 42. The credit card was under the direct control of the NPSD Business Manager. a. Paul Cobb was NPSD Business Manager from November 1999 thru [sic] April 2004. 43. On October 19, 2002, Cobb approved a NPSD Requisition Form for items to be purchased at Staples. Cobb, 04 -003 Page 9 a. The requisitioner line is unsigned. b. The NPSD Budget Code /Cross Reference Code assigned to the form is 2510610001. 44. The items purchased on Staples Invoice #60670, and cost is as follows: NEC 15" LCD Monitor $ 329.98 NEC 17" LCD Flat Monitor $ 649.98 Cordless Navigator $ 79.98 CD /DVD Stomp Matte $ 11.99 Quicken 2003 Premium Program $ 89.95 Slim Jewel Case $ 7.98 100 Pack Spindle of CD $ 39.98 Total $1,209.84 45. There is no NPSD Purchase Order Number assigned to the Requisition Form or the NPSD General Fund Ledger Card. a. The NPSD Purchase Order Log contains no references to the afore- mentioned purchases. b. Standard NPSD purchasing procedures required that a purchase order be obtained. 46. On 1/15/2003, NPSD General Fund Check, No. 00049263, in the amount of $1,322.60 was issued to Staples Direct, P.O. Box 9020, Des Moines, IA. a. The check is for four (4) Staples Invoices, including Invoice No. 60670 in the amount of $1,209.84. b. Paul J. Cobb is one of the authorized signatures signing NPSD check no. 00049263. 47. The items purchase [sic] on Staples Invoice #60670 were made by Paul Cobb and not utilized for any NPSD purposes. a. Cobb did not reimburse the NPSD at the time the purchases were made. b. Cobb realized a private pecuniary gain of $1,209.84 when he used the NPSD Staples credit card to purchase supplies used for private purposes. (The following findings relate to the allegation that Paul Cobb used NPSD equipment for his personal interests.) 48. NPSD has no policy permitting employees to utilize school district equipment outside NPSD facilities. 49. In or about September 2002, Cobb moved a NPSD Dell Dimension 4100 Desktop Computer (Serial #3EB4L) from the NPSD to his home. a. Cobb advised the NPSD Assistant Technology Coordinator that he was taking the computer home so he could work on the budget and other NPSD items. b. Cobb retained the computer until approximately June 2003. Cobb, 04 -003 Page 10 c. The computer was purchased on April 19, 2000, by the NPSD at a cost of $2,482.00. 50. Paul Cobb did not submit an Equipment Assignment form prior to removing the computer Serial #3EB4L and taking it to his home. 51. The items purchased from Staples to Invoice #60670 were used by Cobb in the operation of the Dell Computer Serial #3EB4L. 52. Cobb retained use of the computer for personal purposes from about September 2002 until or about June 2003. a. Cobb maintains a part -time tax preparation business. b. The computer, monitor and supplies were used in conjunction with that business. 53. On or about February 24, 2003, the Pennsylvania Department of Auditor General, Office of Special Investigations (DAG -OSI) initiated an investigation of the NPSD. a. A portion of the investigation focused on Cobb's actions as business manager including: 1. The purchase of a computer with NPSD funds. 2. The use of the NPSD Staples credit card for personal purchases. 54. On March 6, 2003, Cobb advised DAG -OSI investigators that NPSD had a policy in which equipment belonging to the District could be used outside the NPSD property through the use of a NPSD Equipment Assignment Form. 55. Prior to meeting with Auditor General Investigators Cobb on March 6, 2003, instructed the NPSD Assistant Technology Coordinator to sign a NPSD Equipment Assignment Form. a. Cobb had completed all information on the form. 56. The NPSD Equipment Assignment Form was created by Cobb on or about March 2003 in response to the inquiries made by the DAG -OSI investigators. a. Cobb's creation of the form gave the appearance that he had permission to use the laptop and that he had the laptop only since March 2003. b. Dell Laptop Computer, serial #TWF90F775- 12800 - 153 -1106 was in the personal possession of Cobb since the August 2001 date of purchase and delivery. 57. Cobb provided the DAG -OSI a copy of the form indicating that on 3/6/03 he signed out a Dell Laptop Computer, Serial #TW90F775- 12800 - 153 -1106. a. The stated purpose was for Cobb to complete budget work. b. The form was approved by the NPSD Assistant Technology Coordinator. 58. The Equipment Assignment form completed by Cobb was not accurate. a. Cobb was in possession of the computer as of August 31, 2001. Cobb, 04 -003 Page 11 b. The computer was not utilized by Cobb for budget work. 59. During the interview on March 6, 2003, Cobb stated to DAG -OSI investigators that the laptop computer was purchased on August 31, 2001. a. Cobb stated that he planned on buying it for personal use, but never did. b. Cobb stated the computer was in NPSD possession since the date of purchase. 1. The computer was not in the possession of the NPSD. 60. On March 7, 2003, Cobb issued a personal check ( #00113) payable to the NPSD in the amount of $2,379.88. 61. Check #00113 drawn on the personal account of Cobb, was reimbursement to the NPSD for the following items previously purchased by Cobb for personal use: a. Dell Inspiron 4000 Pentium III Laptop Computer - $1,900.00 b. Staples Purchases NEC 15" Monitor — 329.98 CD /DVD Stomp Matte — 11.99 Quicken 2003 Premium Program — 89.95 Slim Jewel CD case — 7.98 CD 100 Pack Spindle — 39.98 Total $2,379.88 62. On March 31, 2003, during a second interview, Cobb admitted to DAG -OSI investigators that he was not truthful with them in prior conversations. a. Cobb admitted that he made personal purchases from Dell Computer Company using NPSD funds. b. Cobb admitted that he made personal purchases at Staples using NPSD Staples credit card. c. Cobb admitted that the NPSD computer (Finding 49) taken from his office to his home was used in his personal income tax preparation business. 1. Cobb confirmed that he has approximately 180 clients as part of his tax preparation business. 2. Some of his clients are teachers, principals, and administrators for the NPSD. 63. On April 2, 2003, Cobb issued a personal check ( #5074) payable to the NPSD. a. The check was in the amount of $317.22. b. The payment was for interest (computed at 11%) on the Dell Computer purchased in August 2001. Cobb, 04 -003 Page 12 64. In or about June 2003 Cobb returned to the NPSD the following equipment: a. Dell- Dimension 4100 Desktop Computer (Serial# 3EB4L) b. NEC 17" Flat Screen Monitor c. Cordless Navigator 65. As a result of the Department of the Auditor General investigation NPSD approved Resolution No 1 of 2004 authorizing the hiring of Special Investigator, Scott A. Herlands, Esquire to investigate information and allegations against Paul Cobb, NPSD Business Manager. a. ISSUES: 1. Whether the North Pocono School District Business Manager did, on or about August 23, 2001 and continuing thereafter with malfeasance, knowingly use as his own, possess and exercise unlawful control over North Pocono School District equipment — a Dell Inspiron 4000, Pentium III computer? 2. Whether the North Pocono School District Business Manager did, on or about October 19, 2002 and continuing thereafter with malfeasance, knowingly use a North Pocono School District credit card at Staples to obtain property to use as his own? 66. Herlands' report to the NPSD contained findings of fact and recommendations to each allegation. The findings of fact are as follows: a. ON OR ABOUT AUGUST 23, 2001 AND CONTINUING THEREAFTER, PAUL COBB DID WITH MALFEASANCE, KNOWINGLY USE AS HIS OWN, POSSESS AND EXERCISE UNLAWFUL CONTROL OVER NORTH POCONO SCHOOL DISTRICT EQUIPMENT —A DELL INSPIRON 4000M, PENTIUM III COMPUTER. b. ON OR ABOUT OCTOBER 19, 2002 AND CONTINUING THEREAFTER, PAUL COBB DID, WITH MALFEASANCE USE A NORTH POCONO SCHOOL DISTRICT CREDIT CARD AT STAPLES TO OBTAIN PERSONAL PROPERTY TO USE AS HIS OWN. 67. The recommendations contained in Herlands' report were based on facts and concluded, in part, the following: a. Herlands' recommendation, in part, concluded that Cobb acting as Business Manager for the NPSD utilized District funds and equipment for his own personal use. Further, Cobb in his official capacity moved the monies owed for the Dell Computer ($1,900) from a NPSD account coded as a Reimbursement Account to an Instructional and Supplies Account in an attempt not to pay for this computer. b. Cobb admitted to making personal purchases utilizing the NPSD Staples credit card. c. Cobb made a reimbursement to the NPSD for the cost of the computer and Cobb, 04 -003 Page 13 some of the items purchased at Staples. Also, Cobb returned to NPSD some of the items purchased at Staples indicating they were for official NPSD business. d. The reimbursement came approximately 22 months after the initial purchase and 3 weeks after the start of the DAG -OSI investigation. Cobbs actions are a clear breach of public trust, and as a result thereof, he should be suspended pending a hearing. 68. In December 2003, the Pennsylvania Department of Auditor General issued a Summary Report concerning the audit /investigation of the NPSD. a. The Summary Report concluded as Finding No. 1 that the NPSD business manager used the school district's computer equipment and a credit card for his personal benefit. b. The business manager used NPSD funds and equipment for his own personal benefit and financial gain and asked a subordinate to create a form to give the appearance that there had been proper documentation of the business manager's use of school district equipment at his residence. Initially, the business manager falsely stated to OSI that he did not have NPSD -owned or purchased equipment at his home and that he never used NPSD funds for personal purchases. Less than two weeks later, he admitted that he used school district funds to purchase a $1,900 computer, as well as other merchandise costing approximately $480, and that he used school district equipment in his outside employment. The business manager reimbursed the school district after OSI began its investigation and more than 550 days after the first personal purchase was made. 69. On June 16, 2004, Cobb admitted to an investigator of the Pennsylvania State Ethics Commission (SEC) that the laptop computer he purchased from Dell was not being used in his tax preparation business. a. Cobb confirmed that the computer was being used by his daughter while attending Weidner University. 70. Cobb did not reimburse the NPSD for almost two years after making the initial purchase of the laptop which was used by his daughter while attending college. a.. Cobb reimbursed the NPSD subsequent to the initiation of the audit/ investigation by the DAG -OSI, and only after he was confronted with the facts. 71. Cobb also returned to the NPSD a Dell Dimension 4100 Desktop Computer in the spring of 2003 approximately nine months after he removed the computer from the NPSD. a. The computer was used in Cobb's private tax preparation business and not for school district business. 72. Cobb returned items he purchased at Staples using a NPSD credit card in the spring of 2003 eight months after the purchase. a. Cobb made the return after the DAG -OSI investigation. Cobb, 04 -003 Page 14 73. Cobb, through his employment as Business Manager for the NPSD, received a private pecuniary gain to himself in the total amount of $3,575.14. This figure is derived from the following sources: a. Purchase of a Dell Laptop Computer using NPSD funds - $1,900.00. b. Purchases made at Staples using a NPSD credit card - $1,209.84 c. The use of a Dell Dimension 4100 Desktop Computer (Serial #3EB4L), property of the NPSD, in his tax preparation business from September 2002 thru May /June 2003 - $465.30. 1. This amount was determined by the cost of the computer $2,482 divided by (4) to depreciate the computer ($620.50). 2. This amount ($620.50) was then divided by 12 to determine a monthly amount of $51.70 3. Use for (9) months @ $51.70 totals $465.30. 74. Paul Cobb has made restitution to the NPSD totaling $2,697.10 *: March 7, 2003: $2,378.88* April 2, 2003: $ 317.22 ( *We note that there is a $1.00 discrepancy between Findings 60 and 74, which we shall resolve in favor of the Respondent). III. DISCUSSION: As Business Manager of the North Pocono School District ( "School District "), Moscow, Pennsylvania from November 1999 until April 2004, Respondent Paul Cobb (also referred to herein as "Respondent," "Respondent Cobb," or "Cobb "), has at all times relevant to this matter been a public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq. The allegations are that Respondent as Business Manager of the School District violated Section 1103(a) of the Ethics Act when he used the authority of his position for a private pecuniary gain, including but not limited to: (1) Utilizing a School District account to purchase a computer and related equipment that was used for personal purposes; (2) Utilizing a School District credit card to make purchases of a personal nature and failing to reimburse the School District for the purchases; and (3) Utilizing School District equipment, including but not limited to a computer and monitor, for his private personal interest. Cobb, 04 -003 Page 15 Section 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. Having noted the issues and applicable law, we shall now summarize the relevant facts. Given Respondent's failure to file an Answer to the Investigative Complaint, the facts as averred in the Investigative Complaint are deemed admitted by the Respondent. 65 Pa. C. S. § 1108(e); 51 Pa. Code § 21.5(k). Respondent was employed as Business Manager of the School District from November 1999 until April 2004. While serving as Business Manager, Respondent also served as the Board Secretary. Respondent's duties and responsibilities as School District Business Manager included, inter alia: establishing and supervising a program of accounting and reporting for the financial affairs of the School District; developing and administering a program for purchasing supplies and equipment; maintaining an up -to -date inventory of school property; providing monthly accounting of all income and expenditures and submitting a monthly statement to the Board detailing the status of each item; and being responsible for the School District's accounts payable and preparation of related monthly reports. Respondent also had signature authority for School District accounts. The School District's purchasing policy requires employees to submit a Requisition Form for approval by the Business Manager for items to be purchased using School District funds. Upon approval, the item to be purchased is assigned a Purchase Order number from the School District Purchase Order Log, which is maintained by Respondent's confidential secretary. The School District employs a Technology Coordinator and Assistant Technology Coordinator, whose functions include maintaining School District computer equipment, maintaining School District computer inventory purchase /assignment logs, and reviewing and approving computer equipment purchases for the School District. School District employees wanting to purchase computer and related equipment submit a New Equipment Request Form" for review by the Technology Coordinator or his assistant. The form is reviewed for technical aspects, compatibility, and the like. The purchase price is not approved by the Technology Coordinator, but is subject to review by the Business Manager. The following facts relate to the allegation that Respondent utilized a School District account to purchase a computer and related equipment used for personal purposes. On August 23, 2001, Respondent ordered from Dell Computer Company, Inc. ( "Dell ") an Inspiron 4000, Pentium 111 laptop computer (hereinafter also referred to as the "Laptop Computer ") with related software packages. The School District paid for the purchase, which was in the total amount of $1,900. However, the Laptop Computer was used for Respondent's personal purposes between August 2001 and March 2003. The facts surrounding this transaction reveal deliberate actions by Respondent to circumvent School District purchasing procedures as to this purchase. Respondent did not submit a New Equipment Request Form" or receive approval from the School District Technology Coordinator or his assistant for the purchase. The Dell invoice ( #633825013) for the purchase listed the School District as the purchaser; indicated that the purchased items were to be shipped to Respondent at the School District; and referred to School District Purchase Order #37757. However, School District Purchase Order No. 37757 was for an entirely different transaction that had nothing to do with the Laptop Computer. No Cobb, 04 -003 Page 16 valid Purchase Order number was ever assigned to Dell Invoice #633825013. No School District employee other than Respondent was involved with the purchase. The Dell Invoice includes coding and a notation indicating that the cost was to be reimbursed to the School District by the person making the purchase, Respondent Paul Cobb. However, the School District paid for the purchase, and Respondent was one of the authorized signatories who signed the School District check paying for it. The School District General Fund expenditure card pertaining to Dell Invoice #633825013 also contains Respondent's initials signifying his approval. Respondent further used his authority as Business Manager to re- designate the account codes for the transaction in School District General Ledger Transaction Reports, changing the transaction from an account receivable (money owed by Respondent) to a School District expense, and giving the impression to independent auditors auditing the School District that the Laptop Computer was being used for School District purposes. To the contrary, between August 2001 and March 2003, the Laptop Computer was being used for Respondent's personal purposes. Specifically, the Laptop Computer was used by Respondent's daughter while attending Weidner University. Respondent did not make any reimbursement to the School District for the Laptop Computer and software packages until March 2003, when his conduct came under scrutiny as discussed more fully below. Per the admitted Findings, Respondent's use of the authority of his public position to purchase the Laptop Computer and software packages at School District expense resulted in a private pecuniary benefit to Respondent in the amount of $1,900. The following facts relate to the allegation that Respondent utilized a School District credit card to make purchases of a personal nature and failed to reimburse the School District for the purchases. The School District maintains a Staples Office Supply credit card for purchases of school related supplies. During Respondent's tenure as School District Business Manager, the credit card was under Respondent's direct control. As detailed in Findings 41 -47, Respondent realized a private pecuniary gain of $1,209.84 when he used the School District Staples credit card to purchase supplies at School District expense, which supplies he used for private purposes. Respondent circumvented School District purchasing procedures as to the Staples purchase. Specifically, on October 19, 2002, Respondent approved an unsigned School District Requisition Form for items to be purchased at Staples. Respondent also did not obtain the required Purchase Order Number for the purchase. Respondent purchased the following items at School District expense, which items appear on Staples Invoice #60670: NEC 15" LCD Monitor NEC 17" LCD Flat Monitor Cordless Navigator CD /DVD Stomp Matte Quicken 2003 Premium Program Slim Jewel Case 100 Pack Spindle of CD Total $ 329.98 $ 649.98 $ 79.98 $ 11.99 $ 89.95 $ 7.98 $ 39.98 $1,209.84 On 1/15/2003, a School District General Fund Check in the amount of $1,322.60 Cobb, 04 -003 Page 17 was issued as payment for four (4) Staples invoices, including Invoice No. 60670 in the amount of $1,209.84. Respondent's signature is one of the authorized signatures that appear on the check. Respondent did not reimburse the School District at that time. The above items that Respondent purchased were used for Respondent's private purposes. The following facts relate to the allegation that Respondent utilized School District equipment, including but not limited to a computer and monitor, for his private personal interest. The School District has no policy permitting employees to utilize School District equipment outside School District facilities. In or about September 2002, Respondent moved a School District Dell Dimension 4100 Desktop Computer, Serial #3EB4L (hereinafter also referred to as the "Desktop Computer ") from the School District to his home. Respondent advised the School District Assistant Technology Coordinator that he was taking the Desktop Computer home so that he could work on the budget and other School District items. Respondent did not submit an Equipment Assignment form prior to removing the Desktop Computer and taking it to his home. The Desktop Computer was not used for School District business. Respondent retained use of the Desktop Computer for personal purposes (his part -time tax preparation business) from September 2002 until approximately June 2003. The resulting private pecuniary benefit to Respondent was in the amount of $465.30. (Finding 73 c). The following facts relate to an investigation by the Pennsylvania Department of Auditor General, which focused in part on Respondent's actions as School District Business Manager. On or about February 24, 2003, the Pennsylvania Department of Auditor General, Office of Special Investigations (DAG -OSI) initiated an investigation of the School District. A portion of the investigation focused on Respondent's actions as School District Business Manager. Initially, Respondent attempted to cover up his wrongdoing by lying to DAG -OSI investigators and providing them with a fabricated document that he had created, which falsely indicated that he had signed out the Laptop Computer on March 6, 2003, for the stated purpose of completing budget work. However, on March 31, 2003, during a second interview, Respondent admitted to DAG -OSI investigators that he was not truthful with them in prior conversations. Respondent admitted that he made personal purchases from Dell using School District funds. Respondent admitted that he made personal purchases at Staples using the School District Staples credit card. Respondent admitted that the Desktop Computer taken from the School District to his home was used in his personal income tax preparation business. Following the initiation of the investigation by the DAG -OSI, Respondent issued two personal checks as reimbursement to the School District. First, on March 7, 2003, Respondent issued a personal check payable to the School District in the amount of $2,379.88 as reimbursement for the following items previously purchased by Respondent through the School District for personal use: ITEM Laptop Computer (Dell) NEC 15" Monitor (Staples) CD /DVD Stomp Matte (Staples) Quicken 2003 Premium Program (Staples) PURCHASE PRICE $1,900.00 $329.98 $11.99 $89.95 Cobb, 04 -003 Page 18 Slim Jewel CD case (Staples) $7.98 CD 100 Pack Spindle (Staples) $39.98 TOTAL $2,379.88 Subsequently, on April 2, 2003, Respondent issued a personal check payable to the School District in the amount of $317.22 for interest (computed at 11 %) on the Laptop Computer purchased in August 2001. In or about June 2003 Respondent returned the Desktop Computer to the School District, together with the following two items he had purchased from Staples at the School District's expense: the NEC 17" Flat Screen Monitor (purchase price $649.98) and Cordless Navigator (purchase price $79.98). 2004. Ultimately, Respondent was suspended from his job at the School District on April 2, Per the admitted Findings, Respondent, through his employment as Business Manager for the School District, received a private pecuniary gain to himself in the total amount of $3,575.14 (see, Finding 73), excluding any interest. This total is the sum of the following items: Laptop Computer and software packages from Dell $1,900.00 Purchases made at Staples used for personal purposes $1,209.84 Use of the Desktop Computer for personal purposes $465.30 Total $3,575.14 Respondent has made restitution to the School District in the total amount of $2,697.10 (see, Finding 74). However, of this amount, $317.22 was for interest on the Laptop Computer, which was not included in the above calculation of the base private pecuniary benefit to Respondent. Only the March 7, 2003, payment by Respondent in the amount of $2,379.88 would pertain to the base private pecuniary benefit. We shall now determine whether Respondent violated Section 1103(a) of the Ethics Act as alleged in the Investigative Complaint. As we apply the facts to the allegations, due process requires that we not depart from the allegations. Pennsy v. Department of State, 594 A.2d 845 (1991). Based upon our review of the record, we find that there is clear and convincing proof to support the alleged violations of the Ethics Act. Clear and convincing proof is "testimony that is so `clear, direct, weighty, and convincing as to enable the trier of fact to come to a clear conviction, without hesitance, of the truth of the precise facts in issue." In Re: Charles E. D.M., 550 Pa. 595, 601, 708 A.2d 88, 91 (1998) (Citation omitted). There is clear and convincing proof that Respondent violated Section 1103(a) of the Ethics Act when he used the authority of his public position as the School District Business Manager for a private pecuniary gain by utilizing a School District account to purchase the Laptop Computer and related software packages, under Dell Invoice # 633825013 at a total cost of $1,900, which items were used for personal purposes. The element of use of authority of public office /employment is established by the following actions of Respondent. On August 23, 2001, Respondent used his authority as School District Business Manager to order the Laptop Computer and related software packages from Dell. Respondent circumvented School District purchasing procedures— Cobb, 04 -003 Page 19 something that he would not have been able to accomplish but for being the Business Manager. Specifically, Respondent did not submit a New Equipment Request Form" or receive approval from the School District Technology Coordinator or his assistant for the purchase. Additionally, the order was placed using a bogus School District Purchase Order number. No valid Purchase Order number was ever assigned to the purchase, and no School District employee other than Respondent was involved with the purchase. Although the Dell Invoice included coding and a notation indicating that the cost of the item was to be reimbursed to the School District by Respondent, in actuality Respondent further used the authority of his public position to cause the School District to pay for the purchase. Respondent signed the School District check paying for the purchase as one of three School District officials authorizing the payment. Respondent's initials are on the School District General Fund expenditure card pertaining to such payment, signifying his approval. Respondent used his authority as Business Manager to re- designate the account codes for the transaction in School District General Ledger Transaction Reports, changing the transaction from an account receivable (from Respondent) to a School District expense, and giving the impression to independent auditors auditing the School District that the Laptop Computer was being used for School District purposes. Per the admitted Findings, Respondent's above numerous uses of the authority of his public position resulted in a private pecuniary benefit to Respondent in the amount of $1,900, based upon Respondent's use of the Laptop Computer and software packages for personal purposes. Respondent did not make any reimbursement to the School District for the Laptop Computer and software packages until March 2003, when his conduct came under scrutiny. Even then, he tried to cover up his wrongdoing. With each element of a Section 1103(a) violation having been established, we hold that Respondent violated Section 1103(a) of the Ethics Act when he used the authority of his public position as the School District Business Manager for a private pecuniary gain by utilizing a School District account to purchase the Laptop Computer and related software packages, under Dell Invoice # 633825013 at a total cost of $1,900, which items were used for Respondent's personal purposes. Turning to the next allegation, we find that there is clear and convincing proof that Respondent violated Section 1103(a) of the Ethics Act when he used the authority of his position as the School District Business Manager for a private pecuniary gain by utilizing a School District credit card to make purchases totaling $1,209.84 from Staples under Staples Invoice #60670, using the items for private purposes, and failing to reimburse the School District at the time of such purchases. The element of use of authority of public office /employment is established by the following actions of Respondent. First, Respondent circumvented School District purchasing procedures— something that he would not have been able to accomplish but for being the Business Manager. Specifically, Respondent approved an unsigned School District Requisition Form for items to be purchased at Staples and failed to obtain the required Purchase Order Number for the purchase. Respondent then purchased the items totaling $1,209.84 using the School District credit card, which items appear on Staples Invoice #60670. Respondent signed the School District Check that paid for the purchases as one of the authorized signatories. The admitted Findings of the Investigative Complaint establish that Respondent realized a private pecuniary gain of $1,209.84 when he used the School District Staples credit card to purchase the aforesaid supplies, which supplies he then used for private purposes. On March 7, 2003, Respondent issued a personal check payable to the School District that included reimbursement for all of the items purchased at Staples except for Cobb, 04 -003 Page 20 two: the NEC 17" Flat Screen Monitor (purchase price $649.98) and the Cordless Navigator (purchase price $79.98). The latter two items he returned to the School District in or about June 2003, approximately eight months after purchasing them. With each element of a Section 1103(a) violation having been established, we hold that Respondent violated Section 1103(a) of the Ethics Act when he used the authority of his position as the School District Business Manager for a private pecuniary gain by utilizing a School District credit card to make purchases totaling $1,209.84 from Staples under Staples Invoice #60670, using the items for private purposes, and failing to reimburse the School District at the time of such purchases. Turning to the third allegation, we find that there is clear and convincing proof that Respondent violated Section 1103(a) of the Ethics Act when he used the authority of his position as the School District Business Manager for a private pecuniary gain by utilizing School District equipment, including the Desktop Computer (Serial #3EB4L) and monitor, for his private personal interest. The element of use of authority of public office /employment is established by the following actions of Respondent. In or about September 2002, Respondent moved the Desktop Computer from the School District to his home. Respondent circumvented School District policies by failing to submit a required Equipment Assignment form prior to removing the Desktop Computer and taking it to his home and by lying to the School District Assistant Technology Coordinator, indicating that he was taking the Desktop Computer home so that he could work on the budget and other School District items. Respondent retained use of the Desktop Computer for personal purposes (his part - time tax preparation business) from September 2002 until approximately June 2003. The resulting private pecuniary benefit to Respondent was in the amount of S465.30. (Finding 73 c). With each element of a Section 1103(a) violation having been established, we hold that Respondent violated Section 1103(a) of the Ethics Act when he used the authority of his position as the School District Business Manager for a private pecuniary gain by utilizing School District equipment, including the Desktop Computer (Serial #3EB4L) and monitor, for his private personal interest. As we consider an appropriate disposition of this case, we note that although Respondent had a full and fair opportunity to participate in these proceedings and to present his side of this case, he chose to not do so. Accordingly, based upon the Findings of the Investigative Complaint, which Respondent is deemed to have admitted, Respondent through his above violations of the Ethics Act received a private pecuniary gain to himself in the total amount of $3,575.14 (Finding 73), excluding any interest. So far, Respondent has made restitution to the School District in the amount of $2,379.88 as to the base private pecuniary benefit and $317.22 as to interest on the Laptop Computer. (Findings 60 -61, 63, 74). The difference between the total base private pecuniary benefit ($3,575.14) and the total restitution paid to date as to the base private pecuniary benefit ($2,379.88) is an outstanding financial gain of $1,195.26. The Investigative Division has filed a Position Statement in which it requests that this Commission direct Respondent to make restitution to the School District in the amount of the outstanding financial gain. The Position Statement suggests reimbursement in an amount that would offset Respondent's total payments, including the interest payment, against the base private pecuniary benefit that did not include interest. However, we shall order Respondent to pay full restitution based upon the remaining balance of the base private pecuniary benefit. Cobb, 04 -003 Page 21 Respondent is directed pay restitution for the outstanding financial gain in the amount of $1,195.26, which amount is to be made payable to the North Pocono School District and submitted to this Commission by no later than the thirtieth (30 ") day after the mailing date of this Order. Non - compliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. As Business Manager of the North Pocono School District ( "School District "), Moscow, Pennsylvania from November 1999 until April 2004, Respondent Paul Cobb ( "Cobb ") has at all times relevant to this matter been a public employee subject to the provisions of the Ethics Act. 2. Cobb violated Section 1103(a) of the Ethics Act when he used the authority of his public position as the School District Business Manager for a private pecuniary gain by utilizing a School District account to purchase a Dell Inspiron 4000, Pentium 111 laptop computer with related software packages under Dell Invoice # 633825013 at a total cost of $1,900, which items were used for Cobb's personal purposes. 3. Cobb violated Section 1103(a) of the Ethics Act when he used the authority of his position as the School District Business Manager for a private pecuniary gain by utilizing a School District credit card to make purchases totaling $1,209.84 from Staples under Staples Invoice #60670, using the items for private purposes, and failing to reimburse the School District at the time of such purchases. 4. Cobb violated Section 1103(a) of the Ethics Act when he used the authority of his position as the School District Business Manager for a private pecuniary gain by utilizing School District equipment, including a School District Dell Dimension 4100 Desktop Computer (Serial #3EB4L) and monitor, for his private personal interest. 5. Full restitution to the School District is warranted. In Re: Paul Cobb ORDER NO. 1354 File Docket: 04 -003 Date Decided: 2/28/05 Date Mailed: 3/1/05 1 Paul Cobb ( "Cobb "), a public employee in his capacity as Business Manager of the North Pocono School District ( "School District "), Moscow, Pennsylvania from November 1999 until April 2004, violated Section 1103(a) of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1103(a), when he used the authority of his public position as the School District Business Manager for a private pecuniary gain by utilizing a School District account to purchase a Dell Inspiron 4000, Pentium III laptop computer with related software packages under Dell Invoice # 633825013 at a total cost of $1,900, which items were used for Cobb's personal purposes. 2. Cobb violated Section 1103(a) of the Ethics Act when he used the authority of his position as the School District Business Manager for a private pecuniary gain by utilizing a School District credit card to make purchases totaling $1,209.84 from Staples under Staples Invoice #60670, using the items for private purposes, and failing to reimburse the School District at the time of such purchases. 3. Cobb violated Section 1103(a) of the Ethics Act when he used the authority of his position as the School District Business Manager for a private pecuniary gain by utilizing School District equipment, including a School District Dell Dimension 4100 Desktop Computer (Serial #3EB4L) and monitor, for his private personal interest. 4. Cobb is directed to pay restitution for the outstanding financial gain in the amount of $1,195.26, which amount is to be made payable to the North Pocono School District and submitted to this Commission by no later than the thirtieth (30 day after the mailing date of this Order. a. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, Louis W. Fryman, Chair