Letter from Bob Berg: Honesty is the Best Policy
- Written by Robert Berg
- Category: The Goods
(This letter was written by Scarsdale resident Robert Berg)
My message to the Administration and the School Board is best expressed by Pete Seeger in "Where Have All the Flowers Gone?": "Oh, when will you ever learn!" Last night's Board meeting presented the Administration and the Board with an opportunity to explain with at least some honesty and transparency the bombshell they dropped on the community last week at the Special Meeting. At the March 30th Special Meeting, they disclosed for the first time that the District screwed up its payment of payroll taxes to the federal government over multiple quarters, and the District owes the U.S. Treasury $1.77 million in interest and penalties. But as usual, the Administration and Board, instead of owning this bad situation and dealing with it openly, are engaging in a cover-up along with some wacky accounting that can only lead to further disaster down the road.
Founding Father Ben Franklin always said it right: "Honesty is the best policy." As soon as the Administration learned about the errors in the federal payments of payroll taxes -- which the Administration has admittedly known about for many months -- the School Board should have been immediately informed. Astoundingly, the Board tells us they first learned on March 25, 2022 about this unprecedented payroll tax payment mess; the ensuing IRS investigation; the massive amount of interest and penalties assessed against the District; and last night, we learned about a $1.7 million lien the IRS had placed against the District last summer.
I think we're being played for fools. The District has admittedly been negotiating with the IRS for months. This means that this District had to have engaged special tax counsel, and the Board would have had to have been informed about this very material and serious tax problem and the ramifications for the District's finances. Indeed, the Board likely would have had to authorize the hiring of the special counsel. Moreover, every member of the Board serves on the Board's Audit Committee. Is it at all credible that the District's outside auditors would not have informed the Audit Committee about the IRS investigation and negotiations and a $1.7 million IRS lien asserted against the District? The auditors have a fiduciary duty and professional obligation to keep the Audit Committee fully informed. Have they violated those duties? Very doubtful -- I'm certain that at least individual Board members have known, probably for months, what's going on, and have not told the public anything.
Let's assume the Board is telling the truth -- that is, every Board member had been kept entirely in the dark until March 25. If that's really what happened, then the whole Administration should be fired immediately. Failing to advise the Board about such a huge problem in internal controls, a major federal tax investigation of the District, a $1.7 million IRS lien, and substantial ramifications to the District's AAA credit rating, outstanding paper, and the upcoming budget, among other things, constitutes gross malfeasance on the part of the Administration, and demands immediate termination.
Has the District or the Board notified the State Department of Education about this situation? How about the State Comptroller's Office which oversees the finances of all New York State public school districts? Shouldn't these supervisory agencies be told?
"Something is rotten in the State of Denmark." Hamlet, Act I, Scene IV (67).
At the beginning of tonight's meeting, Board President Ceske shamelessly stated with a straight face: "The Board is committed to providing transparency." LOL. She then proceeded to provide a bizarre "clarification" of Stuart Mattey's wholly unsatisfactory explanation at the March 30th special meeting. Ms. Ceske asserted that a "keying" error occurred when making a Q1 2020 deposit, resulting in the Q1 payment being made late. The IRS then assessed a "failure to deposit" penalty. OK, seems like the IRS properly assessed the penalty, no? Then the District screwed up again - a Q3 payment was applied to Q2 and a Q4 payment was applied to Q3. The IRS assessed "failure to deposit penalties" for Q3 and Q4. These "failure to deposit" penalties weren't chump change. Ms. Ceske said they amounted to $1,309,636.81. Wow! The magnitude of the error needed to generate such huge penalties in such a short amount of time hasn't been disclosed, but it must be pretty big.
According to Ms. Ceske, the IRS applied the Q3 and Q4 tax payments, which the District had erroneously misallocated to Q2 and Q4, to pay the first "failure to deposit" penalty of $861,320. This led to a tax shortfall owed to the U.S. Treasury of $843,558 in Q4 of 2020. It turns out that this tax shortfall payment of $843,558 is the payment the Board authorized the Treasurer to pay at its March 30 Special Meeting. So the District is paying the IRS taxes back taxes owed of $843,558. Under standard accounting principles, paying taxes is an expense. But miraculously, as Stuart Mattey and Ms. Ceske explained, our District has been cleared by our auditors to book this tax payment as an "accounts receivable." This is an accounting gimmick. When you owe money on account, you have what's called an "accounts payable." So when you owe back taxes, these back taxes are booked as accounts payable. But if you say Scarsdale-cadabra, our District auditors allow us to transmogrify an accounts payable into an accounts receivable just like that. Who'd have thunk that mighty Scarsdale would sink to such a Trumpian accounting abyss? But here we are.
Stuart argues that this is all one big misunderstanding. Sure, the District messed up the "timing" of the payments, but we're paying everything we owe, so the District really shouldn't have to pay any penalties or interest, and we should get a refund for all of that -- to the tune of $1.3 million. And we've filed for abatements and refunds and abatements, and we've been talking with the IRS and they're really nice people and they're saying some nice things to us. So we are going to book the $843,558 back tax payment as an accounts receivable because we've got a decent chance of getting it back someday, maybe this year, maybe next, maybe never.
The thing is -- under real accounting rules like GAAP, you can't book monies as an accounts receivable unless you have a clear legal right to those monies and a high degree of certainty of collecting those monies in the near future, but certainly within 12 months. The District has, at best, a contingent claim for a refund of the $843,558. The IRS has not promised in writing to refund the monies to the District. All the IRS has done, maybe, is engage in some friendly discussions. Unless there's a signed agreement in writing for the refund by the IRS payable to the District within the next 12 months, the District's tax payment of $843,558 cannot be booked as an accounts receivable. It's bad enough that the District is a tax deadbeat. It shouldn't stray into cooking the books too.
Now why does this all matter? Stuart says this won't affect the budget at all -- it's just a cash flow issue. That's another lie. The $843k tax payment has to be booked as an expense. This expense has not been budgeted for, and so, the District must draw down its reserves to pay for this unanticipated expense. It can't carry the $843k as an asset on its books because there's no certainty of a refund. Now, remember, the proposed budget for next year is about to be finalized, and will be voted upon by the public in the middle of May. The proposed budget is just a smidgeon ($75k) below the tax cap. This $843k tax payment, if properly accounted for, reduces the reserves by that amount. If the District wants to maintain reserves at the proposed level, the District will have to raise taxes by another $843k to make up for the tax payment. This blows a giant hole through the tax cap. The ramifications are substantial. Very few "above the tax cap" school budgets are presented to voters each year in New York State because voters generally reject those budgets. A budget that's over the tax cap requires 60% of voters to vote in favor (a super-majority) in order to pass. The one time Scarsdale tried this in 2013, the school budget failed -- the first time a school budget failed in Scarsdale in 45 years.
What's worse, if the District keeps the $843k payment in the books as an accounts receivable - in violation of generally accepted accounting principles --- then the budget residents will be voting on in May will illegally appear to be within the tax cap -- and require a simple majority vote for passage -- when, if GAAP were followed, the budget would really be above the tax cap and require a super majority vote for passage. If the District puts forth a budget for public vote that doesn't conform with GAAP, the entire budget vote may be illegal. The District is placing everything in great legal jeopardy because it won't honestly and openly address its IRS problem and its federal tax pickle. We residents deserve much more from the Administration and Board.
Letter from Max Grudin: What is Putin's End Game?
- Written by Joanne Wallenstein
- Category: The Goods
This letter was written by Max Grudin of Scarsdale:
Dear Friends and Neighbors:
Thank you for your support of the Ukrainian people.
The conflict in Ukraine has not ended, we are all aware of the suffering: over 10 million Ukrainians have been displaced, every second child does not live under the home roof, and Russia routinely targets civilians.
I want to focus on other aspects: the situation with Russia, the end game, and ways to help.
Here are a few snippets from the Russian media - they read like an upside down world:
● “This is not a war just against Ukraine. This is a war against all the rot inside Russia that has been betraying our country over the last few years”: Dmitry Rogozin, Director of the Russian Space Agency.
● On a popular right-wing show “Solovyov TV” it was claimed that Russia needs the
Ukraine land, and “all that filth that escapes to the West might as well stay there”.
● On the same show other presenters discussed potential nuclear strikes against Europe.
Russian politicians make calls to “denazify” Poland and other neighboring nations.
● Putin has mentioned that “national traitors” will be “spat out like gnats” during the
“necessary self-cleansing of society”.
● Some Russian media claim that both sides are to blame for the casualties.
At this point many people in Russia know what is happening. It is scary when people continue to support the war despite seeing the bloodshed. Members of the economic and political elites are undoubtedly aware of the horrors on the ground. I call on people who are in touch with Russian elites to remind them of their responsibility to guide Russia. I have heard of a wealthy Russian who wanted to donate to a Ukrainian humanitarian cause, but he preferred to remain anonymous and he wanted to avoid any mention of Ukraine on his social media. It is important for such people to act like leaders.
People from many nations and ethnic backgrounds have reached out to me with their support and donations. Yet 35 of the 193 governments abstained from the UN resolution demanding an end to the Russian invasion. We live in an educated and international community - it is fair to ask those governments to stop turning a blind eye on the ongoing slaughter in Ukraine.
What is the end game?
Just a couple of days ago Russia declared that its focus will shift to the east of Ukraine. That does not mean that Russia would not want to take over the entire country if an opportunity presented itself. On the other hand Ukraine does not have enough weapons for a major counter attack. The discussion of the end of hostilities assumes no major changes on the battlefield.
Historical connections between Ukraine and Russia go back 1000 years or so. Ukraine that is West-oriented contradicts Putin’s vision of it being a part of the “Russian world”. It is tragic that the Russian leadership views Ukraine only as a sacred “territory” that must make Russia stronger in its struggle against “the West.” Those historical ties and the prior aggression against the Crimea and Donbass mean that at the very least the Russian leadership aims to make some territorial gains in order to declare this war a success. There is a full expectation on the Russian side that as one condition for the end of conflict is for Ukraine to recognize Crimea, annexed since 2014, as part of Russia. The Donbass status is less clear.
The territorial dispute is hard to resolve. I understand that the vast majority of Ukrainians are against making any territorial concessions. They feel they have had enough war over the last 8 years and they would like peace on their terms rather than on terms of a war criminal. The Ukrainian leadership has injected a degree of pragmatism and any agreement will have to be accepted by the people. The people of Ukraine will come together to rebuild their country as a modern European society.
Even past the immediate cessation of hostilities Putin will be viewed as a war criminal by most in the West and likely a loser when the Russian public realizes what has transpired. That is not a way forward. In the long term Russia needs a leadership that can navigate the country out of this terrible situation.
What else can be done?
I want to emphasize the gratitude people of Ukraine express to all the support and donations. “Razom for Ukraine” is a US charity that helps with humanitarian supplies as well as tourniquets and protective equipment for territorial defense such as knee pads, bulletproof vests, etc. Things like that are sorely needed, as people are defending their land, their families and lives. As the situation on the ground changes I will be happy to let you know other most effective ways to donate.
Please call our political leaders about helping Ukraine with humanitarian supplies as well as with weapons. Also, if you are from Russia or other countries whose governments did not oppose this slaughter, please reach out to people there.
Should Marker Tag, AKA Assassin, Be Permitted at SHS?
- Written by Sydney Piccoli
- Category: The Goods
(This article and illutration, were submitted by SHS Senior, Sydney Piccoli)
Marker tag, once known as assassin, is a senior class tradition at Scarsdale High School with no ties to the administration. Seniors pay an entry fee, which is then divided by the marker tag facilitators into first, second, and third prizes. Although there are several rules about perimeter and safe-conduct, the game’s general gist is that each participant is assigned a “target” that they must slash with a washable marker, which represents their elimination. The participant then assumes a new target and so forth until three people remain to claim their respective prize.
The Scarsdale High School administration has a long-established history of condemning marker tag. But is it a harmless tradition that restores the energy of a slumping senior class? Or is it a symbol of the ignorance that persists in Generzation Z, which has experienced a historic number of school shootings? Does the game incentivize violence or is it just that—a game?
Generation Z has grown up watching news reports of school shootings, mourning victims, and re-evaluating how safe they feel in schools. The last thing anyone would expect is for Scarsdale High School seniors to make light of school shootings. Over the years, marker tag has undergone dramatic changes to adapt to the current political climate and become more sensitive toward mass shooting victims. A few years ago, Scarsdale students transitioned from referring to the game as “assassin” to “marker tag.” Whereas assassin has commonly been used to describe school shooters, marker tag has no ties to school shootings and clarifies that it is indeed a game that should not be perceived as anything else. Furthermore, Scarsdale students now use markers as “weapons” compared to neighboring schools, who use water pistols and Nerf dart guns.
One could easily see how students running around wearing all black, holding toy guns, and shooting one another could easily prove insensitive and cross the line from enjoyable to inappropriate and malicious. But, students hiding behind lockers and trees trying to draw on each other’s hands with markers feel innocent enough. If more changes are made, such as not referring to the people as targets to be killed, but rather participants to get out, what is the harm? How would that differ from elementary school students playing tag on the playground?
Teachers and administrators have cited that seniors coming in fully covered makes it difficult to decipher whether or not they are a student or a person intending to harm Scarsdale High School seniors. The organizers and participants of the game have made changes, limiting where a person is allowed to be marked to prevent students from covering their faces in school. Furthermore, those opposing marker tag believe that the act of students killing one another can be too closely likened to school shootings. If it’s just an issue of how the game is being perceived, it seems as though it would be better for seniors to adjust the language they use for the game as opposed to not playing it completely.
Spanning decades, marker tag has become a staple tradition for Scarsdale High School seniors alongside prom, homecoming, and senior chalking. After three and a half years of hard work, students look forward to the rare opportunities they have to escape the chaos and stress of school and rejoice in time spent with their classmates. Marker tag fosters bonding as seniors form alliances with their friends and complain to one another how wearing long sleeves and sweatpants in the middle of March for the competitive edge is “totally worth it.” By the time marker tag rolls around, seniors are already mentally checked out, so it seems like banning the
game because it is “a distraction” feels obsolete. Students are also allowed to play marker tag or not, which means each individual can dictate whether or not they would like to sacrifice their time and money to join in.
Although Scarsdale High School seniors playing marker tag has remained a tradition, the world has and will continue to change. There was a time when a school shooting proved to be an anomaly, but it is 2022, and there have been 103 school shootings since 2018. The actions we take must reflect the current circumstances of the world. As of right now, outlawing marker tag seems to be an unreasonable course of action considering how many students enjoy the activity and form a community around playing. Scarsdale students have also taken proactive steps to make the tradition more sensitive to the victims of school shootings and appropriate overall, which should be recognized. If the administration continues to voice specific concerns and the student body works to adjust them, it seems as though the Scarsdale High School tradition of marker tag could continue for years to come.
Thanks to our Social Workers
- Written by Joanne Wallenstein
- Category: The Goods
This Letter to the Editor was written by Deb Pekarek
As we celebrate Social Work Month, we want to shine a light on all the
Scarsdale Edgemont Family Counselling Service’s
consummate social work professionals
This year especially and beyond you …
Care, care, care
Have high standards
Provide resources, support and comfort
Work with heart and passion everyday
You are essential!
The Board of Directors of Scarsdale Edgemont Family Counselling Service recognizes and is inspired by your professionalism, expertise, compassion, energy and empathy as you address all the mental health needs of our community
Your work is truly unique and your presence in our community is crucial to our wellbeing and so much appreciated
Thank-you for becoming a social worker!
Thank-you for all the work you have accomplished during the Pandemic!
And thank-you for being an essential part of the
Scarsdale Edgemont Family Counselling Service’s Family!
You are the best!
Edgemont Mourns the Passing of Local Resident Walter P. Stern
- Written by Joanne Wallenstein
- Category: The Goods
Public tributes to Wally have arrived from near and far. In a letter to Trustees earlier this week, Westchester Community College described Wally as an “advisor to presidents, international heads of state, ambassadors, and a model of integrity in the investment business,” adding that “Wally cared deeply about making education accessible and equitable.” John Walters, President of Washington D.C.-based think tank Hudson Institute, expounded in a press release, “Through his leadership, Wally served as Hudson Institute’s ‘North Star,’ guiding the organization through the administrations of 10 U.S. presidents. As a result of his guidance and support, Hudson has become one of the world’s most respected policy organizations, dedicated to promoting American leadership for a secure, free, and prosperous future.” Robert Satloff, Executive Director of the Washington Institute for Near East Policy, explained in a press release, “In his quiet, unassuming way, Wally — as he was affectionally known by all — was a pathbreaking pioneer in the world of finance and then again in the world of ideas,” adding that he was “a consistently wise source of counsel, a remarkably generous patron who never sought credit for his philanthropy, and a true gentleman, unfailingly warm and kind. Wally was a great and good man.”
Stern was born on Sept. 26, 1928, in Manhattan. He graduated from New Rochelle High School in 1946. In 1950, he received a bachelor’s degree (Phi Beta Kappa) from Williams College. In 1952, Stern received an MBA, with distinction, from Harvard University. He then served his country as an Air Force officer. For the next two decades, Stern worked at Burnham & Company in New York, where he was responsible for research, institutional sales, and investment management. In 1973, Stern joined the Capital Group Companies. He served as chairman and a director of Capital International, Inc. and chairman of the New Perspective Fund and the Emerging Markets Growth Fund. Stern had responsibilities for following financial and political developments worldwide.
Stern was Chairman of the Institute for Chartered Financial Analysts and the Financial Analysts Federation, where he pioneered the CFA examinations. He taught investments at several universities and was a longtime board member at Temple-Inland, Inc. Stern also became a mentor to countless investment professionals and others.
Outside the investment community, Stern was most passionate about Hudson Institute, which he helped bring to prominence in the 1970s with his close friend Herman Kahn. Stern served for decades as Hudson’s Chairman. Among the many other organizations that he served as board member and investment advisor were The Washington Institute for Near East Policy and the Republican Jewish Coalition.
Known for displaying fairness and deflecting credit for his good deeds, Stern lived by the motto: You’d be surprised how much you can accomplish in life if you don’t care who gets the credit.
Stern’s local public service included stints as president of the Longview Civic Association, member of the Edgemont School Board Nominating Committee, and coach of many youth sports.
Stern’s grandchildren recall his often chronicling on his birthday that, “When I graduated from college, I set four goals: (1) Earn the respect of my professional peers; (2) Gain financial stability; (3) Make the world a better place; and, (4) Raise a good family.” He hit for the cycle!
In addition to his wife Betsy, Stern is survived by his children Sarah May Stern (Mark Rosenblatt) of Edgemont; William May Stern (Ann Shapiro) of Nashville; and David May Calhoon Stern (Mary Elizabeth Calhoon) of Edgemont; by his grandchildren Judd Rosenblatt (Melanie Plaza), Rebecca Rosenblatt (Ben Manson), Tom Rosenblatt, Zachariah Stern, Phoebe Stern, Kasey Stern, Gavin Stern and Fiona Stern; by two great-grandchildren Trent Rosenblatt and Leo Manson; and by his younger brother Richard Stern (Phyllis Edelstein). He was preceded in death by his parents Leo and Marjorie Stern and his brother Robert Stern.
A memorial service is scheduled at Westchester Reform Temple on March 4 at 10:45 am. Proof of vaccination and booster is required. The service can be live-streamed at wrtemple.org. In lieu of flowers, please consider gifts to Hudson Institute or Washington Institute for Near East Policy.Longtime Edgemont resident Wally Stern passed away peacefully at home on Sunday, Feb. 27. He was 93 years old and had lived in Edgemont since 1962. A titan in the international investment community, Stern also had a profound effect on events at home and abroad through his leadership in many organizations, most notably those dedicated to the survival of the State of Israel and policies that favored American exceptionalism, in the U.S. and overseas. Still, he frequently said that his greatest achievement was raising a quality family. Stern gave credit for his family to his surviving wife of 64 years, Betsy May Stern, an active community resident and former president of the Edgemont School Board. Two of Wally’s children live in Edgemont and also served as School Board presidents.