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Tuesday, March 5, 2013: Audit indicates treasurer may have defrauded Sec. 2

   Leading off today: The much-anticipated audit of Section 2's books says the organization may have been defrauded by its former treasurer, The Times Union reported Monday.

   The audit by Bonadio & Co. leaves open the possibilities of either simple incompetent bookkeeping or incapacitation due to treasurer Roger Seward's "great personal stress." The audit process began last June year after Seward committed suicide shortly before he was to meet with accountants hired to review his work. It was subsequently discovered that Section 2 had roughly $350,000 -- far more than the organizations top management had believed -- spread across seven accounts in four banks.

   The section also learned tax returns had not been filed since the Albany-area unit of the New York State Public High School Athletic Association was incorporated in 1978; Seward's culpability would be limited to his 10 years as treasurer.

   The 12-page audit found "significant" inconsistencies in reporting by Seward, a former Amsterdam school business manager. It concluded Section 2 turned large profits during the past three years -- after some outsiders had questioned Seward's management of their finances in light of higher ticket prices for high school tournament games and lowered meal reimbursement rates. Before the uptick, Section 2's bank balance had slipped to about $10,000 at the same time that other upstate sections were routinely holding $200,000 or more in reserves.

   Between the money in the four banks and $93,000 in cash Seward's widow discovered in her home, Section 2 had more than $400,000 at the time Seward died. "Based upon these variances, it is possible that the cash was stolen or 'borrowed' during the early years and then repaid during the more recent years," the audit states. "The inflow of cash in more recent years ... may have been an attempt to repay the cash after the Section II Finance Committee began asking questions."

   Warren County District Attorney Kathleen B. Hogan opened a case after Section 2 officials contacted her after Seward's death but told the paper last week it's unlikely there will be any criminal fallout.

   Tax implications may be a different story. Section 2 has reincorporated under a new name and is in the process of filing state and federal tax returns covering the last six years. It remains unclear what sort of dent that will ultimately make in the organization's bank balance or whether penalties will be assessed.

   Interestingly, the paper reported "roughly half" the state's 11 regional sections also did not file tax returns or register with the attorney general's charities bureau. The New York State Sportswriters Association has found eight sections have in recent years consistently filed Form 990, which provides detailed financial data available for public inspection and is frequently indicative that tax returns would have been filed. Two other sections may have not filed the "990" paperwork, and another may have stopped filing four years ago.

   As for Section 2, a logical next step would almost certainly include determining how its officers over the years, some with administrative and financial responsibilities in area school districts with multi-million budgets, could have dropped the ball so completely. According to the paper, the audit notes many oversight concerns were discussed for years at various meetings of Section 2 officials.

   F-M coach done? Fayetteville-Manlius boys hockey coach Sean Brown apparently quit or resigned after the program lost its appeal for reinstatement to the Section 3 playoffs last month, The Post-Standard reported.

   The paper based its report in part on Superintendent Corliss Kaiser's use of the past tense in emailed responses to questions from The Post-Standard. Brown has not responded to phone calls, the paper reported.

   An F-M parent said the hockey team was practicing when the last-gasp bid for relief in State Supreme Court from the state rule on the maximum number of regular-season games was rejected on Feb. 14. Brown reportedly called the players into a huddle, told them of the ruling and added, "I quit."

  
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   Change at C-NS: Embattled Cicero-North Syracuse football coach Steve Ellis has resigned after a 36-50 mark in 10 seasons, the district announced. Ellis will remain a physical education teacher at the high school.

   Ellis had been under fire from some in the community for the past year. Members of the football team organized a boycott following the 2011 season if Ellis was allowed to return as coach, and much of the staff either quit or was not retained by Ellis. C-NS was 3-13 in his last two seasons and 1-7 last fall under interim coach Jack McAndrew while Ellis was on medical leave after a gym class mishap.

   WIth a large student enrollment and good facilities, C-NS is regarded by many as a sleeping Section 3 giant. A handful of factors, however, make C-NS a less desirable coaching destination that one might expect, so the potential pool of outside candidates may not be as robust as it might seem.

   Holland ready to huddle: Holland may finally get a high school football team as part of an agreement with East Aurora.

   The Buffalo News reported the districts have applied for a combined football program, filing necessary paperwork with the Erie County Interscholastic Conference and Section 6. Under a recently approved rule revision at the state level, East Aurora would be able to absorb the additional students without having to move up from Class B.

   “That was the big stumbling block,” East Aurora AD Fred Thornley said.

   The two school boards must approve the agreement.

   Boosters in Holland have been pushing for high school football for several years, but a relatively small enrollment and a tradition in soccer made it challenging to field teams in two fall sports requiring large player pools.

   Speaking of start-ups, Utica Proctor may be back in the hockey business next season. Utica’s board of education recently OK's a proposal by parents to fund a team to the tune of about $30,000 and provide the needed transportation for games and practices.

   “Hockey parents are unique,” Proctor Athletic Manager Ralph Leo told The Observer-Dispatch. “They will go to extremes just to give their kids a chance to play.”

   With the proposed team destined for Division I, it's likely players from neighboring districts without hockey programs might be allowed.


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