Auditor: Firm Linked to Ritacco Scandal Never Received Barnegat Payments

The Barnegat school district never made payments to insurance company Federal Hill Risk Management, the firm at the center of the bribery and corruption scandal that last October led to the indictment of former Toms River superintendent , an auditor told the Board of Education this week, but the district did hire and pay another firm that investigators sought records on.

The board had called a special meeting to hear the preliminary findings of the audit, which was ordered almost a year ago after the district was subpoenaed by state and federal officials looking for any records relating to Federal Hill and a number of other insurance firms. 

Jerry W. Conaty, a representative from Toms River-based audit firm Holman & Frenia, said his company combed through tens of thousands of pages in eight years of ledger reports in search of invoices and purchase orders that named the firms in question. 

“It was a lot of material,” Conaty said. In all that documentation, the only mentions of Federal Hill were in meeting minutes from several years ago, he said, in which the company was established as the district’s broker of record and then removed just months later. He said there was no evidence Federal Hill was hired in two separate years, as was previously reported, and nothing showing the district ever paid the firm.

“We had no payments going to Federal Hill,” he said. “There was never any invoice with them and we never did any services with them.”

Conaty did note that the company that replaced Federal Hill as the district’s broker, BHB Insurance of Toms River, was named in one of the subpoenas issued to the district in 2009 and 2010. He said that the audit firm had been in contact both with BHB and the district’s insurance carrier at the time to make sure that the invoices exchanged matched the policies held by the district 

“We confirmed directly with them the coverages that were in existence, and that we had those policies,” Conaty said.

Ritacco was indicted along with Federal Hill’s owner, , in October 2010. According to the indictment, Ritacco and Gartland conspired to inflate the costs of Federal Hill’s services to the Toms River School District and then pocketed some of the money. Both men pleaded not guilty last December.

Barnegat was not the only school district federal officials subpoenaed in their investigation into Federal Hill. Documents were subpoenaed from Toms River, Brick and Perth Amboy school districts last year.

The audit will be presented at a regular meeting Tuesday, Nov. 22 at for full board approval.