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State asks to oversee special ed agency

Auditor urged takeover due to misuse of $30m

By Michael Rezendes
Globe Staff / August 24, 2011

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Education Commissioner Mitchell D. Chester has proposed naming an oversight team of state officials to help manage a troubled Merrimack Valley agency for special needs children where more than $30 million may have been spent inappropriately on excessive salaries, inflated rents, and luxuries such as country club outings and golf fees, according to a spokesman for Chester.

Under a memorandum of agreement that will be considered today at a board meeting of the Merrimack Special Education Collaborative, Chester is calling for three to four officials from the Department of Elementary and Secondary Education to help right the agency, which is already facing investigations by federal prosecutors and half a dozen state agencies. Chester is also calling for the board to give him the authority to approve or reject the appointment of an interim executive director.

“Our foremost concern continues to be protecting student services and the public dollar,’’ said JC Considine, Chester’s spokesman.

The collaborative’s board placed its co-executive directors, Donna Goodell and John Fletcher, on paid leave earlier this month following allegations that they mismanaged public funds and used agency credit cards to cover personal expenses.

Chester made the proposal two weeks after state Auditor Suzanne M. Bump called on him to seize control of the collaborative, following an audit in which she discovered that the agency may have misspent more than $30 million. Bump also charged that agency officials obstructed her investigation.

“I urge you to take all immediate available steps to secure day-to-day oversight of this public education institution,’’ Bump said in an Aug. 9 letter to Chester. “It is clear to me that nothing less than [state] controlled receivership of this entity will provide the governance and fiscal controls necessary at this juncture.’’

Yesterday, Bump said she would reserve comment on Chester’s proposal until an agreement is approved by the collaborative’s 10-member board of directors. “The auditor has been in discussions with [the Education Department] regarding the terms of the [memorandum] and will comment once it has been finalized,’’ said Ann C. Dufresne, Bump’s spokeswoman.

The collaborative is a consortium of 10 public school districts north of Boston that pool their resources to lower the cost of providing specialized instruction and job training to about 500 children and 200 adults with mental and physical disabilities. The agency has a budget of nearly $20 million and 190 full-time employees. Classes for some students are scheduled to begin next week.

Judith Klimkiewicz, chairwoman of the collaborative’s board, said it is unclear whether board members will approve Chester’s proposal or seek to alter it at today’s meeting, adding that the matter is scheduled for discussion, not action.

She also said that several board members have yet to review the proposal and will be seeking to discuss details with Education Department officials. Jeffrey R. Wulfson, deputy commissioner of the Education Department, is scheduled to attend the meeting of the board.

“I’m sure it will be a positive discussion,’’ Klimkiewicz said.

The controversy around the collaborative was ignited in June, when state Inspector General Gregory W. Sullivan concluded a yearlong investigation by accusing John B. Barranco, the collaborative’s former executive director, of orchestrating the illegal transfer of at least $11.5 million from the collaborative to a related nonprofit, the Merrimack Education Center. Sullivan said Barranco used the money to fund extravagant salaries and bonuses for himself, a former girlfriend, and a tight group of staff members.

Sullivan called on the collaborative to immediately stop making payments to the center, and the collaborative has done so. Sullivan also recommended that the collaborative demand return of at least $11.5 million from the center and redistribute the money to the 10 school districts that provide the lion’s share of the collaborative’s funding. The collaborative has yet to act on that recommendation.

After Sullivan’s findings, federal prosecutors delivered a subpoena to the collaborative, calling on the agency to hand over to a grand jury all its financial records covering the last decade. In addition, six state agencies, including the auditor’s office, have launched inquiries into the collaborative and the center.

Thomas E. Lent, an attorney representing the collaborative, pointed out that six of the agency’s 10 board members have held their positions for a year or less.

Michael Rezendes can be reached at rezendes@globe.com.