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State seeks tighter grip on special-ed programs

By Michael Rezendes
Globe Staff / September 28, 2011

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The state Board of Elementary and Secondary Education approved a series of recommendations yesterday aimed at tightening control over the state’s 30 educational collaboratives, the scandal-rocked network of local public agencies that provide educational services to more than 8,000 disabled children.

Education Commissioner Mitchell D. Chester offered the recommendations at a time when a federal grand jury is investigating the activities of a Merrimack Valley collaborative where the former executive director, John B. Barranco, is accused of siphoning $11.5 million from the agency and transferring the money to a related nonprofit, using the funds to pay lavish salaries to himself, a former girlfriend, and a group of close associates.

The board’s eight recommendations, which Chester will present at a state legislative hearing this morning, include authorizing the education commissioner to appoint one member to each collaborative’s board of directors; requiring the collaboratives to undergo independent annual financial audits; and requiring the collaboratives to maintain independence from the nonprofit organizations that, in some cases, help the collaboratives provide services to disabled children.

Secretary of Education Paul Reville, who is Governor Deval Patrick’s appointee to the state board of education, said the recommendations are specifically designed to prevent a recurrence of the “egregious abuses’’ alleged to have taken place at the Billerica-based Merrimack Special Education Collaborative.

Reville, who abstained from yesterday’s vote because he is a member of Patrick’s cabinet, also said the recommendations will be used by the governor as he formulates his own legislative proposal for preventing the abuses said to have occurred at the Merrimack collaborative, where agency officials have been accused of using collaborative credit cards for country club outings, golf fees, and alcohol unrelated to the collaborative’s legitimate activities.

“The governor has indicated that he is going to file a piece of legislation that will address the concerns of students and the concerns of taxpayers and eliminate the possibility that this will ever happen again,’’ Reville said in an interview.

The controversy swirling around the collaboratives erupted in June, when state Inspector General Gregory W. Sullivan’s year-long investigation into the Merrimack collaborative accused Barranco of fleecing the agency by orchestrating exclusive agreements with a separate nonprofit called the Merrimack Education Center. Those deals, Sullivan said, required the collaborative to make inflated payments to the center for rent and other services, in violation of the state’s open bidding law.

Sullivan also accused Barranco of allowing some employees of the private center to improperly enhance their state pensions by listing them as employees of the collaborative, which is a public agency funded by local school districts.

The center’s board of directors fired Barranco last week, three months after he had taken an unpaid leave of absence in the aftermath of Sullivan’s inquiry.

Sullivan’s findings triggered the ongoing federal grand jury inquiry as well as investigations by five additional state agencies, including the State Ethics Commission and the offices of Attorney General Martha Coakley and Auditor Suzanne M. Bump.

Last month, Bump released an audit of the Merrimack collaborative that showed agency officials may have misspent more than $30 million in public funds.

She also released critical audits of two additional collaboratives - and said her predecessor had found problems at three more - and called on state officials to address what she described as a pattern of inflated salaries, pension abuse, and other financial proprieties.

“These common findings are indicative of a system that’s lacking in standards and oversight and is easily manipulated by folks who are not putting the interests of taxpayers and special-needs kids first,’’ Bump said at the time.

Yesterday, Bump called the vote by the state board of education “a big step forward’’ and said she will make similar recommendations at this morning’s hearing by the Legislature’s Joint Committee on Education.

Bump also praised House members for approving a so-called follow-the-money-bill on Monday that would increase her watchdog powers by allowing her to audit the use of state funds by any organization, whether it is a government agency, a nonprofit group, a for-profit vendor, or a private subcontractor.

The proposed legislation, Bump said, would have allowed her to look more deeply into the finances of the Merrimack collaborative.

The recommendations approved by the state board of education also included:

■Authorizing the board to issue regulations on collaborative governance and operations.

■Requiring the collaboratives to adhere to the same licensing requirements as public school districts.

■Prohibiting collaboratives from providing social services and job training to adults.

■Improving reporting of educational testing for collaborative students.

■Providing more funding and staff for the board to increase oversight of the collaboratives.

James Vaznis of the Globe Staff contributed to this report. Michael Rezendes can be reached at rezendes@globe.com. Follow him on Twitter @RezGlobe.