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Boston Globe - State audit critical of education nonprofit
By Travis Andersen, Globe Staff - 4/15/2010

A nonprofit serving dozens of school districts in Massachusetts might have misappropriated funds in the last three years and did not always use licensed staff, according to a report this week from the state auditor's office.

The Education Cooperative, a Dedham-based group that gets funding from 16 member school districts, runs special education classrooms in those districts and two alternative schools, and offers vocational training for students and professional development for teachers, among other services, according to the audit. Most services are available to member and nonmember districts alike, the audit says.

Auditors found that between fiscal years 2007 and 2009, the cooperative racked up $334,000 in "questionable expenditures," including $59,267 for food, alcohol, and meeting expenses during superintendent retreats at a Cape Cod resort and at other functions, and $148,933 in compensation for the group's executive director and other staffers that "appeared to be excessive."

According to the audit, the cooperative spent $28,135 on superintendent retreats in mid-May 2007 and 2008 at the Ocean Edge Resort and Club in Brewster, including $1,263 for alcohol in 2008, in violation of state guidelines for education groups.

"Although there was a minor training component to these retreats, the majority of the expenses incurred appear to be for food, lodging, and entertainment," the audit states. The report does not name superintendents who attended and notes that the cooperative made a $3,000 deposit to the resort in 2009.

Valerie Spriggs, superintendent of the Dover-Sherborn school district, a cooperative member, said that she attended a Cape retreat last year but alcohol was not served. "This is a stellar organization," she said.

The audit also found that the director from 2003 to 2009, John P. Connolly, paid himself about $44,520 for not enrolling in the group's health insurance. A call to a number listed for Connolly was not returned last night.

The audit said the group charged excessive fees to school districts over a multiyear period, taking in more than $1.4 million in profits as of June 2008, and called that inconsistent with state guidelines for education cooperatives.

And at least 29 educators did not meet licensing requirements for teaching, the audit said.

"In some cases [cooperative] employees were simply not licensed," the report states.

Nancy Sullivan, the cooperative's executive director, could not be reached for comment last night. But the cooperative provided responses to the auditors that appeared in the report.

As for reimbursements for Connolly opting out of the health plan, the group said the board approved that measure last December, although the payments started in 2003, the audit said.

As for the more than $1.4 million in profits cited as of June 2008, the group noted that the surplus was "unusually high for this organization" but said it is facing a $400,000 deficit in fiscal 2010, due in part to sporadic enrollment in its special needs programs and other offerings.

The cooperative added that the superintendents who attended the Cape retreats later paid for the alcohol with personal funds and alcohol is no longer served "in accordance with state law."

In addition, the cooperative said, all teachers working for the group are fully licensed or have an approved state waiver.