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Financial missteps alleged at superintendent’s hearing

By CNHT | November 12, 2008

November 12, 2008
Union Leader

NORTHWOOD – About 100 residents of Northwood, Nottingham and Strafford crowded into the Northwood Elementary School gym last night for a hearing on the termination of Judith McGann as superintendent of SAU 44.

McGann is appealing the Joint School Board’s decision to terminate her employment on Sept. 3. According to RSA 91:A, she has the right to appeal her dismissal in a public hearing.

The joint board heard her appeal last night and will issue a written decision within 30 days.

Ed Kaplan and Beth Catenza, attorneys from Sulloway and Hollis, represented the SAU and joint board, while Andru Volinsky represented McGann.

According to Kaplan, McGann was terminated for “a number of issues,” but he and the joint board chose to focus on allegations of financial mismanagement.

According to Kaplan, McGann’s alleged financial missteps included:

– Creating “hidden” bank accounts with money from grant funding and using it to award stipends and bonuses to employees without board approval.

– Keeping a letter from auditors Vachon, Clukay and Co., stating that the firm had found $190,000 unaccounted for, from the board.

– Never telling the board that a 2007 audit found the SAU finances “in disrepair” and “unauditable.”

John Sullivan, an auditor hired by the SAU to do an independent study of the finances, was the first witness. He confirmed the discrepancies and said there was one set of accounts outside the operating budget that was used for stipends and overtime without board approval.

According to New Hampshire law, Sullivan said, the school board is required to adopt a budget and make certain that expenditures are funded.

He said the previous auditor had found and written about “material weakness” in income controls, a warning sign for the district.

Volinsky argued that part of the discrepancies could be traced to different software packages for the three towns in the SAU.

He also objected to the fact that Sullivan hadn’t finished his audit before coming before the board in the public hearing.

The second witness, Northwood School Board chairman Colleen Pingree, described a conversation with former Business Manager Bill Tappan.

Pingree said Tappan pulled her aside after a meeting last spring and showed her a letter from the former auditors, expressing concern.

Pingree obtained a copy of the letter from Vachon, Clucket.

She remembered asking, “May I have a copy?” and being told, “Of course! It’s addressed to you.”

She read the letter, contacted the New Hampshire School Boards Association, was advised to get an attorney and then had fellow board member Janabeth Reitter help her find a firm with no prior relationship with any of the three towns.

Sulloway and Hollis was hired, she said, and the joint board had several meetings over the summer before deciding to terminate McGann.

“We did not do this lightly,” she said.

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