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This is where our money is going

Inspector General Gregory Sullivan has alleged numerous financial abuses in the state-funded Merrimack Special Education Collaborative, which coordinates special education programs among several school districts in Massachusetts.

Meanwhile, State Auditor Suzanne Bump is investigating whether the case is part of a larger pattern of abuse in the special education system in the state.   And Sullivan’s findings are being reviewed by Attorney General Martha Coakley’s office. 

While as many as three state agencies are now investigating this matter and potentially other special education contracts, it’s clear that state oversight of the special education system in Massachusetts has been lacking.  The system has allowed one man, John Barranco, to allegedly fleece taxpayers of more than $10 million.  The allegations include using a credit card for tens of thousands of dollars in personal items, gifts to a family member, and a no-show job to a lobbyst caught up in the Cognos software scandal involving former House Speaker Sal DiMasi.

We’ve just looked at the federal and state financial filings of the Merrimack Special Education Collaborative and related, nonprofit Merrimack Education Center, both of which Barranco allegedly controlled.   These two organizations are clearly interrelated in a troubling way; and, as in the cases of some other contractors we’ve looked at, state and federal records don’t appear to match up with each other regarding the salaries of Barranco and other executives of the Special Education Collaborative and Education Center. 

For instance, the federal IRS Form 990 for the Merrimack Education Center listed Barranco’s total compensation as $464,411 in FY 2009 and $525,198 in FY 2010. 

However, the state Operational Services Division listed Barranco’s total compensation as $427,909 in FY 2009 and didn’t list any compensation for him in FY 2010 on its Uniform Financial Reports on the Merrimack Special Education Collaborative.   (The OSD does not appear to have a UFR on file for the Education Center.)  Is OSD unaware that Barranco apparently received more than a half million dollars in state-funded compensation  in FY 2010?

According to the Globe, Barranco retired as executive director of the Special Education Collaborative in 2005 and appointed John Fletcher and Donna Goodell in 2007 as co-executive directors.  Both Fletcher and Goodell were listed on OSD’s UFR for the Special Education Collaborative in FY 2009 as making over $200,000 each, and in FY 2010 as making about $150,000 each.  In FY 2009, Barranco, despite his alleged retirement, was still listed on the UFR for the Collaborative as a third executive director.

The UFR and Form 990 reports raise numerous other questions about the financial accounting practices of both the Center and the Collaborative.  For instance, although the OSD uses the UFR to disallow state funds for salaries of vendor executives in excess of $143,900, the 2009 UFR for the Collaborative indicates that no funds were disallowed for the Collaborative in 2009, even though five executives of the Collaborative — including Barranco, Goodell, and Fletcher — were listed as making over the threshold amount that year.

The FY 2009 and 2010 UFRs state that the Collaborative received $24.5 million from “Massachusetts local and quasi-governmental entities” (apparently the 10 member school districts in the Merrimack Valley) in FY 2009 and $15.9 million in FY 2010.  In addition, the Collaborative received over $800,000 each year from the Department of Developmental Services. 

Senate President Therese Murray has promised to introduce legislation to increase oversight of the special education collaboratives.  But these collaboratives are only a part of the vast human services contracting industry in Massachusetts, and their alleged abuses are not unique to special education.  The entire $2.6 billion vendor system needs better oversight.

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  1. Ed
    June 24, 2011 at 3:36 pm

    Situations like this are the reason why COFAR has been asking so many questions about the salaries of executives in the complex vendor system that services people with developmental disabilities. When tax dollars are funneled through the Department of Developmental Disabilities into numerous private businesses, it is exponentially more difficult to track expenses. It is like a shell game, but the number of shells makes it impossible to keep your eye on the pea.

  2. June 29, 2011 at 8:58 pm

    Oversight isn’t merely lacking, it’s nonexistent. It starts at the federal level. The US Dept of Ed does not require sustained compliance with special education laws. They require only that noncompliance, when (if) identified, be corrected within one year. That’s it. I confirmed this with Dr. Ken Kienas, the MA liaison at the federal Office of Special Education Programs (OSEP). Bottom line: states and school districts only have to be in compliance with special education laws for one month out of every twelve. Put another way, if you have a child with special needs, it is OK with the feds if that child’s educational rights are violated for 90 percent of their public school careers. If the feds don’t care to pay attention, neither will the state. If the state doesn’t care to pay attention, neither will local school districts and their associated collaboratives. And they don’t.

    The $10m that Barranco is said to have embezzeled is peanuts. MA spends $2b on special education every year. I don’t know where it goes, but it most certainly is not being used to properly educate students with special needs. The MA Dept of Elementary and Secondary Education documents an average of 100 violations of special education law in MA schools every MONTH. Children with disabilities are failing in huge numbers, completely disproportionate to their innate abilities, because they are routinely denied the services they need to learn. So where’s the $2b being spent? Good question (that no one seems interested in answering).

    Ellen Chambers
    SPEDWatch

  3. Kevin m
    July 1, 2011 at 6:12 pm

    Please also look into why there are 7 program directors/managers and what were their salaries and bonuses , it is my understanding they too were treated to florida jaunts and Arizona trips payed by MSEC

  4. David Hart
    July 16, 2011 at 7:43 pm

    Great blog. But how does all of this time, effort and expense on the part of the writer make anything better or safer for the indviduals receiving or not receiving services. How does this blog advance the missin of COFAR???
    I agree this is great information but people are being evicted from their homes. When did we lose our prespective?

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