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Massachusetts Special Education Funds Misspent, Auditor Calls For Collaborative Reform

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Massachusetts' state auditor is calling for sweeping reform of oversight and financial accountability for the state's 30 special education agencies after her office found that several of the collaboratives had misused millions of public dollars.

An audit of the Merrimack Special Education Collaborative, READS Collaborative and the Southeastern Massachusetts Education Collaborative by State Auditor Suzanne Bump revealed patterns of lavish spending and salaries, conflicts of interest and overall systemic problems in standards, oversight and accountability.

The agencies provide educational tools and services for special needs students to 32 school districts across the state, serving about 8,500 students, according to the Office of the State Auditor. The three audited agencies collectively earn $31 million annually.

"The pervasive deficiencies we have seen in this small sampling of the 30 different collaboratives lead us to conclude that this is a broken system," Bump said in a statement Wednesday.

The most egregious agency was the Merrimack Special Education Collaborative, which auditors found to have spent $26.7 million in "inadequately documented and potentially unallowable expenses," according to the auditor's report. By contrast, MSEC's budget for the most recent fiscal year was around $19.8 million.

From the report:

We also identified almost $6.1 million in inadequately documented salary expenses at MSEC and over $4.3 million in additional expenses that were either undocumented or appeared to be unallowable because they were for non-business related items such as alcohol, golf, and meals and entertainment.

More specifically, the report notes that the agency had illegally spent at least $1,255 on alcohol, $18,284 on meals and entertainment, $142 for 30 pounds of swordfish for a special education directors cookout, numerous purchases totaling $5,735 for golf-related charges, and $4,576 on vehicle expenses like gasoline "for what appears to be a personal vehicle"

There was also evidence of noncompliance with public bidding, finance and pension laws, among others.

The MSEC is led by director John B. Barranco, who was first being investigated in June for allegedly siphoning $10 million of the agency's public funds for private spending like luxury apparel and vacation home renovations.

The READS Collaborative was found to have overpaid its executive director by as much as $118,072, allocated over $1.2 million in questionable administrative spending and offering a $944,000 loan that was charged to school districts for hundreds of thousands of dollars in fees, according to Bump's report.

Auditors found improperly authorized payments of $53,063 by the Southeastern Massachusetts Education Collaborative, and much of the agency's revenue was generated through contracts for adult health services, detracting from the funds being appropriated toward child education.

The state's policies for governing the collaboratives are outdated, and one hasn't been revised since 1988, according to The Boston Globe.

"The conduct and practices uncovered by these audits are, in many instances, nothing less than stealing from children with special needs and we fully support prosecution where appropriate," State Senate President Therese Murray and State House Speaker Robert DeLeo said in a joint statement. "It is clear that significant legislative response is needed to ensure oversight of these organizations."

The auditor's office is pushing for clearly defined guidelines for how the agencies can allocate and spend their public funds. Bump wants the Department of Elementary and Secondary Education, lawmakers, oversight agencies and school officials to work to prevent collaborative funding misuse. Among the recommendations:

  • Clearly define permissible activities and services the agencies can provide
  • Increase the Department of Elementary and Secondary Education's financial and programmatic monitoring
  • Limit how much surplus money collaboratives can retain, and return the rest to school districts
  • Require regular financial reporting and audits
  • Revise the composition of collaborative boards to ensure proper governance

“Parents of special needs students shouldn’t have to worry if their children are getting all the help that was intended with the creation of these regional agencies,” Bump said in the Wednesday statement. “All of the stakeholders—state and local governments, school officials, families and advocates—must work together to fundamentally change the collaborative system and realize the full potential of service and savings collaboratives can and should provide.”

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