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Workers Overpaid As Schools Face Deficit

December 14, 2018 GMT

LOWELL -- While the school district struggled to remedy an over $2 million hole in its budget, administrators reviewing district finances discovered some employees were being overpaid.

Attorneys representing the schools have recouped about $15,000 from employees overpaid in the last few years, though that figure is only a tiny fraction of the district’s overall deficit, according to Interim Assistant Superintendent of Finance Billie Jo Turner.

The district is working with law enforcement to seek payment from a fifth who has left the district and now lives out-of-state, she said. According to Turner, the full amount in this case is still under investigation, but is “significantly higher” than the other four.

The overpayments are a result of attendance databases that were not maintained and a lack of internal controls between the central office and schools, according to Turner. She said the district believes the overpayment was a mistake and does not suspect wrongdoing on the part of the employees who received the money.

Turner said the issues that caused these overpayments have been addressed, re-establishing procedures that were once in place, but not in use in recent years. The district has implemented a system of checks and balances, she said.

“Once we identify an issue, we correct it,” she said. “We immediately implement internal controls to prevent it from happening again.”

Mayor William Samaras said the issues leading to the overpayments -- discovered after former Superintendent Salah Khelfaoui was placed on paid administrative leave -- include incorrect compensation related to the record keeping of degrees and experience. Employees on leave were also overpaid, he said.

The former employee that attorneys are still trying to recoup payments from continued to receive compensation after they left the district, according to Samaras.

James P. Hall, an attorney representing the schools, said he could not comment on the issue as it was a personnel matter, but confirmed his office has sent out letters to employees and received funds.

According to Turner, the problems that led to these overpayments were unrelated to the discovery last month that the district was missing $50,000 or more from a student activities fund. The employee suspected of taking the money was placed on administrative leave on Nov. 27 and was no longer employed by the district by the end of the week, though it’s unclear whether the employee was terminated or resigned.

The Sun learned a clerk working for the district’s central office and later Sullivan Middle School, Karen Brekalis, is a suspect in the case. The case is still under investigation, according to the Lowell Police Department.

In an email following this discovery, Acting Superintendent Jeannine Durkin said the district is re-establishing past procedures and internal checks to avoid future losses.

According to Turner, the employee’s position was bonded and the district is working with an insurance agency to recoup the loss.

These discoveries occurred amid a backdrop of administrative overturn and budget concerns.

In February, the district’s then-head of human resources Anne Sheehy asked to transfer back to a teaching position shortly after she was written up by former Assistant Superintendent of Finance Gary Frisch for an argument between the two.

The previous year, The Sun reported numerous principals had grown frustrated with the department she headed, which sources said was behind schedule and slow to respond to phone calls. An audit of the human resources department, returned to the School Committee last week, spotlighted the district’s slow hiring process and teacher diversity gap.

Sue Mulligan, principal of Shaughnessy Elementary School, took on Sheehy’s duties, but declined an offer to continue in the position past October when she retired from the district.

Since then, the position has remained vacant and was included in a hiring freeze instituted by the district the same month.

On July 8, Frisch left Lowell for a similar chief financial officer position in Gloucester.

Ten days later, the School Committee narrowly voted to start the process of terminating Superintendent Salah Khelfaoui, which a still-split committee finalized on Nov. 14.

A review of the budget by Turner during this period found a $2.48 million deficit, even after the district received an additional $2.2 million in unbudgeted revenue. Though some School Committee members have questioned this figure, describing it as inflated, the committee has worked toward closing this hole during recent meetings.

This fall, the district also agreed to a four-year plan to pay back $2.1 million in improperly charged expenses to the food services account discovered in a state audit. A third-party audit of the budget requested by the committee is expected to be released Friday.

Though a letter drafted during executive session listing the formal reasons for Khelfaoui’s termination has not been released publicly, committee members who opposed the superintendent’s continued employment cited financial and management concerns.

Samaras said the superintendent is ultimately responsible for district finances, including payroll. Other positions like the assistant superintendent of finance and city auditor are “tools” to understand the budget, he said.

“We’re talking about money. We’re talking about payrolls,” he said. “There’s no magic to it.”

He said people should be asking “who’s really responsible” to ensure district finances are in order.

“It should have been asked before,” Samaras said.

Calls to Khelfaoui and Frisch were not immediately returned Thursday.

Follow Elizabeth Dobbins on Twitter @ElizDobbins