Auditor wants takeover of special-needs agency

She recommends outside receiver

August 10, 2011|By Michael Rezendes, Globe Staff

Bump found collaborative officials racked up $4.3 million in credit card…

State Auditor Suzanne M. Bump called yesterday for the appointment of an outside receiver to take control of an embattled public agency for special-needs children after her office found that more than $30 million may have been spent inappropriately - three times as much public money as earlier reports have estimated.

Bump’s auditors found that the Merrimack Special Education Collaborative; its longtime leader, John B. Barranco; and others spent inappropriately on salaries, inflated rents, and pension fraud, as well as luxuries such as alcohol, golf fees, and country club outings.

A draft of her report, a copy of which was obtained by the Globe from a source outside the auditor’s office, also said that collaborative officials actively obstructed her investigation, preventing her from talking to some employees and, in one instance, failing to turn over documentation for $2.5 million in expenses.

In a letter to Education Commissioner Mitchell D. Chester, Bump said that her audit of the Billerica-based collaborative found such serious lapses in “governance, management, accountability and transparency’’ that an immediate state takeover is called for.

“It is clear to me that nothing less than [state] controlled receivership of this entity will provide the governance and fiscal controls necessary at this juncture,’’ Bump wrote in the Aug. 9 letter, which was also obtained by the Globe.

Bump’s letter follows accusations by the state inspector general that Barranco siphoned more than $10 million in taxpayer money from the collaborative to a related nonprofit organization, where he used the money to cover inflated salaries and benefits for himself, a former girlfriend, and a circle of associates.

Thomas E. Lent, a lawyer representing the collaborative, declined to respond to Bump’s call for an outside receiver or the specific findings in her audit, pointing out that the collaborative has until Thursday to respond formally.

However, Lent said that six of the collaborative’s 10 directors were named within the past year and that the board has been seeking to address criticisms leveled by Gregory W. Sullivan, state inspector general, as well as Bump.

“The current members of the board of the collaborative do appreciate the efforts made by the office of the state auditor,’’ Lent said. “They have already been working on several recommendations made within her report and intend to respond to the draft audit as invited.’’

The lawyer representing Barranco had declined to return recent telephone calls from the Globe.

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