St. Joseph School District rated "poor" in financial audit
February 18, 2015
By Sam Zeff
The beleaguered St. Joseph School District in Missouri learned just how bad its policies and procedures were when a long-anticipated report was released on February 17, 2015, by the Missouri State Auditor.
Much of the 53-page report confirms what Ballotpedia has been reporting for months: a widespread lack of financial control.
Over the years, the number of stipends used to secretly enhance the salaries of administrators has ballooned. Nepotism is a serious problem. The financial picture is perilous for the 18th-largest school district in Missouri, which serves some 11,000 students.
The audit makes clear, though, that the situation is even worse than many expected.
"When you look at the total number of findings it’s very high," says Missouri Auditor Thomas Schweich (R).
The audit report draws gasps
Schweich, who’s running for the Republican nomination for governor in 2016, drew gasps from the audience of about 250 people gathered in a new elementary school that opened just this school year. He was talking about stipends unapproved and unknown to the school board.
"But also the total number of dollars involved in that stipend system," says Schweich. "$25 million over eight years. Maybe $40 million over 14 years. That’s a staggering amount of money."
The gasps grew louder when Schweich suggested the practice of secret stipends was traced back 14 years to 2000. Just last year, according to the audit, the district handed out $3.8 million in stipends.
Schweich rated the district’s performance as "poor." St. Joseph is the only Missouri school district to be rated that low by the state auditor’s office.
"I was shocked," says Tom Pankiewicz, who taught in the district for 30 years. "It was so devastating the amount of money that’s been wasted over the years. It’s sad."
Last year, the district cut $3 million from its budget. Some staff was laid off. Schweich suggested the district’s financial health would be better if the stipends didn’t exist. He called them a district slush fund.
All of the district’s current problems, including a Federal Bureau of Investigation probe and subpoenas from a federal grand jury in Kansas City, can be traced back to last spring when it was revealed that Superintendent Dr. Fred Czerwonka handed out $5,000 stipends to 54 top administrators without board approval.
Czerwonka quickly picked up a nickname: The Candy Man.
Those secret payments were uncovered by school board member Chris Danford, who called for Czerwonka to step down last year. Over the past year, she has said, she’s lost long-time friends because of her outspoken opposition to the stipends and other district procedures. She says the state audit report is a vindication.
"I have felt like I was the crazy red-head board member who was making a big deal about things because I’ve been treated that way," says Danford, after the audit was released.
Audit condemns administrators
The audit took two top administrators to task for stipends that added thousands of dollars to their compensation without board approval and for other expenses charged to the district.
Czerwonka, according to the audit, received $6,000 over his $190,000 salary for having a graduate degree. Such a degree was a requirement for the job. The stipend, says the audit, was not included in Czerwonka’s contract.
The audit also questioned Czerwonka’s $500 monthly car allowance and why the district paid for his wife Wendy, who also works for the district, to attend a superintendent’s conference last year in Tampa.
The compensation of the district’s chief operating officer, Rick Hartigan, also was questioned in the audit.
Hartigan’s base salary last year was $97,700, but he received an additional $35,343 in stipends for being on the superintendent’s council, night duty, longevity and for something simply labeled "additional." Schweich says nobody in the district could explain what "additional" meant.
None of the additional money was approved by the school board.
Hartigan was also criticized for spending more than $3,400 on remodeling his office, including the purchase of a $1,500 painting.
Both Hartigan and Czerwonka were placed on paid administrative leave three weeks ago after the board reviewed a draft of the state auditor’s report.
Hartigan has said he's done nothing wrong and claimed at a hastily-called news conference a week ago that the board had humiliated him.
Czerwonka has not commented.
Nepotism problem cited
The auditor also told the crowd that nepotism is a problem in the district.
He says Human Resources Director Doug Flowers has had a direct role in approving employment-related actions for his wife. Tammy Flowers runs the district’s preschool program. Both Tammy Flowers and Wendy Czerwonka received controversial promotions and raises last year. Both women, according to district sources, were recently interviewed by the FBI in their district offices.
The audit says the district "has not established adequate policies and procedures for the hiring, supervising and tracking of related employees."
One other family with long ties to the district was also singled out in the report.
Dr. Dan Colgan, a city native, was St. Joseph’s superintendent for 14 years. After he retired, he was elected to the school board and spent a term as its president. He is still on the board.
The audit criticized the district for providing him with medical insurance for life when Colgan retired in 2005. Last year, according to the audit, the district paid $4,600 for Colgan’s insurance.
Colgan’s son, Mark, manages the district’s warehouse. Last year, he was promoted and given a $16,226 raise. The audit says no documentation detailing Mark Colgan’s additional duties was created. The position requires a master’s degree, and Colgan does not have one.
Ballotpedia confirmed last year that even though Mark Colgan supervises the warehouse, his office is actually two miles away in the district’s maintenance shop.
Long-term effects on student education
All of this, says board member Chris Danford, has hurt the district’s students.
"We stopped doing field trips," she says. "We don’t have textbooks for everyone. We have larger classes. I mean, we could have done so much more for our students. They don’t get those years back."
The audit also says the district has too many no-bid contracts, does not have an adequate system for tracking district property such as cell phones and tablets, and has too many employees with credit cards.
Many at the meeting say now that all these problems are out in the open, perhaps they’ll get fixed.
But there are many issues still to be resolved.
The district is fighting a slander and wrongful termination lawsuit brought by Chief Financial Officer Beau Musser. District officials accused him of sexual misconduct, an accusation later found to be false.
The FBI continues to attend all school board meetings and met with the state auditor's office as the report was being prepared.
Most importantly, part of the district’s property tax levy sunsets this year and the district stands to lose $6.5 million if it is not renewed. A poll commissioned by the district shows little support for renewing the tax. The audit report from the state will make it harder to convince voters to say yes.
Sam Zeff covers education for KCUR in Kansas City, Missouri. He's won a National News Emmy for investigative reporting, four National Headliner Awards and four Edward R. Murrow awards. Zeff has managed newsrooms in Minneapolis, St. Louis and Kansas City. He was educated at the University of Kansas.
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