School might have to pay back $300,000

Minster Local Schools may have to pay back more than $300,000 to the federal government for the illegal operation of a former community school.

Superintendent Gayl Ray and Treasurer Laura Klosterman learned during a meeting in Columbus this week the district will have to pay back $255,000, along with the possibility of $11,000 in fines and $48,000 in interest.

"We don't have anything in writing at this time," Ray told The Daily Standard this morning. "The matter of interest and fines remains in negotiation."

Also present at the meeting were Michelle Heyer, an assistant district attorney from Cleveland; Gary Pawlak, who headed the U.S. Department of Education audit; and Jennifer Stiff, an attorney with Scott, Scriven & Warhoff, which represents the school district.

Ray objects to the amount of interest owed because she said she attempted to get the amount due on numerous occasions. Each time the answer was the same - the completed report was on an assistant district attorney's desk in Cleveland, she said. The federal audit of the former community school was conducted nearly two years ago.

"I don't think the amount of interest is fair," she added. "We tried to get the information, but it was not available."

Upon completion of negotiations, the settlement will be brought before the school board for approval. Ray is hopeful the money can be paid back over a period of time to lessen its impact on already strained school district finances.

"I'm glad this matter is finally moving toward closure," she stated. "This has been hanging over us for far too long."

The wrongdoing apparently centers on the community school using federal and state grant money, but existing only on paper and not as a separate entity. The district returned unspent grant dollars after the program closed.

Ray expressed concern about the community school when she joined the district five years ago. Closure became her first decision and board of education members concurred.

The Minster Community School officially opened during the 2004-2005 school year and remained open through the first half of the following school year.

Halver Belcher, who was superintendent at the time, wrote in an April 2004 newsletter that the goal of the community school was to "generate funds for the operation of our schools from sources that are not normally available to public school districts." He also termed the arrangement as a "conversion school."

According to Belcher, the advantage of creating the school was to receive grant money that could be used to purchase supplies, equipment, teacher-in-service and other items to benefit all students of the district.

"These funds will help offset costs to our taxpayers," he added in the newsletter. "Our students and parents do not stand to lose anything ... Basically, this is a paper issue."

The community school reportedly underwent three separate audits by the state auditor's office and the state department of education with favorable responses and recommendations to continue. Another audit was conducted in the months following closure.

Anonymous complaints filed with the U.S. Department of Education apparently prompted the February 2008 federal audit, although neither auditors nor federal officials have identified the sources.