Otter aide cites payment error

BOISE – A top aide to Gov. Butch Otter says a former State Board of Education director violated accounting standards, exacerbating a testing-contract fiasco that left the agency millions of dollars in the red.

The former director, Karen McGee, lasted less than five months on the job before quitting Sept. 12.

A review of hundreds of e-mails related to the budget crisis shows McGee last July authorized a payment to Minnesota-based Data Recognition Corp. for services in fiscal year 2007 – even though the money had been set aside by lawmakers for use in 2008.

Wayne Hammon, Otter’s budget chief, wrote in an internal Nov. 14 memo to Otter that McGee’s move saddled her agency with a $1.4 million deficit. The Board of Education was forced last month to cancel the ninth-grade Idaho Standards Achievement Test in early December to remedy the budget shortfall.

“This large payment made early in the fiscal year set them on a road of no return,” Hammon told the governor. Paying for 2007 services with money from another year will likely mean the Board of Education – overseen by eight trustees – will be censured during a Legislative Services audit due next month, he added.

McGee is a policy adviser for Otter but has been shifted off education issues.

“I wish I had done a better job with the finances,” McGee said, adding that she made the payment based on staff assurances it was appropriate. “My heart is still with ninth-grade testing, for the students’ sake. But Wayne was right, I was wrong. I should have checked with” the Division of Financial Management.

Lawmakers now aware of McGee’s out-of-year payment say they would have stopped it had they known.

“It certainly raised concerns,” said Sen. Dean Cameron, R-Rupert and budget committee chairman.

Students must pass the ISAT test to graduate.

Without the ninth-grade test, students and teachers now won’t get a chance to assess their performance a year before the test counts.

The crisis over the tests began in December 2006, when former Board of Education Director Dwight Johnson decided to continue assessments for second- and ninth-graders in a new ISAT testing contract with Data Recognition Corp., in addition to the third-through-eighth-grade and 10th-grade tests required by the federal No Child Left Behind Act.

“The federal grant did not cover … all of the costs from the second- and ninth-grade tests,” Johnson said. “So if we wanted to continue the tests, we needed state resources.”

Johnson said he had assurances the money was forthcoming. But the 2007 Legislature refused to go along after Otter didn’t support paying the extra costs.

In May, Johnson resigned just as the budget crisis was brewing.

McGee, a former Board of Education trustee, was named interim director.

Two months later, in July, McGee approved the Data Recognition Corp. bills from 2007 with her agency’s 2008 appropriation.