Jerome Tharaud
Havre Daily News
jtharaud@havredailynews.com
Two area Hutterite colonies say the state Office of Public Instruction broke state law in its handling of a dispute involving tens of thousands of federal education dollars, and that there was a conflict of interest when OPI's chief legal counsel presided over a hearing about the dispute.
Rick Bartos, the attorney representing the East End and Hilldale colonies in the dispute, made the allegations in a legal brief sent to the U.S. Department of Education late last week.
OPI's chief legal counsel said Monday the brief's allegations are unfounded.
At issue is at least $60,000 in Title I funds the colonies say they were shorted by Havre Public Schools between 1992 and 1995, $18,450 they say they spent documenting the error, and an unspecified amount of educational services for former students who were denied services as a result of an error the colonies say dates back to 1980.
Title I funds are federal dollars allocated every year to help students in public and private schools who are both poor and determined to be two years or more below grade level. Title I funds are not paid directly to schools, but are used to provide services like additional teachers, paraprofessionals and educational materials.
The colonies run their own private schools, but HPS administers Title I funds for them.
The state Office of Public Instruction found last August that HPS shorted the colonies about $116,600 worth of federally funded education services between 1995 and 2001. At a hearing in October, the colonies asked OPI to extend its investigation of the withheld funds prior to 1995. When OPI refused, the colonies filed an a appeal with the U.S. Department of Education in November. They accused OPI of violating state law but did not go into detail in the appeal.
OPI responded to the colonies' complaint with a brief of its own in February. It said the October hearing did not violate hearing procedures specified by state law, and that OPI did not ignore evidence demonstrating that more funds had been withheld from the colonies than OPI's initial decision indicated. It also said OPI had no authority to reimburse the colonies for time spent documenting the error, or to award compensatory educational services to former students.
In the latest brief, Bartos alleged that that OPI's chief legal counsel, Cathy Warhank, had a conflict of interest in presiding over the hearing; that the October hearing denied the colonies due process; and that the hearing was invalid because OPI did not comply with procedures outlined in the Montana Administrative Procedure Act.
For Warhank to preside over the hearing was an inherent conflict of interest, the brief said, because HPS Superintendent Kirk Miller is also the chair of the State Board of Public Education. OPI and the Board of Public Education have "numerous common interests," it said.
"There is an inherent conflict of interest when the OPI administrative staff sits in judgment on federal monetary issues that ... may be adverse to a member of the Board of Public Education who will sit in judgment on issues affecting the interest of OPI," the brief said.
An administrative law judge should have presided over the hearing instead of Warhank, it said.
Warhank disagreed.
"We were perfectly within the law in exercising the option of using an agency hearing officer," she said, adding that she was hired by OPI last summer and listened with an open mind. "We all felt that it was not at all improper."
Miller said today he had not received a copy of the brief and could not comment.
The brief said that according to state law, colonies should have been allowed to call witnesses, cross-examine OPI and HPS personnel, and get subpoenas to require HPS officials to attend the hearing. The colonies should have been allowed to ask for copies of documents from HPS and OPI pertaining to the case before the hearing, it said.
"OPI's failure to adopt and comport with basic procedural due rules denies the Colonies schools, and for that matter, any private school student in Montana to a realistic opportunity to ascertain fiscal records in the sole possession of the public school," the brief said.
Warhank said the documents that the colonies wanted were public information, so subpoenas and discovery motions were not necessary.
The Montana Administrative Procedures Act specifies that state agencies like OPI must follow strict standards of public notification and public comment when adopting their use, the brief said. Bartos argued that the handbook that lays out OPI's hearing procedure was not adopted according to those standards and is therefore invalid.
Warhank said that the law Bartos cited in the brief did not apply to OPI's hearing because it only applies to hearings involving contested cases.
HPS agreed to abide by whatever OPI determined to be fair, she said, so it was not a contested case and did not fall under the Montana Administrative Procedures Act.
In January Miller said the district had paid off the entire amount it owed to East End Colony and still owed Hilldale Colony $11,314.
The brief said HPS still owes East End Colony $8,441 for both the 1992-1993 and 1993-1994 school years, and $9,750 for the 1994-1995 school year. It also said HPS still owes Hilldale colony $11,010 for both the 1992-1993 and 1993-1994 school years, and $12,090 for the 1994-1995 school year.
Hilldale Colony did not apply for Title I dollars during those years, but that was because it was told by Havre Public Schools that the colony school would get only about $300 a year in Title I funds, Bartos said in a previous interview.
Warhank said that because there was no statute of limitations by law, it was up to OPI to determine how far back it would go.
"The review period was reasonable," she said. "We felt it was reasonable and in fact it was more generous than the (U.S. Department of Education) would have been."
Virginia Berg, education program specialist at the U.S. Department of Education, said Monday she had not yet received the brief. She would not comment on when a decision will be made or who will make it.
Joe Waldner, school administrator of East End Colony School, said today he received the brief but has not had time to read it.
Dave Kleinsasser, school administrator of Hilldale Colony School, said Monday he had received it, but declined to comment.
