A lawsuit filed by two former St. Paul Public Schools employees alleges the district “misused” federal COVID-relief funds and that the employees were fired for attempting to flag these concerns, in an alleged pattern of retaliation by district administrators.
Former district chief financial officer Marie Schrul and former business systems support manager Curtis Mahanay filed the lawsuit in Ramsey County Wednesday morning.
According to the draft complaint, the district “fired Schrul and Mahanay for their whistleblowing,” and Schrul and Mahanay are bringing the lawsuit forward to hold the district “accountable for its brazen violation of state law whistleblower protections.”
The draft filing alleges the district used government COVID funding on employee bonuses and perks and toward its budget “shortfall.”
Among its claims, the complaint alleges that then-Superintendent Joe Gothard invited 300 district leaders to an invite-only party where the food trucks alone cost $10,000 in public funds.
Schrul raised concerns about misuse of funds, according to the complaint, with Gothard, who left the district in May for a job with his hometown school district in Madison, Wis. According to the filing, Gothard responded by “suggesting that Schrul get creative with her accounting” in order to “continue the questionable purchases while shifting them to the General Fund.”
The Madison Metropolitan School District where Gothard is employed as superintendent, when reached for a response from Gothard on Wednesday, responded that because the pending litigation is in another district and state, it would not have further comment.
The SPPS district does not comment on pending legal matters, according to district spokesperson Erica Wacker in an email Wednesday. All district financials are publicly available on its website, including budget reports dating back to 2008 and audited financial statements back to 2017, according to Wacker.
The district’s external auditors, Clifton Larson Allen LLP, also issued a “clean” or unmodified audit opinion of the fiscal year 2023 budget at the Oct. 22 school board meeting. This is the most favorable audit opinion a school district can receive, according to Wacker. The district received an Aa2 rating for its “solid financial position with an established track record of outperforming budgeted expectations” in its Nov. 1 credit opinion by Moody’s Investors Service, according to Wacker.
Governing policies for the district’s investments, fund balance, annuities and other financial operations are available at spps.org/about/board-of-education/board-policies-procedures.
Schrul now works for Stillwater Area Public Schools as its executive director of finance.
The complaint also alleges the district “routinely retaliates against employees who speak out against its unlawful practices,” either with termination or other actions. Examples included in the complaint allege concerns of sexual harassment or racial discrimination, assault by students, or “neglect of special education students,” brought by employees who were then allegedly terminated or forced out of their positions in retaliation.
Schrul worked for the district from 1998 until September 2022. She started as an accountant before eventually becoming controller and then the district’s chief financial officer.
Mahanay worked for the district from 2016 to September 2022 and was recruited and hired by Schrul to help modernize the district’s financial record-keeping and analysis, according to the complaint.
Schrul and Mahanay are represented by J. Ashwin Madia, according to the complaint. Madia represented former SPPS teacher Aaron Benner who said St. Paul Public Schools retaliated against him for criticizing the district’s racial equity policy and accepted a $525,000 settlement from the district in 2019.