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DA INVESTIGATES HANDLING OF FEDERAL GRANT

Erie County District Attorney Frank Clark is investigating a possible irregularity in the way an $800,000 federal grant has been handled in the Buffalo School District.

Confirmation of the district attorney's involvement came late Thursday afternoon, just three hours after the Buffalo Board of Education convened an emergency meeting to discuss the investigation. The board is already securing documents dealing with its grants operations, which the district attorney has started to subpoena.

"I have spoken with (board President) Paul Buchanan, and we have discussed what could be an irregularity in one of the grants," Clark said. "We have agreed to take a look at that, and will be working with people in the school district. I am not willing to say yet it involves criminal conduct."

School Superintendent James Harris -- who has been openly looking for a new job since the board told him in August that his contract would not be renewed -- said he did not attend the special meeting Thursday. However, he was seen walking into the meeting about 1:30 p.m. Thursday, and then walking out about a minute later.

Reached at his home Thursday night and asked about the investigation, Harris said: "I don't know anything about this. I don't have any comment on this. You get accusations about things periodically in a big organization like this. Anything that happens, we have a procedure to investigate it."

The School Board can vote to exclude the superintendent from any board meeting. When asked if the board voted Thursday to exclude Harris, At Large Member Donald Van Every -- chairman of the board's Budget and Audit Committee -- replied, "I have no comment."

Clark would not disclose what grant is involved in the investigation. However, the grant discussed at Thursday's emergency board meeting is the federal Title VI grant, an $800,000 allocation that allows the district tremendous discretion in determining how to use the money. The grant could be used to hire a specialist teacher to work with students needing extra help in a subject, for example, or it could be used for staff development.

Eight of the nine board members were at Thursday's meeting, and Ferry District member Florence Johnson, who was unable to attend in person, participated through a telephone conference-call hookup.

The board voted unanimously during the closed-door meeting to:

Hire an independent auditor.

Have Rajni Shah, the district's associate superintendent for finance, "preserve all records pertaining to grants."

Make sure that all reporting and administration of the Title VI grant is handled by the district's grants office and appropriate staff. Board members would not elaborate on that directive, or discuss who other than "appropriate staff" might be handling a grant.

Buchanan quickly noted Thursday that Shah, who became the district's chief financial administrator in September, is not the subject of the investigation. It was Shah, in fact, who approached Buchanan on Tuesday to discuss "possible wrongdoing" involving the grant, Buchanan said.

Buchanan and Shah then went to Corporation Counsel Michael Risman, who advised them to contact Clark.

"We're cooperating fully with the district attorney," Buchanan said. "We have moved expeditiously to secure all documents that could be related to the investigation. I'm committed to following this wherever it goes."

Shah was hired as the district's finance officer after four months as assistant superintendent in the finance department. He succeeded Barbara Fargo, who resigned rather than face board disciplinary charges for the district's failure to file timely reimbursement applications with the state for what eventually amounted to $9.6 million in special-education expenditures.

Harris briefly resigned last spring when threatened with board disciplinary action for his role in the matter, then rescinded his resignation. The board never took any action against him.

Shah, who came to Buffalo with a statewide reputation for expertise in school finance, was charged with reorganizing the district's fiscal management. A state audit of the district completed earlier this year sharply criticized the district's financial division, saying it had little accountability and exercised poor control over its myriad functions.

State Assemblyman Sam Hoyt, D-Buffalo, who has pushed for legislation that would give the city greater oversight of the district's finance division, said he and other members of the Legislature's Western Delegation were called by board leaders and advised of the investigation.

"This issue, I think, accentuates the need for greater fiscal controls in the Buffalo schools," Hoyt said.

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