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OFFICIAL SUSPENDED IN PROBE OF GRANT

Sheila Johnson-Moore, a project administrator for the Buffalo Public Schools, has been suspended with pay in connection with possible irregularities in the handling of an $800,000 federal grant, sources said Friday.

In addition, they said the grant under investigation is one of the few -- if not the only one -- received by the district that is managed by just two people -- Johnson-Moore and Superintendent James A. Harris. The Buffalo school district receives about $80 million a year in grants.

When school officials uncovered the irregularities earlier this week, control of the grant was transferred to the district's finance department, said School Board President Paul Buchanan.

Does that indicate that Harris is or might be under investigation?

"We're going to take it one step at a time," Buchanan said Friday. "We're not going to speculate at this time."

Harris could not be reached to comment Friday.

Thursday, he 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 in August told Harris his contract would not be renewed, and he is seeking a new job.

Johnson-Moore was placed on administrative leave and will continue to be paid until the case is resolved. She receives an annual salary estimated at about $60,000. Despite several attempts Friday, she could not be reached to comment.

Erie County District Attorney Frank Clark confirmed Thursday that he will investigate a federal grant that gives the district wide leeway in how the money is spent. Buchanan and Rajni Shah, the school district's associate superintendent for finance, approached Clark after Shah discovered possible wrongdoing.

There were these other developments Friday:

Buchanan said he -- at the board's direction -- expects to hire a forensic accountant to conduct an internal investigation within about a week. The accountant will have a specialty in cases involving embezzlement, fraud, forgery and other white-collar crimes.

"This is not somebody you hire to do your tax returns or a financial statement," Buchanan said.

At the direction of Clark's office, the School Board has gathered financial records going back several years. "If those records are needed, they're available and secure," Buchanan said.

Assemblyman Sam Hoyt, D-Buffalo, said he will push for state legislation giving the Buffalo comptroller the authority to audit the financial records of the Buffalo schools. Although that bill failed last year, Hoyt said he is optimistic it will become law.

"I was given every assurance that it will be given a priority," Hoyt said. The state is now the only outside agency that audits the city schools, he said.

Anthony Palano, president of the Buffalo Council of Supervisors and Administrators, said the union is not yet actively involved in Johnson-Moore's case.

"There's really nothing we can do until the investigation is completed," he said. "At this point we don't have all the facts."

Hoyt praised the quick response by Buchanan, Shah and the School Board but described the investigation as a setback in efforts to build trust in the city schools.

"Some people say we need a new convention center or waterfront development," Hoyt said. "But until we restore confidence in the public school system this city will never, ever turn itself around."

Buchanan said the School Board's handling of the situation is evidence that it will not tolerate possible wrongdoing or misuse of funds.

"We have moved with much more speed and decisiveness than the Board of Education has shown in years," he said.

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