Pa. accuses school agency of pension violations

A state investigation of a Chester County regional educational agency found thousands of dollars in improper payments - from the former director's pension to wine and golf-club purchases - calling a pattern of lax financial and administrative oversight "deeply disturbing."

A blistering report released today by state Auditor General Jack Wagner concluded that the Chester County Intermediate Unit "improperly circumvented state pension rules" by paying its former executive director, John K. Baillie, for six months while he also collected $79,083 in pension benefits.

The intermediate unit is one of 29 such agencies established by the state in 1971, according to its website. Working with the state Department of Education and local school districts, it provides services such as special and technical education that are more affordable when offered regionally.

Baillie could not be reached for comment, but Joseph J. O'Brien, the unit's director since 2007, said remedial action was taken in August 2008, immediately after receiving a draft report of the probe.

"It's painful, but it's old news," O'Brien said, adding that the auditor general had commended the intermediate unit for acting quickly to make recommended changes.

The report said Baillie retired on Friday, Jan. 5, 2007, and returned to work on Monday, Jan. 8, 2007. State pension law permits a retiree collecting a pension to return to work "only in an emergency in which no qualified replacement can be found."

In April 2007, the Public School Employees' Retirement System began a probe after receiving an anonymous e-mail about Baillie's postretirement employment and ordered him to repay the nearly $80,000. Baillie appealed the decision to Commonwealth Court, the report said, which concluded in April that Baillie's retirement was "phony" and orchestrated to increase his pension payout.

The intermediate unit also improperly spent $12,750 on items such as 20 cases of wine from an out-of-state liquor store, $1,600 for a set of golf clubs for a retiring worker, and $704.25 for a holiday lunch gathering of 35, the report said.

O'Brien said the cost of the wine, used at a 2006 fund-raiser, was reimbursed by a donor; however, an employee made the purchase on a company credit card; similarly, he said employees footed the bill for their holiday lunch, which was also put on a company card.

That practice is no longer possible since the cards are no longer in use, O'Brien said. He said Baillie paid $1,500 to the CCIU after the auditor general pointed out that employee recognition gifts cannot exceed $100. Emergency hires have also been discontinued, he said.