Two former employees of Saint Paul Public Schools are alleging “misuse” and “misappropriation” of a substantial amount of federal COVID-19 relief dollars under the direction of their former supervisor, Superintendent Joe Gothard.
Gothard was hired in February to lead the Madison Metropolitan School District.
Former Saint Paul Public Schools Chief Financial Officer Marie Schrul and former Business Systems Analyst Curtis Mahanay filed a 54-page whistleblower lawsuit against the Minnesota school district last month in Minnesota District Court.
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“The District has lost its way,” the lawsuit says. “Instead of putting students and community member taxpayers first, it now exists to serve and protect adult administrators.”
MMSD spokesperson Ian Folger said the district is aware of the lawsuit.
“Because this is pending litigation in another district and state, MMSD will have no further comment,” Folger said in an email.
Representatives of the Saint Paul School District could not immediately be reached for comment.
The lawsuit targets the school district and Gothard is not named as a party in the suit. But the complaint alleges Gothard played a “budgetary shell game” in Saint Paul and used COVID funds to fill budget shortfalls.
“Mahanay and Schrul understood that the District’s shell game was illegal,” the lawsuit states. “They objected and made clear that the District’s plans violated the law. As members of the district’s finance team, they refused to be part of it and wouldn’t allow the district to carry out its plans.”
As a result, the two were fired, according to the lawsuit.
“Schrul and Mahanay insisted on following the law and focusing on the students over administrators,” the lawsuit alleges. “Their mission endlessly frustrated Superintendent Gothard and his leadership team.”
The lawsuit claims Gothard, at one point, used taxpayer funds to throw a party for 300 invited school district employees, the cost including $10,000 for food trucks alone.
Schrul worked for the district from 1998 through 2022, starting as an accountant and rising to the position of chief financial officer.
Mahanay worked for the district from 2016 through 2022 as the business systems support manager.
Like many urban school districts across the country, Saint Paul schools struggle with reading and math proficiency and declining enrollment.
Because school funding largely depends on enrollment, the district’s budget crisis continued to worsen, according to the lawsuit.
Saint Paul schools receive an average of $20,192 per pupil, compared to the statewide average of approximately $15,730 per student.
“But the district is reckless in its spending priorities — choosing to reward administrators with bonuses, perks, and high-priced virtue-signaling initiatives, while neglecting its students who feel unsafe in school and remain unable to read or add at grade level,” the lawsuit says.
Mahanay and Schrul allege Gothard used COVID funds to pay employees for work they were not doing and to buy gifts for employees.
The money was also used in the district’s “ongoing shell game of papering over its budget deficits,” the lawsuit says.
“Specifically, the district transferred massive amounts of general fund expenses to COVID funds – functionally adding the COVID funds to the district’s bottom line, and making it incredibly difficult to track how the COVID funds are spent.”
Mahanay and Schrul are seeking damages including back pay, front pay and emotional distress. They are asking for a jury trial.
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