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Bill boosts oversight of special education

Lawmakers work to prevent abuses alleged in Billerica

Against the backdrop of federal and state corruption investigations, the Massachusetts House unanimously approved legislation yesterday designed to increase oversight of the state’s troubled network of 30 educational collaboratives, which serve more than 8,000 special needs students.

The bill, which follows Senate approval of a similar measure, stems from last year’s scandal surrounding the Billerica-based Merrimack Special Education Collaborative, in which John B. Barranco, its former executive director, stands accused of transferring $11.5 million to a related nonprofit and using the funds to cover lavish salaries for himself, a former girlfriend, and a close circle of associates.

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“This puts in place a new governance structure, new reporting requirements, and new requirements for transparency that are designed to prevent the kind of abuses that took place with Merrimack,’’ said state Representative Alice Hanlon Peisch, a Wellesley Democrat and the House chairwoman of the Joint Committee on Education.

The bill approved yesterday, a version of which legislators expect Governor Deval Patrick to sign, would require the Department of Elementary and Secondary Education to name a voting member to each of the collaborative’s board of directors. It would also require all collaboratives to undergo an annual financial audit.

In a move aimed directly at abuses allegedly uncovered at the Merrimack collaborative, the legislation would bar any employee of an educational collaborative from working at a related nonprofit or for-profit organization. It would also prohibit collaborative board members and their executive directors from simultaneously serving as board members, executive directors, or employees of related nonprofit or for-profit groups.

Last June, Inspector General Gregory W. Sullivan accused Barranco of transferring $11.5 million from the Merrimack collaborative to a nonprofit that he controlled, the Chelmsford-based Merrimack Education Center, and using the money for excessive salaries and perks, including $50,000 in personal expenses and Kentucky Derby tickets.

In addition, State Auditor Suzanne M. Bump found evidence that the Merrimack collaborative misspent more than $30 million in public funds. And she found a pattern of lax accounting practices and questionable compensation at other collaboratives.

The collaboratives are consortiums of local school districts that band together to reduce the cost of educating students with mental, physical, medical, and behavioral disabilities.

In August, the Globe reported that federal prosecutors are conducting a wide-ranging inquiry into spending and accounting practices at the Merrimack collaborative.

The Globe also reported that the collaborative has been the subject of several additional investigations by state agencies and officials, including state Attorney General Martha Coakley and state Treasurer Steven Grossman, who are investigating possible abuses of the state pension system.

Sullivan discovered last year that Barranco hired some individuals to work for the nonprofit education center but listed them on the payroll of the collaborative, a public agency, allowing those individuals to enhance the value of their public pensions.

Yesterday, Senate President Therese Murray, Democrat of Plymouth, said legislators moved swiftly to prevent additional abuses like those at the Merrimack collaborative, in part because of longstanding concern about the high cost of educating special needs students.

“One thing we get cautioned about all the time by school superintendents and mayors is the high cost of special education,’’ Murray said. “With Merrimack, you had more than $10 million diverted from students with special needs to people who lined their pockets. It’s pretty outrageous.’’

Murray said the House bill approved yesterday is so similar to a Senate bill approved earlier this month that legislators could do away with naming a conference committee and instead sort out minor differences informally before sending a final version to Patrick. Murray expects the governor to sign the measure.

Yesterday, Bump lauded the Legislature for taking swift action. “It’s terrific to have such a determined response by the Legislature in such short order,’’ she said.

Stephen J. Theall, executive director of the Massachusetts Organization of Educational Collaboratives, an umbrella group of collaboratives, also praised the bills approved by the House and Senate.

“These reforms will greatly enhance collaboratives’ ability to achieve their core mission of bringing quality education to special needs students throughout Massachusetts, all while saving taxpayers millions of dollars by pooling school district resources,’’ he said.

Michael Rezendes can be reached at rezendes@globe.com. Follow him on Twitter @RezGlobe.

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