Metro

Dorchester charter school overpaid leader nearly $100,000, state says

Trustees at the Helen Y. Davis Leadership Academy charter school in Dorchester lavished its former executive director with hefty pay increases and other perks, including an overpayment of nearly $100,000 as she departed for retirement, the state Inspector General’s Office announced Thursday.

Between 2011 and 2017, trustees more than doubled Karmala Sherwood’s base salary and gave her no-cost health insurance, a benefit that no other employee received at the middle school, which serves 200 students.

In her final year on the job in 2017, Sherwood walked away with $380,000 in salary, benefits, and payouts, representing 11.3 percent of the school’s budget, the investigation found, noting that she continues to work for the school as an $80,000-a-year consultant.

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“While the board did not act in bad faith, it did not act in the school’s best interest with respect to Ms. Sherwood’s sick leave, compensation package, or consulting arrangement,” according to a letter the Inspector General’s Office sent to trustees and state education officials on Thursday.

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The findings come as Davis Leadership Academy is already on shaky ground with state Board of Elementary and Secondary Education, which placed it on probation earlier this year due to low student achievement and allegations of improper spending, including a questionable payout to Sherwood for 130 unused sick days valued at $117,000.

Meanwhile, the school’s academic performance has deteriorated further. Scores on most MCAS exams last spring, which were released in September, declined notably from the previous year. In English, for instance, just 9 percent of eighth graders met expectations compared to 35 percent the previous year.

The state Auditor’s Office is also reviewing the school’s finances, and a report is expected to be released in the coming months.

The state Department of Elementary and Secondary Education, which asked the state Inspector General and Auditor to investigate, is reviewing the findings, said Jacqueline Reis, a state education spokeswoman.

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“We’ll look at it with an eye toward helping all schools operate with careful governance and financial practices,” she said.

She noted the school is working on academic improvement plans and is taking other steps to meet the conditions to be moved out of probation, such as routinely filing financial statements and trustee board meeting minutes.

Davis has until December 2019 to turn itself into an academic success or it could face closure.

Sherwood and trustee chairman, Kevin Tarpley, could not be reached immediately for comment Thursday night.

In his letter, Inspector General Glenn Cunha made a number of recommendations to state education officials, such as urging them to provide guidance to all charter school trustees statewide on how to properly evaluate and compensate school leaders and policies pertaining to sick time payouts.

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As for Davis, Cunha instructed trustees to more closely monitor and document their executive director’s job performance and attendance and develop criteria that keeps compensation in line with what leaders at other similar size schools make.

‘While the board did not act in bad faith, it did not act in the school’s best interest.’

Inspector General Glenn Cunha, in a letter sent to the Davis board of trustees 

Sherwood started at Davis Leadership Academy when it opened in 2003, serving first as an instructional leader. She was later was promoted to principal and then executive director in 2006. She confronted a firestorm from some parents who called for her ouster in 2012 after she enacted mid-year budget cuts that forced out some beloved staff members.

For years, Sherwood’s contract prohibited her from carrying over unused sick time, but in 2016 trustees dropped that provision and the contract was silent on the issue. A year later, as Sherwood, retired she cashed out $117,000 for 130 days of unused sick time.

But the Inspector General’s Office contends that trustees should have never paid Sherwood for any unused sick time prior to her contract change in 2016, resulting in an overpayment of $99,629.

Complicating matters further is that Sherwood never reported her sick leave time to the school, making it impossible to determine how much pay she was entitled to for unused sick time. Staff told investigators that Sherwood did not maintain a regular 40-hour work week in the building.

“They said that on most days, Ms. Sherwood worked at the school for a few hours and also ran errands or attended external meetings,” the letter stated. “Some staff reported that when Ms. Sherwood did not come to school, they did not know whether she was working from home or taking a sick or vacation day.”

Investigators ultimately uncovered e-mails from Sherwood that she stayed home sick on occasion.

“Overall, the board’s failure to fulfill its fiduciary duty resulted in a significant overpayment to Ms. Sherwood and a misuse of taxpayer funds,” the letter stated. “Few individuals working a full-time, year-round schedule are able to work fourteen years without staying home sick, attending a doctor’s appointment, or caring for an ill family member.”

The Inspector General’s Office said trustees could have made use of Sherwood’s lavish payouts on programs to support students, noting that in 2017 the school recorded a $100,000 deficit.

The investigation also faulted Tarpley, chairman of the trustees, for mischaracterizing the payment. He said the board decided to reinstate the unused sick time, but investigators found the board never made such a vote. Tarpley’s statement, according to the letter, appeared “to be an attempt to deflect scrutiny of the payment.”

The investigation also found Sherwood’s salary grew from $100,000 in 2007 to $235,485 in her final year — a boost that increased her yearly payout under the state’s public pension system. On top of that, the school gave her another $23,000 toward a 403(b) retirement fund for her in 2017 and gave her nearly $10,000 for unused vacation time.

Sherwood ultimately became one of the highest paid charter school leaders in the state, according to the investigation.

James Vaznis can be reached at james.vaznis@globe.com. Follow him on Twitter @globevaznis.