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Claremont School District facing $320,000 in fines from IRS



Valley News Correspondent
Wednesday, June 12, 2019

CLAREMONT — It has been a costly 12 months for the Claremont School District.

The district is being fined $320,000 by the Internal Revenue Service for failure to comply with requirements under the Affordable Care Act, the school administration said Wednesday. It’s the most recent incident in a string of bad financial news.

SAU 6 Acting Superintendent Cory LeClair said in a news release that half of the fine was for failure to meet filing requirements and the other half was because the district did not provide full-time employees with “certain forms and information as required by the Affordable Care Act.”

LeClair said further investigation by the administration and SAU 6 school boards of Claremont and Unity determined that Mike O’Neill, the district’s former director of business and finance, was to blame.

“The SAU 6 Director of Business and Finance is responsible for assuring that the SAU and the school districts are in compliance with IRS reporting requirements,” the news release said. “Mr. Michael O’Neil, who was the director during the relevant time period, is no longer employed by SAU 6.”

Contacted by phone Wednesday evening, O’Neill declined to comment. It is not clear if he resigned or was fired.

The SAU also said it has hired legal counsel and will seek a waiver of the fines. It’s unclear at this time how much that will cost.

“We are hopeful that the IRS will recognize that there is no public benefit to diverting local tax dollars intended to fund the education of Claremont and Unity students to pay a federal government penalty,” LeClair said.

News of the fines comes just a couple of months after the SAU told the public the district failed to file on time for federal reimbursement of the National School Lunch Program.

“This is the second time this year that the SAU 6 Board has informed this community about a significant error that has resulted in a financial loss,” LeClair said. “Neither of these incidents should have happened. The checks and balances that were in place to oversee the districts’ finances were simply not adequate to identify these problems.”

For the school year 2017-18, the combined loss of the reimbursement for Claremont and Unity of the National School Lunch Program was $203,308, and for the current school year, the loss was almost $264,000.

Last June, the SAU board forced out Superintendent Middleton McGoodwin and agreed to pay him six months severance, or about $65,000, and also cover his health insurance for a year.

More recently, interim Superintendent Keith Pfeifer was paid $11,000 through May 11 after he resigned at the end of March. In mid-February, an incident at the SAU office involving Pfeifer required a police presence. No charges were filed.

LeClair, who will become the new superintendent of the Plainfield and Cornish school districts on July 1, said finance responsibilities are now being handled by staff at the SAU and the search for a new finance director has begun. Futhermore, an accounting firm will be hired to ensure accurate filings with the IRS.

She promised greater oversight of the district’s finances as Mike Tempesta gets ready to begin as the new superintendent on July 1.

“We are also determined to do everything possible to minimize the impact that these errors may have on the community,” LeClair said.

Patrick O’Grady can be reached at pogclmt@gmail.com.