Superintendent Johnson reacts to Hoey’s theft of district funds

Beginnings

Arraigned on charges of larceny and embezzlement, budget officer Christopher Hoey has spent the past week (as of publication) in custody on $100,000 bail after allegedly stealing between $200,000 and $400,000 of district funds to fuel his drug addiction.

Superintendent Christine Johnson’s report of financial discrepancies to town police and later to the Office of Worcester County District Attorney Joseph D. Early Jr. led to a swift arraignment at the Westborough District Court Thursday, March 3.

“The local law enforcers in Northborough and Southborough were phenomenal to work with,” Johnson said in an exclusive interview. “That was my first outreach, and then I reached out to the District Attorney. There’s been a lot of great collaboration with them.”

Hoey faces “charges of larceny over $250 by common scheme, embezzlement by a public official and uttering,” according to a letter from Johnson to the school community sent out on the day of his arraignment.

Hoey could not be reached for comment.

Johnson, who said she does not “usually go to an arraignment,” took notice of the speed and organization in calling Hoey before the court to answer to the charges.

“It’s really procedural,” Johnson explained. “The charges are shared, the alleged criminal is brought in, the findings are read, and the judge makes a determination. In this case, the judge made the determination that [Hoey] would not be released on the amount that was initially suggested by the defense attorney, and the judge upheld the $100,000 bond for his release to happen.”

“I said to someone this morning that it was a week ago he was arraigned, and it feels as if it was about six months ago,” Johnson said. “There has been so much rapid activity.”
Meanwhile, Johnson said that there will be all new precautionary measures to prevent future fraud, and that the district learn the most they can from the ordeal.

“I feel like I’m an elephant charging down the road to try and move us forward and wanting to bring back the confidence that we’re doing everything we can to address this unfortunate situation, which no one wants to go through,” Johnson said.

According to a letter from Johnson to the school community sent out the day of the arraignment, the District Attorney’s office “immediately assumed a lead role in the investigation.”

“The intent was to release a press release sooner, even when we just knew something had happened,” Johnson said. “But in talking with the State Police, they asked that I not do that… there was only probably a day and a half delay in that, but [while] I was ready to move, they respectfully requested we delay, and I agreed because I wanted to make sure that I didn’t come out with anything that was going to hinder their ability to make an arrest.”

Magnitude of stolen funds, impact

Although The Worcester Telegram reported that Hoey allegedly embezzled district funds through fraudulent checks and self-estimated the amount stolen as between $200,000 and $400,000, Johnson herself has yet to release any numbers regarding the magnitude of funds missing from district accounts.

“I felt that if I’m going to come out with a number and state that number, it needs to be accurate,” Johnson said. “It needs to be vetted and factual. The number released in court was a number that they released based on whatever preliminary conversations they may or may not have had, which I’m not privy to.”

Johnson declined to confirm the fiscal approximations released in court. She also declined comment on the question of whether or not the budget officer is supposed to run checks by a superior, stating that it was “a personnel matter.”

“I’m not trying to be evasive; I’m trying to be factual,” Johnson said. “That’s my responsibility.”

Johnson indicated that the potential for recovery of the lost funds through insurance, or via other unnamed sources, remains entirely plausible.

“We’re cautiously optimistic that any monies that may have been lost in this experience, specifically in FY16 [fiscal year 2016; budget for the following school year], will be recaptured, because we’re aggressively working with our insurance providers–we do have insurance–and also with other sources of potential recovery,” Johnson said.
Johnson believes the robbery will not impact students’ experiences.

“There is no indication…that there is any impact on students continuing to experience and enjoy what they always have as a student here in our school district: activities, courses,” Johnson said. “For you as a student there’s no impact identified, and any conversations or thoughts that students might have about, ‘Oh, we’re not going be able to have this club or this course’–people imagine all kinds of things when specific information can’t be shared. There’s absolutely no indication that that is going to be impacted.”

Johnson declined comment on what portions of the district budget may be impacted if the lost funds cannot be recovered.

Plan, recovery

The district’s plan for recovery involves investigation and third-party support. Johnson’s multi-fold plan began with hiring a forensic auditor, who began combing through financial information and records on March 2.

“He will look at everything that has to do with this incident but also look at our practices, so we can begin to improve what we do, identify gaps and potential vulnerabilities,” Johnson said.

The forensic auditor was hired with the assistance of the District’s legal counsel, and is, according to Johnson, “experienced with school-related fraud.”

Johnson hopes that by working with several trusted and knowledgeable entities in the surrounding area, she’ll be able to obtain the most thorough understanding she can of the full extent of the damage to the accounts, the prospects of recovering the lost funds, and how to prevent a similar situation from occurring again.

“In addition to the forensic auditor we have in…we’ve gone to our financial institutions for information, and we’re trying to work very closely with them,” Johnson said. “The State Police is doing the same, so we’re going into every piece of detail and data that we can. I’ve hired someone from M.A.S.B.O., which is the Massachusetts Association of School Business Officials, and I actually [got] the former Executive Director, [who is] very well-known by all in the world of education, to come in and to provide oversight of our daily financial transactions, of our operations.”

The certified M.A.S.B.O. employee will be completing a full, intensive financial operations review over the course of three, possibly non-consecutive days, beginning the week of March 14.

“They will be interviewing everyone and looking at everything that has to do with financial procedures, cash management, and just general finance and business operations,” Johnson explained. “This is something that I’m going to recommend we do every five to seven years, just as a matter of routine practice.”

While Hoey’s alleged crimes had a negative net-impact, Johnson believes the new precautionary standards being set in place for the district will help to protect accounts and prevent any sort of fraud or embezzlement from reoccurring.

“In the end, we will be the most financially efficient, effective business operational entity of just about any district,” Johnson said. “All of this is designed to again make sure that we’re doing all that we can to do the best that we can.”

Johnson expressed that involved parties must continue to deal with the investigation at more personal levels.

“Everyone looks back and sort of questions themselves over and over again, which I think is a natural occurrence after something like this has happened,” Johnson said. “In any situation that’s not positive, people try to gain solace by suggesting that maybe there’s something that they could have done or saw or observed, and I don’t think it’s unique to a fraud or embezzlement. If anything bad happens, the natural inclination is to say, ‘Oh, what could I have done?’ That’s just part of the healing process.”

Johnson and her team of officials, office members, the financial auditor, the M.A.S.B.O. employee, and other workers and supporters she has christened “the task force,” continue to move forward and set in place procedures to prevent the repetition of fraud.

“I really appreciate the support of everyone who has been involved in this, and the good will that we’ve received, and the confidence that everyone has that we’re addressing this situation,” Johnson said with a smile. “Through difficult times comes results, and that’s what we’re hoping for.”