School Chief Under Fire for Extra Pay from Nonprofit

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December 5, 2010; Source: Omaha World-Herald | We can understand in these trying economic times that some people have to work two jobs to make ends meet. But that’s hardly the explanation for why the superintendent of schools in Bellevue, Neb., John Deegan earns $260,000 a year from his day job and another $84,000 in salary for running a nonprofit on the side that does business with the district. And he’s not the only district employee collecting an additional paycheck from the same nonprofit.

According to the Omaha World-Herald, at least two other district staff members are on the payroll of the Military Impacted Schools Association, a nonprofit that the paper says administers millions of dollars in federal funds to offset the costs of educating children from military families. The group, known as MISA, has been operating out of the school district’s offices—with approval of the board—since its formation in 1986. Deegan had been MISA’s executive director since 1993, and continued holding that position even though he was named superintendent four years later.

Yet, up until recently, no one on the board questioned his role at MISA, or even asked if he was being compensated. It’s only because of queries from a new board member that Deegan’s extra pay came to light this year. According to MISA’s most recently available tax filings, Deegan receveived $84,000 in salary from 2007 to 2008 and again the following year. Others on MISA’s payroll are the district’s communications director, who earned $76,000 for serving as treasurer over the same two-year period, and Deegan’s longtime secretary, who earned $10,500 between 2007 and 2009 as the group’s secretary.

The records also suggest this was lavish pay for all three positions, especially Deegan who only worked an average of nine hours a week. Board member Nina Wolford, who is responsible for bringing the pay issue to the public’s attention, calls the findings “troublesome.” She claims the pay has been “hidden from the majority of the board for a very long time.”

In his defense, Deegan said the pay was justified because of many meetings he had to attend in his capacity as MISA’s head. At least two board members who were aware of Deegan’s continuing role with MISA say they thought, at most, he was reimbursed for travel costs. An investigation is now under way to see if Deegan and other school officials are in breech of district policy for taking pay from the nonprofit while serving as public employees.

Among those who think Deegan is in violation of district rules is Mike Foley, the state auditor. “This is not someone working a second job at McDonald’s, flipping burgers. This is a guy moonlighting while on the job,” said Foley. “He is incurring this extra pay on the school district’s time and property, and using school district resources to run this organization, and I think he ought to pay this compensation back to the school district.”—Bruce Trachtenberg