The latest lawsuit against the Nampa School District contains some explosive allegations. The cash-strapped district is accused of fraudulent use of federal dollars and funding classroom paraprofessionals instead of helping disadvantaged students, as the federal Title I law requires.

And less than three weeks after he was named the Nampa School District’s interim superintendent, Pete Koehler finds himself named in the wrongful termination lawsuit. According to Dianna Ruettgers, a former district budget analyst, Koehler said in meetings that he didn’t want to go through preapprovals and didn’t want to be told how the district could spend Title I dollars. The lawsuit attributes this quote to Koehler: “Screw the auditors. The feds won’t take our money away.” (The Idaho Press-Tribune has the lawsuit posted on its website, and here’s a link to it.)

In an interview with Idaho Education News Wednesday, Koehler said he doesn’t recall making the comment.

“Sometimes I get excited and say things,” Koehler said. “(But) I don’t remember it if I did.”

But Koehler also says the issue is moot. As principal of Nampa High School at the time, Koehler said he had no jurisdiction over Title I spending; those decisions were made at the district level.

Koehler said he was surprised to be named in the lawsuit — since, as a principal, he was not involved in district-level personnel decisions. Ruettgers said she was wrongfully fired in December, and denied her rights under the Family Medical Leave Act, after raising questions about the Title I spending.

The district doesn’t normally discuss personnel matters, spokeswoman Allison Westfall said, and has no response to the wrongful termination allegation.

But since news of the May 30 lawsuit broke, the district has been responding to the Title I allegations. The state Education Department had withheld more than $5.1 million in federal funds over compliance issues, but the district now has full access to the money, Westfall said.

The district also referred reporters back to a Feb. 8 news release on the federal funding issue. Here it is, in full:

Today, the Nampa School District submitted its federal Consolidated Plan for 2012-13 to the Idaho State Department of Education.

Since November, the district has been working with the state to bring the district into compliance with federal requirements after it was notified it could not access about $645,000 in federal funds from 2011-12. In addition, the district could not access about $4.5 million in federal funds for the current school year until it submitted its 2012-13 Consolidated Plan. 

At the January Board of Trustees meeting, Superintendent Tom Michaelson updated the board on the status of the district’s federal funds and that most of 2011-12’s remaining funds had been released to the district to spend after working with the state. Also at that meeting, Dr. Michaelson introduced the district’s new Federal Programs Administrator Earnie Lewis, a veteran administrator, who joined the district in January.

“We appreciate the State Department of Education working side by side with the district as we ensure the district is fully compliant,” Dr. Michaelson said.

The delay in accessing the federal funds has not impacted services to students and is not part of the district’s overall general fund deficit. Schools are waiting to use federal funds for professional development and other activities while the compliance issues are addressed.

The 2011-12 compliance issues occurred in August after the district announced it would shift allowable costs such as teacher salaries to federal funding sources in order to free up general funds. The shifts were announced as part of the district’s initial plan to address its deficit in August. Because those expenditures were not part of its approved Consolidated Plan for 2011-12, the district was out of compliance and required to correct reports and submit documentation to the state.

Once the 2011-12 issues were addressed, the district could move forward with completing its Consolidated Plan for 2012-13 so it could access its funds for the current school year. Completing the plan was delayed in part by the mid-year departure of two administrators, one who retired and another who accepted a new job out of the district.

Coming Thursday: Read more from Idaho Education News’ interview with Koehler.