FINDINGS OF FACT AND CONCLUSIONS CONCERNING COMPLAINT OF ANN O'CONNELL

1. On April 21 , 2009, Ann O'Connell, Director of Special Programs for Willamette

Education Service District, filed a complaint against her direct supervisor, Superintendent Maureen

Casey, alleging that Superintendent Casey violated Board Policy GBNAJJFCF while acting as

Director O'Connell's supervisor. Generally, the complaint states:

Over the last three years Dr. Casey has supervised me while I worked in the same building with her and her behavior toward me has become increasingly negative and intent on degrading and belittling me. I contend that Dr. Casey has created a hostile work environment for me as her subordinate and made my job as director impossible.

Director O'Connell also alleges that she is held to a higher standard of performance than

other directors within the organization, indicating unfair and differential treatment.

2. Willamette ESD Policy GBNAJJFCF was most recently adopted by the Board of

Directors on August 12, 2008, and provides, in pertinent part:

Hazing/HarassmentlIntimidationIBullying/Menacing

The Board is committed to providing a positive and productive learning and working environment. Hazing, harassment, intimidation, menacing or bullying including cyberbullying by students, staff or third parties is strictly prohibited and shall not be tolerated in the ESD.

* * *

Staff whose behavior is found to be in violation of this policy will be subject to discipline, up to and including dismissal.

* * *

Staff will be reported to Teacher Standards and Practices Commission, as provided by OAR 584-020-0041.

The Superintendent is directed to develop administrative regulations to implement this policy. Regulations shall include descriptions of prohibited conduct, reporting and investigative procedures, as needed, and provisions to ensure notice of this policy is provided to students, staff and third parties.

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3. Willamette ESD Policy GBNAllFCF-AR is the administrative rule interpreting

Policy GBNA, and was adopted by the Board of Directors July 12, 2005, when the Board adopted a

previous version of Policy GBNAlJFCF. The GBNAlJFCF-AR administrative rule has not been

updated to be consistent with the August 2008 policy revision. This administrative rule provides, in

pertinent part:

Hazing/HarassmentlIntimidationlBullying/Menacing Complaint Procedures

The following definitions and procedures shall be used for reporting, investigating and resolving complaints of hazing, harassment, intimidation, bullying and menacing.

Defmitions

* * *

5. "Harassment, intimidation or bullying" means any act that substantially interferes with a student's educational benefits, opportunities or performance, that takes place on or immediately adjacent to school grounds, any school-sponsored activity, on school-provided transportation or at any official school bus stop, and that has the effect of:

a. Physically harming a student or damaging a student's property;

b. Knowingly placing a student in reasonable fear of physical harm to the student or damage to the student's property;

c. Creating a hostile educational environment.

"Harassment" also includes, but is not limited to, any act which subjects an individual or group to unwanted, abusive behavior of a nonverbal, verbal, written or physical nature on the basis of age, race, religion, color, national origin, disability, marital status, sexual orientation, physical characteristic, cultural background, socioeconomic status or geographic location.

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"Intimidation" also includes, but is not limited to, any threat or act intended to tamper, substantially damage or interfere with another's property, cause substantial inconvenience, subject another to offensive physical contact or inflict serious physical injury on the basis of race, color, religion, national origin or sexual orientation.

6. "Menacing" includes, but is not limited to, any act intended to place a school employee, student or third party in fear of imminent serious physical injury.

RetaliationlFalse Charges

Retaliation against any person who reports, is thought to have reported, files a complaint or otherwise participates in an investigation or inquiry is prohibited. Such retaliation shall be considered a serious violation of Board policy and independent of whether a complaint is substantiated. False charges will also be regarded as a serious offense and will result in disciplinary action or other appropriate sanctions.

Complaint Procedures

Designated ESD administrators and the Superintendent have responsibility for investigations concerning hazing, harassment, intimidation, bullying or menacing. The investigator(s) shall be a neutral party having had no involvement in the complaint presented.

* * *

All complaints will be promptly investigated in accordance with the following procedures:

Step I

Any hazing, harassment, intimidation, bullying or menacing information (complaints, rumors, etc.) shall be presented to the designated ESD administrator or Superintendent. Complaints against the building principal shall be filed with the Superintendent. Information may be presented anonymously. Complaints against the Superintendent shall be filed with the Board chair. All such information will be reduced to writing and will include the specific nature of the offense and corresponding dates.

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Step II

The district official recervmg the complaint shall promptly investigate. Parents will be notified of the nature of any complaint involving their student. The district official will arrange such meetings as may be necessary with all concerned parties within five working days after receipt of the information or complaint. The parties will have an opportunity to submit evidence and a list of witnesses. All findings related to the complaint will be reduced to writing. The district official(s) conducting the investigation shall notify the complainant and parents as appropriate, in writing, when the investigation is concluded and a decision regarding disciplinary action, as warranted, is determined.

4. WESD Policy GBM provides for staff complaints. It states, in pertinent part:

The Superintendent or designee will develop a complaint procedure which will be available for all employees who contend they have been the subject of a violation, misinterpretation, or inappropriate application of ESD personnel policies and/or administrative procedures. The complaint procedure will provide an orderly process for the consideration and resolution of problems in the application or interpretation of ESD personnel policies.

5. WESD Policy GBM-AR is the administrative rule interpreting policy GBM which

provides, in pertinent part:

Complaint Procedure - Staff

A complaint is where an employee contends that he or she has been the subject of a violation, misinterpretation, or inappropriate application of ESD policies and/or administrative procedures. A complaint may be oral or in writing, but if oral, then must be reduced in writing before proceeding with the complaint procedure. The complainant must sign the written complaint.

* * *

The procedure for a complaint is for the supervisor to review the complaint. If the supervisor is part of the complaint, then the director of the department will review the complaint. In the absence of a director, the office of the superintendent may appoint another director or the HR administrator to review the complaint.

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The complaint is to be reviewed within five agency working days after receipt in writing. If the complaint cannot be reviewed within that period, the supervisor (or director or HR administrator) may extend the period of time by giving the person filing the complaint notice of their intent to do so and the reasons supporting the extension. The extension must be for a reasonable time designated for efficient resolution of the complaint.

The fact reviewer may investigate the claim(s) of the person making the complaint up to and including interviewing any person who has information that may be relevant to resolution of the complaint. The fact reviewer is to make a written determination based on the facts. Notice of the determination shall be either hand delivered or sent to the complainant at his or her last known address.

* * *

6. The complaint by the staff member IS against the Superintendent; therefore,

pursuant to policies GBM, and GBNA, the complaint after delivery to the Deputy Superintendent as

Human Resources Administrator was delivered to the Board Chair on April 22, 2009.

The Board Chair, through the Board's legal counsel, engaged the services of an independent

fact investigator, Education Solutions, LLC, through its principal, James Buck, for the purpose of

interviewing the complainant, the accused, and any other relevant persons, including staff, to

investigate the allegations of the complaint and prepare findings and conclusions based on the facts

found.

7. The Superintendent was notified of the complaint, the engagement of the factual

investigator, and was provided a copy of the complaint. The Superintendent was also directed to

take no action that would be derogatory, disciplinary, or in any fashion retaliatory against the

complainant or any other administrator or employee of Willarnette ESD during the pendency of the

investigation or thereafter. Supervisory authority over the complainant was transferred to Deputy

Superintendent Novotney during the pendency of the investigation.

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The Superintendent was also directed to safeguard all electronically stored information and

hard copy information and documents, including the computer she used and with which she

accessed Willamette ESD records, including all email and other electronic communications; word

processing documents, spreadsheets, databases, calendars, telephone logs, contact management

information, internet usage files and network access information; as well as all hard copy files and

documents in her possession or in the possession of the District. (April 27, 2009 letter of counsel

and Board Chair)

8. Superintendent has been employed with Willamette Education Service District or

its predecessor since August 1974 in various positions, including Director of Special Programs,

Director of Regional Programs, Assistant Superintendent and Superintendent since June 2003.

9. The Superintendent is the ESD's Chief Executive Officer and has, under the

Board's direction, general supervision of all ESD programs, services, and personnel. The

Superintendent is responsible for managing the ESD under the Board's policies and is accountable

to the Board for that management. The Superintendent may delegate to other ESD personnel any

powers and duties imposed upon the Superintendent by Board policies or by vote of the Board.

Delegation of power or duty, however, will not relieve the Superintendent of responsibility for

action taken under such delegation. The Superintendent shall serve as Budget Officer of the ESD

and as Secretary of the ESD Boundary Board. (WESD Policy CB.)

10. The duties of the Superintendent include:

a. The Superintendent shall serve as a Chief Executive Officer and shall serve

the Board in all matters as a professional advisor.

h. The Superintendent shall recommend appropriate policies for the Board's

consideration and shall implement and execute all policies adopted by the

Board.

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c. The Superintendent shall keep the Board fully and accurately informed about

District programs.

d. The Superintendent shall serve as Budget Officer of the ESD.

e. The Superintendent shall serve as Secretary of the ESD Boundary Board.

f The Superintendent shall interpret the ESD needs and shall present

professional recommendations on all problems and issues considered by the

Board.

g. The Superintendent, usmg professional judgment, shall make such

assignments, reassignments and transfers as are necessary to secure the

highest staff efficiency.

h. The Superintendent shall lead the development and operation of an adequate

program of community relations.

1. The Superintendent shall participate m community activities and

professional development.

J. The Superintendent shall use great care m nominating candidates for

appointment to the staff

k. The Superintendent shall authorize the purchase of equipment and supplies

that are appropriate to the purpose and needs of ESD.

1. The Superintendent shall present for Board's consideration an annual budget

designed to serve the ESD's needs.

ill. The Superintendent shall establish and direct financial operations of the ESD

to ensure adherence to budget provisions and the wise use of funds.

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n. The Superintendent shall develop annually a salary and relay of benefits

schedule for legally designated administrative employees for Board consideration and

approval. (WESD Policy CBA)

11. The Board's legal authority is be delegated through the Superintendent to the

administrative staff as shown in the Board approved Organizational Structure Chart of the ESD.

Lines of authority on the chart represent direction of authority and responsibility. The

Superintendent may reorganize lines of authority and revise the Organizational Chart subject to

Board approval of major changes and creation or elimination of positions. The Board expects the

Superintendent to keep administrative structure current with the needs for supervision and

accountability within the ESD.

12. The Organizational Chart, adopted May 2005, shows the Superintendent as the

intermediary between the Board of Directors and all ESD employees. The Superintendent

supervises directors in the areas of Special Programs Departments, Oregon Migrant Education

Service Center, Region 16 Migrant Education Center, Business Services Department, Curriculum,

Assessment and Research Department, Communications Department and Information Services

Department.

13. The Superintendent delegated to an Assistant Superintendent supervisory duties and

responsibilities over Human Resources Department, Facilities Department, Services under SB 1149

Department, Instructional Services Department and Professional Development Services Department

which includes Driver Education, Corrections Education, Safe Schools, SMART, WWPTC,

ECHO/STARS Programs, and SLDC. The Assistant Superintendent had no oversight duties or

responsibilities over Business Services other than to approve budgets for the departments under his

delegated supervision. The Assistant Superintendent reported to the Superintendent.

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14. For the 2008-2009 fiscal year, the Organizational Chart was revised to identify the

Superintendent as the intermediary between the Board of Directors and all other staff; however, the

supervisory and reporting duties of the Superintendent included Information Services, Business

Services, Region 16 Migrant Services and Special Programs.

15. The supervisory duties of the Deputy Superintendent, Dave Novotney, included

Human Resources, Curriculum Assessment and Research, Instructional Services, Migrant

Education Service Center and Project Solutions Group. Deputy Superintendent Novotney reported

to the Superintendent, not directly to the Board. (WESD Policy CCA: Organizational Chart 2008-

2009)

16. The Board adopted a policy under which the lines of authority and responsibility

were directed through the Superintendent to establish a clear understanding of working relationships

with all staff Lines of authority were those approved by the Board as shown on the ESD

Organizational Chart. Staff is expected to refer matters requiring administrative action to the

administrator to whom they are responsible. That administrator is expected to refer such matters to

the next higher administrative authority when necessary. Additionally, all staff is expected to keep

the person to whom they are immediately responsible informed of their activities by whatever

means the person in charge deems appropriate.

Lines of authority should not restrict the cooperative working relationship of all staff

members in order to develop the best possible programs and services. In addition, the policy does

not restrict protected labor relations communications of bargaining unit members. The established

lines of authority represent direction of authority and responsibility. When staff is working

together, the lines represent avenues for a two-way flow of ideas to improve programs and

operations ofESD. (WESD Policy CCB)

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17. The Superintendent is responsible for implementing Board policies and for

interpreting them to staff, students, component school districts and the public. Other administrators

share this responsibility. Many of the Board's policies require implementing regulations. The

Superintendent is required to develop these regulations, in consultation with directors, staff

members and other persons and groups as appropriate, for submission to the Board.

Policies officially adopted by the Board and other administrative regulations formulated to

implement adopted Board policies are included in the School Board Policy Handbook. Staff and

Student-Parent Handbooks are be used for disseminating policies and regulations to persons directly

affected by them. The Board's only official policy manual will be maintained in the ESD Human

Resources office and will be available for inspection during regular business hours. Each employee

will be specifically notified of the existence and availability of personnel policies as well as the

existence, availability and location of all Board policies. Administrators are authorized to establish

rules and procedure for staff and students as long as these rules and policies are consistent with

policies and regulations established by the Board and Superintendent. * * * (WESD Policy CH)

18. The Superintendent is responsible for administering any program approved by the

Board. The ESD operates specially funded programs which must be administered in accordance

with particular federal and/or state laws and conditions of the grant. The Board, through its

approval of such programs and acceptance of funds, is ultimately responsible for these programs

although many of the regulations which govern them established by another agency. The

Superintendent is charged with the responsibility for coordinating funded projects, for

administration of grants and insuring that the various departments which operate these programs do

so within the guidelines pertaining to the particular program unless otherwise stipulated in the grant

requirements. (WESD Policy CO)

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19. Between April 29, 2009 and June 13, 2009, the factual investigator reviewed

collected information concerning the allegations by complainant in conjunction with a separate staff

complaint alleging financial improprieties and conduct by Superintendent similar to the conduct

alleged by complainant.

20. On June 25, 2009, the Superintendent was placed on paid administrative leave,

pending completion of the investigation of this complaint.

21. On August 20, 2009, a copy of the factual investigator's preliminary draft report

was provided to the Superintendent and the Board members concerning the complainant's

complaint and the companion investigation of similar issues.

22. On August 25, 2009, Superintendent Casey provided a preliminary response, which

was provided to the Board Directors.

23. On August 25,2009, the Board inquired of the factual investigator concerning his

preliminary draft findings and the responses and information provided by the Superintendent in her

preliminary response.

24. On September 15, 2009, the Superintendent provided additional responses to the

factual investigator's report and the companion investigation complaint report.

25. The preliminary factual findings of the independent factual investigator provided:

Background

WESD Policy GBNAlJFCF states in its opening paragraph: "The Board is committed to providing a positive and productive learning and working environment. Hazing, harassment, intimidation, menacing or bullying including cyberbullying by students, staff or third parties is strictly prohibited and shall not be tolerated in the ESD." Policy GBNA was readopted by the Board in August of 2008. Accompanying administrative procedures dating from 2005 were not updated, however, at that time. While the policy clearly enjoins staff from engaging in intimidation and bullying, the ARs

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only refer to student behavior. "Creating a hostile educational environment" is an effect under the section on harassment, intimidation or bullying that would relate to the allegations submitted by Ms. O'Connell. The policy language is clear, however, on the Board's intent to prohibit the same behavior, irrespective of whether it be perpetrated by students, staff, or third parties (e.g., volunteers) participating in WESD's programs.

The superintendent, as the chief executive officer of the organization, is expected to model the workplace behaviors that create the type of culture the Board would like to see throughout WESD's programs. Thus, there is at the outset a higher standard associated with the superintendent's behavior in this regard than that for other WESD employees.

As part of the investigation I interviewed four individuals that Dr. Casey requested be included. The four individuals were supervised currently or previously during their careers by Dr. Casey. They were not interviewed because they had direct knowledge regarding the specific details of the complaint but to obtain a perspective of Dr. Casey as supervisor. All of these individuals believed that Dr. Casey consistently showed professional conduct in her interactions with them. All believed Dr. Casey set high expectations and when she was direct with them or disagreed with their position on a matter, they saw the criticism as constructive and helpful in their own professional development. It is reasonable to conclude that Dr. Casey's supervisory style or behavior as alleged in this complaint has not been observed by multiple employees whom she has evaluated or supervised over the years who continue to hold her in high esteem.

Terminology:

"Workplace bullying" refers to repeated, unreasonable actions of individuals (or a group) directed towards an employee (or a group of employees) which is intended to intimidate and creates a risk to the health and safety of the employee(s). Workplace bullying often involves an abuse or misuse of power. Bullying includes behavior that intimidates, degrades, offends, or humiliates a worker, often in front of others. Bullying behavior creates feelings of defenselessness in the target and undermines an individual's right to dignity at work." (Washington BOLl Report of ApriI200S.)

With regard to intimidation or bullying, the two are used in the literature often interchangeably. OSHA emphasizes in its definition:

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"Bullying is defined by the effect of the behavior, even though there may not be a specific intent to bully." It is recognized that harassment is much more detectable while bullying is far more difficult to recognize. It should be acknowledged also that bullying is about impact and not intention. The perceptions of the person feeling bullied should not be dismissed or trivialized as researchers in this area believe happens with high regularity in the workplace.

Some actual behaviors that authorities attach to this behavior differ somewhat, but they may include the following (taken from Bureau of Labor and Industries and OSHA documents):

- Being shouted at or humiliated

-Unwarranted or invalid criticism

- Being treated differently than peers

- Exclusion or social isolation

- Blame without factual justification

- Deliberately denying access to information, consultation or

resources

-Unfair treatment in relation to accessing entitlements such as leave or training

-Unreasonably overloading a person with work

The authorities point out that bullying, unlike aggression, "is rarely a single incident and tends to be an accumulation of many small incidents, each of which, when taken in isolation and out of context, seems trivial." Authorities also tend to affirm "the person being bullied may not realize they are being bullied for weeks or months until there's a moment of enlightenment" (Tim Field's UK National Workplace Bullying Advice Line).

Findings

After an examination of the evidence presented, I find that there is sufficient merit to uphold Ms. O'Connell's complaint of intimidation or bullying that has created a hostile work environmental; however, not for all of the reasons cited by Ms. O'Connell in her formal complaint.

Ms. O'Connell indicates that she has been held to a different and higher standard than other directors. Her supervision extends, however, over the majority of employees at WESD (approximately 400) and for almost all of the instructional programs the agency offers to member districts as well as other school districts outside its boundaries. The level of budgetary oversight is enormous in her role and maintaining a balanced budget would be a typical expectation for

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an administrator, particularly in such a large and complex set of subdepartments.

Ms. O'Connell cited the difference in Dr. Casey's expectations for her regarding budget building and accounting versus that in the Technology Department. Dr. Casey inherited the Pentamation project which had been running, and continues to run, a substantial deficit. That project, however, should not set the standard for what should be tolerable at the ESD in terms of fiscal accountability. Ms. O'Connell should appreciate the unique position she holds within the organization even if it may appear at times that it is accompanied by differential treatment. In organizational departments where this proportion of resources is expended, that differential treatment or set of expectations for the director may be indeed appropriate.

Therefore, while discounting certain points of rationale submitted by Ms. O'Connell, I am finding that Dr. Casey violated district policy GBNAlJFCF for the following reasons:

1. When Ms. 0' Connell requested from Dr. Casey partial use of resources in Fund 698 in October of 2008 for the Positive Behavior Support Program she was rebuked and told that she couldn't. Dr. Casey believed the timing of the request which occurred before another meeting was awkward and that she had sufficient reason for denying the request since she believed Ms. O'Connell had sufficient resources in her budget to allow for this without tapping other funds. While there is a stark difference in how Dr. Casey and Ms. O'Connell recounted what transpired, I fmd Dr. Casey's account lacking in credibility on several key points.

When I spoke with Dr. Casey on May 15, 2009 about Fund 698, she professed to know nothing about it by fund number. I then showed her a ledger sheet of the Fund and the sources of its revenue. However, she indicated she did not know the purpose of the fund when asked, yet she could tell it was about special programs. Written and verbal communication provided by a retired business clerk stated that Dr. Casey indicated only she controlled access and expenditure of resources in Fund 698. Each administrator and business department employee I spoke with remarked on Dr. Casey's intimate knowledge of the WESD budget and her micromanagement of these funds. For her to indicate that she had no knowledge of this fund with $1.4 million over several years is simply not credible in the face of statements in which she referenced the fund number in conversations.

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Ms. O'Connell spoke with other administrators immediately following this encounter to express how troubled she was at the manner in which Dr. Casey spoke to her regarding this matter. The request should not have been a surprise to Dr. Casey because Ms. O'Connell had sent her an email previously regarding the request. What makes the rejection significant is not only the tone of the language, but the fact that Fund 698 is derived from resources that originated from programs Ms. O'Connell directs. For the superintendent to remark in a raised voice to Ms. O'Connell 'This is not your money . . . What do I have to say?" is not in keeping with communication standards expected of a supervisor to a subordinate. At this level, the interaction when examined in isolation could be considered brusque and impudent.

However, following this meeting, Dr. Casey asked Kathy Campbell how Ms. O'Connell even found out about this fund and relayed that the manner in which she rebuked her would cause her never to ask about accessing that fund again. Other administrators found that Dr. Casey could find satisfaction in bringing another person to tears in an exchange. That element transforms the communication from impudence to bullying. Dr. Casey exhibits a pattern of needing to seek control over her subordinate rather to have this person understand a situation or rationale for a response. The communication also fosters a hostile work environment by blocking an administrator from inquiring about a fund that should be rightfully accessed if not administered by Ms. O'Connell.

2. On December 10, 2008 Ms. O'Connell met with Dr. Casey regarding her evaluation. Dr. Casey commented that she had heard from another administrator that Ms. O'Connell's distinctive and loud laugh was inappropriate in various professional or official meeting situations. Dr. Casey said she would be remiss for not broaching this subject with Ms. O'Connell. The fact that the subject of the laugh was raised is not considered bullying or harassment. Dr. Casey seemed to ignore, however, Ms. O'Connell's reaction to this criticism, which was to sob. While Dr. Casey handed Ms. O'Connell a tissue when she began sobbing, she continued for more than 30 minutes to discuss this topic without considering the emotional state of Ms. O'Connell and not recognizing that Ms. O'Connell, by this time, had become hyper sensitized to Dr. Casey's criticisms given the recent history in their professional relationship. Before the end of the meeting, Ms. O'Connell felt "trapped and violated" in these circumstances. While Dr. Casey disputes the length of the meeting, Ms. O'Connell's recollection of starting and ending times and when she immediately

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departed the building afterwards were more specific and, therefore, considered more reliable.

Dr. Novotney recounted that on April 21, 2009, the day on which Ms. O'Connell filed the formal complaint, she broke down and began crying during a meeting the two of them were having with Dr. Casey. Instead of giving Ms. O'Connell time to compose herself, Dr. Casey maintained a steady pursuit of the topic until Dr. Novotney intervened. Dr. Novotney did not believe it to be appropriate that Dr. Casey exert continued pressure when someone is emotionally disintegrating. The insensitivity to Ms. O'Connell in these exchanges supports the allegation of intimidating or bullying behavior creating a hostile work environment, even if that was not the intent by Dr. Casey.

It should be noted that Ms. O'Connell has not received in this most recent evaluation period (2006-2009) any formal or written note of a performance deficiency by Dr. Casey. Her prior evaluation in 2006 found her performance meeting all the administrative standards under review. (WESD does not use a scale denoting "exceptional" or "highly proficient" as ratings, thus "meeting" is the highest ranking the evaluation form provides.)

3. In January of 2009 Ms. O'Connell began working with Dr. Novotney on a restructuring plan for her extensive department. There was recognition of the stresses the job entailed for Ms. O'Connell and that more responsibilities needed to be delegated to assistant directors as well as addressing other issues. Dr. Novotney, at

various junctures, communicated with Dr. Casey about the joint work he had been engaging in with Ms. O'Connell during this time. On the basis of their interactions, Dr. Novotney believed that Dr. Casey was supportive of the direction that the two had been developing which retained a single director over the department.

Ms. O'Connell had expected that Dr. Novotney would be meeting with her to share the plan with Dr. Casey; however, on March 20, 2009, Dr. Casey instructed that she was to come without Dr. Novotney despite his collaborative work on the restructuring plan. When Ms. O'Connell began to explain the plan that they had developed, Dr. Casey informed her that she and Ms. O'Connell "were not on the same page." She also added that Ms. O'Connell's avoidance of her was not going to work. The topic of the discussion about her laugh arose and Dr. Casey commented that she felt like she was unable to provide feedback to Ms. O'Connell. During the course of the conversation, Ms. O'Connell explained to Dr. Casey that she did

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not feel safe around her. The meeting ended with both agreeing to meet again after spring break.

Dr. Casey stated in our conversation on May 15, 2009 that she never heard Ms. O'Connell utter the statement of feeling unsafe around her. She said if she had, it would have set off warning bells of the need to intervene differently. Ms. O'Connell's recollection of the verbal exchange was very precise, however. She recalled that Dr. Casey responded to the "unsafe around you" phrase by telling her that Ms. O'Connell confronts unsafe situations all the time in her role as director.

After the break, Dr. Casey moved the meeting date from April 2 to April 1, 2009 and at that time Dr. Casey shared with her a different restructuring proposal which would essentially divide the department between two directors. Ms. O'Connell was upset at the months of effort that Dave Novotney and she had invested in the plan and asked Dr. Casey about it. Dr. Casey responded, "He doesn't speak for me . . . You should have worked with me." The nature of the comment again appears to fit a pattern of wanting control and using power rather than seeking effective resolution to a problem while at the same time cultivating trust-laden relationships.

Dr. Casey has the right under her contract to reassign administrative staff under her authority and this report does not dispute that fact nor raise any issue with her proposing a restructuring plan. The report questions the manner in which Dr. Casey approaches this right and the manner in which she conveys that information to her subordinate. The verbal exchanges that have been described indicate that Dr. Casey employed communication with Ms. O'Connell that was controlling and intimidating rather than constructive and supportive of the changes she desires. The research is very clear on the detrimental effects on work performance the element of fear instills in employees. Not only is Dr. Casey's communications at times in conflict with board policy, but this pattern is also counterproductive to an effective educational enterprise.

It should be noted that Dr. Casey stated that some of her opposition to the plan that Ms. O'Connell and Dr. Novotney had worked on was the timeframe for implementation which Dr. Casey described as targeted for fall, 2009. She saw that as too ambitious and without sufficient involvement of constituents as well as staff to ensure success. The details shared by Ms. O'Connell indicated that she purposely avoided any timeframe discussion with regard to implementation dates, concentrating instead on the purpose and overall

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realignment of responsibilities. The specificity once again of Ms. O'Connell's account compared to that of Dr. Casey causes Ms. O'Connell's recollections to be more credible.

4. Several current WESD administrators commented that they see Dr. Casey as manifesting a "Jekyll/Hyde" personality. Consistently administrators including this complainant identified periods in which Dr. Casey was very supportive. However, that was coupled with other occasions when she would "come across the table and take you out." (Comment from non-complainant.) The observed behavior was perceived by each administrator I interviewed not simply as idiosyncratic or an occasional lapse, but as a means for Dr. Casey to exercise control over her subordinates. This verbal description fits a bullying profile in the literature. When an administrator acts unpredictably or with intensity not consistent with the situational context, then trust in her judgment and in the supervisor-subordinate relationship becomes tenuous. The accompanying fear produces stress and contributes to less effectiveness on the job.

5. Another complaint was filed by a high ranking administrator almost concurrently with this complaint with allegations that Dr. Casey manifested the same type of behavior with this subordinate. The fact that two current high ranking administrators are experiencing very similar communications patterns by Dr. Casey serves to reinforce the concern that the behavior reflects not isolated instances of bullying, but a pattern of such conduct.

6. That conclusion is bolstered in a communication with a former high ranking administrator at WESD who related a very similar pattern of Dr. Casey providing strong supportive mentoring for many months, but then experiencing the relationship tum into communications that were described as creating a "hostile work environment." While this individual could not specifically identify a reason for why the professional relationship changed, it was noteworthy that it came after this person collaborated with another colleague on a project. Similar to Ms. O'Connell's report, this individual believed Dr. Casey felt slighted by not being more involved. While Dr. Casey did not use profane or vulgar language, the administrator found that communications were harsh and at times humiliating. This administrator also recalls one other employee overhearing Dr. Casey's comment to her in passing and "being mortified" at hearing what was said. The individual, consistent with other current administrators, sees Dr. Casey engaging in a practice of having a "favored child" pattern, but once you are "out of favor, you are really out."

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Conclusion

While there appears to be sufficient evidence that Dr. Casey's behaviors constitute bullying, even if that were not the conclusion, Dr. Casey has by her actions eroded the level of trust within the top echelons of the WESD organization. While not all WESD administrators hold this opinion, a majority of those in high ranking positions is consistent in its criticism of the impact of divisiveness within the administrative team that has been fostered by certain behaviors of Dr. Casey.

Trust is the fundamental attribute and "currency" for effective team functioning within an administration. While high ranking WESD administrators extol Dr. Casey's prowess and skill in meetings and in interactions with the legislature, board, community partners and constituents, they do not trust her because of her inconsistent treatment of their colleagues. Dr. Casey does not seem to recognize this perspective on her communication pattern, nor does she view her verbal remarks in the same light as they are interpreted by others. She sees herself as an indispensable leader of the ESD at a time of fiscal crisis. The literature is clear that most of those engaged in bullying do not perceive that they are having this impact upon others nor do they take responsibility for it. No current WESD administrator I spoke with indicated that Dr. Casey ever apologized for what the administrator considered a lapse in judgment or tactless action by her. That reluctance to seek amends gives further evidence that Dr. Casey may be blinded to this particular characteristic in her own performance. The unfortunate byproduct of this pattern of intimidation is diluted energy toward vital organization tasks since individuals are expending inordinate energy attempting to maintain equilibrium with their boss or simply avoiding her when possible. The Board's policy is clearly aimed at preventing such impact upon employees and upon the working relationships between supervisors and their subordinates.

26. The factual investigator interviewed 16 current or former WESD employees, most

of whom were or are Administrators supervised by Superintendent Casey, including complainant

and Superintendent Casey.

27. Superintendent Casey provided two responses to the complainant's complaint and

the investigator's complaint in conjunction with a second complaint investigation. The provisions

applicable to this complainant's complaint response included:

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Regarding the investigation report from Jim Buck, it is important to note:

o Information from all interviewees was not included in the report.

Several key points made by the individuals whose information was excluded contradicted negative statements made in the report. By failing to include this information, it has the impact of giving a false emphasis to the information in the report as well as the conclusions, rendering it neither complete nor accurate. Administrators and one former disgruntled administrator who has not worked at the ESD for three years. Four additional members of the WESD administrative team were interviewed by Mr. Buck at my request; however, their comments were not included in this summary report.

". Many of the examples provided are based on individual conflicting perceptions that cannot be corroborated.

". Additional information not included in the report involved concerns about Ms. O'Connell from a significant number of Special Programs administrators. They are indicative of the widespread nature of concerns that were emerging, not a punitive agenda on my part. These complaints necessitated feedback that was not always easy for Ms. O'Connell to accept. I believe that Ms. O'Connell's complaint against me was filed in response to my feedback to her and my expressed need for a department redesign.

o At least seven administrators reported specific concerns and issues relative to Ms. O'Connell's management, leadership and communication to Dave Novotney, both individually and in a group. Prior to the completion of Jim Buck's preliminary final report, I informed Mr. Buck and Dave Novotney the importance of this information and asked that it be included in order to provide the Board with a balanced view of the complex nature of all of the factors involved. This information, unfortunately, was not included in the preliminary final report.

).- The report attributes the investigator's conclusion to be based on " ... a tnajwtihf of those in high ranking positions." This statement is not corroborated by ten members of the administrative team (eight current, one who left the agency within less than one year's time and one who

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left the agency this year but continues to work for WESD on a contracted basis) who reported that they have never either experienced personally or observed me demonstrate with others bullying behaviors; have never observed me use verbal disparagement in a way that caused a hostile work environment; and have never seen me engage m punitive measures for the purpose of control.

Responses to Jim Buck's Report Regarding Ann O'Connell's allegations: September 15,2009.

1. Allegation of "rebuke" when Ms. O'Connell requested use of separate funding resources for a project.

Administrative controls to curtail unnecessary spending is a prudent priority. Denying a request for funding is not a form of bullying.

In the case of Ann's request, other funding options existed. Eight other ESDs wrote successful PBS grants and were awarded funding from the ODE. Ann O'Connell had the option of writing a grant and had been offered technical assistance by the project staff to do so. Documentation is available from ODE and the PBS project staff that indicate they felt WESD was a priority for a grant award and offered technical assistance to help Ann with the grant application. She also had access to other funds within her existing special education budgets. Email correspondence from and conversations with Dr. Novotney document his increasing concerns and lack of confidence regarding Ms. O'Connell's budget projections, calculations and analyses. He and I agreed that additional diligence was necessary. In this situation, there was no documentation provided by Ann to demonstrate she had exhausted other funding options.

I take exception to the use of the statement in Mr. Buck's report, "She was rebuked". This is a situation where we have two people with two versions of the emotion and intensity involved in an interaction. There was no rebuke. Her request was denied. Ms. O'Connell and I were in a conference room with people all around us. A contentious interchange certainly would have been noticed by others. The interchange between us was very brief, perhaps 1- 2 minutes.

I was not aware that Ms. O'Connell had allegedly cried as a result of our interaction. She was present for the meeting kickoff/introductions and made comments-this was within a couple of minutes of our interaction. If she cried, it was not evident.

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Regarding Mr. Buck's question about a specific fund number, my budget reviews currently focus on program aggregates, trends and percentages, for the most part. I rely on the business office and department administrators to know funds by numbers and manage the detailed specifics, as do most Superintendents.

2. Allegation of insensitivity.

We began the December loth meeting with positive comments about Ms. O'Connell's Department's activities and an update on some events. I cannot recall how long this part of the meeting took. I then provided her with some feedback, citing examples of comments from other people, not me personally, regarding her unique laughter pattern explaining how it occasionally was viewed as distracting and inappropriate in some situations. I stated I would be remiss if I did not share with her comments/reactions of which she may not be aware. She immediately became upset and cried. I provided her with a Kleenex and attempted to give her some time to compose herself. I lowered my voice and spoke slowly about how now that she has a level of awareness she could be sensitive to the issue. There was nothing more to be said. She shared that she was very proud of her laugh and that it was something that she had received positive comments about and that it was very personal. It became clear to me that she was unable to discuss the topic further. There is absolutely no way we continued for "more than 30 minutes" (her complaint specified 45 minutes) to elaborate on the issue. I had nothing more to say about it. I had shared the feedback I had received, provided specific examples and offered some suggestions for how she might address it.

On April 21 S\ I called Ms. O'Connell and asked her to come to my office and share budget information that ODE had provided the previous Friday. Ann responded affirmatively. While I was waiting for her to arrive, Dave came into my conference room and stated that Ann had called him and said she was not comfortable meeting with me alone. I was surprised, especially given the nature of the meeting. (At this point, the two of them were aware that her complaint would be provided to me later that day; however, I was unaware of this). Ann shared the budget information. It was positive, and important. We concluded quickly. I then asked Ann since it was such positive news, I wondered what it was that made her uncomfortable sharing the information with me without Dave present. She looked at Dave and began sobbing with a rapid intake of air. Dave immediately said we should probably give her time to compose herself She made eye contact with me, hesitantly. I asked again. She hesitated, then

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continued sobbing. I looked at Dave, and he said, "I think she needs some time to compose herself," and we excused her. She sobbed more loudly on her way out. My office is directly under Ann's office. Within a matter of 15minutes, she could be heard laughing loudly and repeatedly while talking with someone in her office. The laughter was overheard during this time by my assistant as well. This caused me to question the actual seriousness of her sobbing behavior.

Mr. Buck commented that Ann's previous evaluation had indicated she met the performance standards. This is accurate. Ms. O'Connell was due to have her evaluation completed before the end of the year. On numerous occasions, Dr. Novotney and I discussed concerns relative to leadership, budgeting, organization, communication and emotional lability. He agreed to assist in drafting targeted goals as part of her evaluation to document the concerns and plan for additional supports in a formal way. Due to the complaint being filed, the evaluation was postponed, as advised by Mark Comstock.

3. Restructuring plan for Ms. O'Connell's department! statement about not feeling safe

This was the key turning point that precipitated Ann pursuing a complaint. Last year, I suggested on two separate occasions in meetings with Ann that it might be helpful to look at splitting up her department due to its size, management and budget challenges. She made it very clear she was not interested in pursuing this. I allowed it to be her decision. However, the issues continued and complaints from the districts and administrative staff under her supervision have become far more numerous and serious. The situation had reached a point where a difficult administrative decision for the good of the agency was needed.

Dr. Novotney worked with Ann on developing a plan. His participation at the meeting with Ms. O'Connell to share the plan was not necessary. It was not an essential productive use of his time when pressing HR and negotiations issues were a priority for him to address. Ms. O'Connell did not inform me she felt unsafe, nor did I respond that she confronts unsafe situations all the time in her role as director. I see no connection between the two comments.

Ann shared her proposal and I shared with her I believed the department needed to be restructured with two directors given its size and complexity. I informed Ann I was open to further discussion. I asked her to think about it, talk with her Asst. Director, Brian Hilsabeck, think about all the possibilities and come up with a hybrid - something that contained ideas from both options. I made it clear I

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would entertain their suggestions for responsibilities, but that it was time to divide the department between two directors. The verbal interchange was followed up with an email that evening as I responded to her request for personal leave. In my email to her I stated, "My hope is that when you return, you will be able to come up with a "hybrid" concept that we can explore further and discuss. Today's initial discussion was not the end by any means. If you can believe that, I am optimistic that we can end up with a variation that will work." I believe this contradicts Mr. Buck's characterization of my interaction with Ann over this issue as not being constructive and supportive.

4. Allegation of "manifesting a JekylllHyde personality"

This characterization was not corroborated by four members of the administrative team who were interviewed by Mr. Buck. Their responses were not included in this report. This is questionable. The omission of their input results in an analysis that provides a false emphasis to some information.

In addition to the two complainants, on their behalf, Mr. Buck interviewed three current administrators and one former disgruntled administrator who has not worked at the ESD for three years. Their comments are included in the report. An additional four members of the administrative team were interviewed at my request. Their specific comments were not included in Mr. Buck's summary report. Several of their statements directly contradict significant portions of the information reported. In an attempt to solicit information from a broader representative sample of the administrative team, ten staff, including the four who Mr. Buck interviewed, were asked if they had observed me engaging in punitive measures against employees for the purpose of control; or if they experienced or observed bullying behaviors with the intent to humiliate or intimidate; or if they had observed me using verbal disparagement in a way that caused a hostile work environment. All ten of the respondents who have worked with me from three to twenty-six years replied "no" or "never."

5. Concurrent Similar Complainants

It is unfortunate that the complainants did not choose to pursue an internal resolution process first in an attempt to resolve issues.

A total of ten additional administrators reported not experiencing or observing negative communication patterns.

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6. Information from a former Administrator

Contacting a former disgruntled administrator and receiving negative feedback is not surprising. Some of the four staff interviewed by Mr. Buck whose comments are not included in this summary report spoke specifically to issues related to this former employee and presented a different perspective. Mr. Buck chose not to include their perspective. It would have provided a more "balanced" point of VIew.

Report Conclusion:

I believe Ms. O'Connell's complaint was filed in response to my feedback to her regarding the need to restructure her department as well as some feedback regarding her communication behaviors. The filing of a complaint in essence forestalled further restructuring and supervisory actions that needed to happen.

Mr. Buck states in his introduction, but not in his conclusion, that: "It is reasonable to conclude that Dr. Casey's supervisory style or behavior as alleged in this complaint has not been observed by multiple employees whom she has evaluated or supervised over the years who continue to hold her in high esteem." It would seem this statement should be included in the findings and conclusion as well.

The report attributes the investigator's conclusion to be based on " ... a majority of those in high ranking positions." This statement is not corroborated by the ten administrators who reported that they have never: 1) experienced personally or observed me demonstrate bullying behaviors with others, 2) use verbal disparagement in a way that caused a hostile work environment or 3) engage in punitive measures against employees for the purpose of control. The Board would have a more balanced picture of the alleged issues if the report had included specific information shared by the additional four interviewees, or if more members of the administrative team were interviewed. In addition, the widespread nature of concerns expressed by the majority of administrators in the Special Programs Department and some district Special Education Directors is indicative of a systemic issue that needed to be addressed, not a punitive agenda on my part. By failing to include this information, it has the impact of giving a false emphasis to the information and conclusions in the report, rendering it neither complete nor accurate.

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28. The Deputy Superintendent informed the Board that approximately from

December 2008 to June 2009 the interactions of the Superintendent in relation to the complainant

became noticeably more direct and critical.

The interaction between Superintendent and the complainant reached a level in which

Dr. Novotney felt it was necessary to step in to terminate the interaction between complainant and

the Superintendent due to the emotional distress of the complainant as a result of the interaction

with the Superintendent.

29. This Board, as the direct supervisor of the Superintendent and charged with the

application of WESD GBNA and GBM, consistent with its obligations under WESD policy BCD,

is faced with a difficult determination: whether to adopt the factual findings and conclusions of an

independent investigator, well experienced in personnel matters and school district administration,

who interviewed 16 WESD employees, including the complainant and the Superintendent, and

interviewed four employees at the specific request of the Superintendent in relation to this complaint

and a similar complaint filed approximately the same time, or to discount the detailed factual report,

analysis, and conclusions based on the general denials of the Superintendent.

This Board is also hampered, as are all entities performing a quasi judicial function, with not

having observed firsthand the conduct of all parties. This Board has considered each of the findings

and each of the responses and information provided by the Superintendent and her attorney and the

analysis and discussion of each of the facts and information provided by all parties.

The Board and its members have not observed the type of interaction complained of by the

complainant in Board member interaction with the Superintendent. However, the evidence that is

persuasive is the complainant's and other witnesses' specific recitation of the events set forth in the

investigator's report, which leads to a conclusion that the conduct is more likely than not to have

occurred as described by the complainant and other administrative personnel interviewed.

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This Board is mindful that the Superintendent has a markedly different version of the events;

however, this Board is persuaded, for the same reasons that the factual investigator addressed, that

the credibility of the superintendent is colored by interest and a lack of candor in relation to

Fund 698.

Accordingly, this Board adopts the findings and conclusions of its factual investigator stated

in his preliminary report.

This Board upholds, in part, the complaint of the complainant and directs legal counsel to

assist it in determining what disciplinary action is warranted in relation to this complaint and the

complaint of complainant "B" involving similar allegations to this complainant.

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FINDINGS OF FACT AND CONCLUSIONS CONCERNING COMPLAINT OF KATHY CAMPBELL

1. On April 23, 2009, Kathy Campbell, Director of Fiscal Services, filed a formal

complaint with the Director of Human Resources, Deputy Superintendent Dave Novotney, which

stated:

This is a formal complaint regarding financial improprieties and intimidation by my supervisor.

Part 1: Complaint regarding financial improprieties including improper and unethical use of WESD funds, school district funds and possibly federal funds with Superintendent Casey's knowledge and direction.

Part 2: My Supervisor (Superintendent) has created a work environment that does not allow me to feel comfortable engaging in conversations regarding financial impropriety, which jeopardizes my ethical responsibility as a Certified School Business Manager.

2. Willamette ESD Policy GBNAJJFCF was most recently adopted by the Board of

Directors on August 12,2008, and provides, in pertinent part:

Hazing/HarassmentlIntimidationIBullying/Menacing

The Board is committed to providing a positive and productive learning and working environment. Hazing, harassment, intimidation, menacing or bullying including cyberbullying by students, staff or third parties is strictly prohibited and shall not be tolerated in the ESD.

* * *

Staff whose behavior is found to be in violation of this policy will be subject to discipline, up to and including dismissal.

* * *

Staff will be reported to Teacher Standards and Practices Commission, as provided by OAR 584-020-0041.

The Superintendent is directed to develop administrative regulations to implement this policy. Regulations shall include descriptions of prohibited conduct, reporting and investigative procedures, as needed, and provisions to ensure notice of this policy is provided to students, staff and third parties.

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3. Willamette ESD Policy GBNAlJFCF-AR is the administrative rule interpreting

Policy GBNA, and was adopted by the Board of Directors July 12,2005, when the Board adopted a

previous version of Policy GBNAlJFCF. The GBNAlJFCF-AR administrative rule has not been

updated to be consistent with the August 2008 policy revision. This administrative rule provides, in

pertinent part:

Hazing/HarassmentJIntimidationJBullyinglMenacing Complaint Procedures

The following definitions and procedures shall be used for reporting, investigating and resolving complaints of hazing, harassment, intimidation, bullying and menacing.

Definitions

* * *

5. "Harassment, intimidation or bullying" means any act that substantially interferes with a student's educational benefits, opportunities or performance, that takes place on or immediately adjacent to school grounds, any school-sponsored activity, on school-provided transportation or at any official school bus stop, and that has the effect of:

a. Physically harming a student or damaging a student's property;

b. Knowingly placing a student in reasonable fear of physical harm to the student or damage to the student's property;

c. Creating a hostile educational environment.

"Harassment" also includes, but is not limited to, any act which subjects an individual or group to unwanted, abusive behavior of a nonverbal, verbal, written or physical nature on the basis of age, race, religion, color, national origin, disability, marital status, sexual orientation, physical characteristic, cultural background, socioeconomic status or geographic location.

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"Intimidation" also includes, but is not limited to, any threat or act intended to tamper, substantially damage or interfere with another's property, cause substantial inconvenience, subject another to offensive physical contact or inflict serious physical injury on the basis of race, color, religion, national origin or sexual orientation.

6. "Menacing" includes, but is not limited to, any act intended to place a school employee, student or third party in fear of imminent serious physical injury.

RetaliationlFalse Charges

Retaliation against any person who reports, is thought to have reported, files a complaint or otherwise participates in an investigation or inquiry is prohibited. Such retaliation shall be considered a serious violation of Board policy and independent of whether a complaint is substantiated. False charges will also be regarded as a serious offense and will result in disciplinary action or other appropriate sanctions.

Complaint Procedures

Designated ESD administrators and the Superintendent have responsibility for investigations concerning hazing, harassment, intimidation, bullying or menacing. The investigator(s) shall be a neutral party having had no involvement in the complaint presented.

* * *

All complaints will be promptly investigated in accordance with the following procedures:

Step I

Any hazing, harassment, intimidation, bullying or menacing information (complaints, rumors, etc.) shall be presented to the designated ESD administrator or Superintendent. Complaints against the building principal shall be filed with the Superintendent. Information may be presented anonymously. Complaints against the Superintendent shall be filed with the Board chair. All such information will be reduced to writing and will include the specific nature of the offense and corresponding dates.

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Step II

The district official receiving the complaint shall promptly investigate. Parents will be notified of the nature of any complaint involving their student. The district official will arrange such meetings as may be necessary with all concerned parties within five working days after receipt of the information or complaint. The parties will have an opportunity to submit evidence and a list of witnesses. All findings related to the complaint will be reduced to writing. The district official(s) conducting the investigation shall notify the complainant and parents as appropriate, in writing, when the investigation is concluded and a decision regarding disciplinary action, as warranted, is determined.

4. WESD Policy GBM provides for staff complaints. It states, in pertinent part:

The Superintendent or designee will develop a complaint procedure which will be available for all employees who contend they have been the subject of a violation, misinterpretation, or inappropriate application of ESD personnel policies and/or administrative procedures. The complaint procedure will provide an orderly process for the consideration and resolution of problems in the application or interpretation ofESD personnel policies.

5. WESD Policy GBM-AR is the administrative rule interpreting policy GBM which

provides, in pertinent part:

Complaint Procedure - Staff

A complaint is where an employee contends that he or she has been the subject of a violation, misinterpretation, or inappropriate application of ESD policies and/or administrative procedures. A complaint may be oral or in writing, but if oral, then must be reduced in writing before proceeding with the complaint procedure. The complainant must sign the written complaint.

* * *

The procedure for a complaint is for the supervisor to review the complaint. If the supervisor is part of the complaint, then the director of the department will review the complaint. In the absence of a director, the office of the superintendent may appoint another director or the HR administrator to review the complaint.

The complaint is to be reviewed within five agency working days after receipt in writing. If the complaint cannot be reviewed within that period, the supervisor (or director or HR administrator) may extend the period of time by giving the person filing the complaint

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notice of their intent to do so and the reasons supporting the extension. The extension must be for a reasonable time designated for efficient resolution of the complaint.

The fact reviewer may investigate the claim( s) of the person making the complaint up to and including interviewing any person who has information that may be relevant to resolution of the complaint. The fact reviewer is to make a written determination based on the facts. Notice of the determination shall be either hand delivered or sent to the complainant at his or her last known address.

* * *

6. The complaint by the staff member is against the Superintendent; therefore, pursuant

to policies GBM, and GBNA, the complaint after delivery to the Deputy Superintendent as Human

Resources Administrator was delivered to the Board Chair on April 22, 2009.

The Board Chair, through the Board's legal counsel, engaged the services of an independent

fact investigator, Education Solutions, Inc., through its principal, James Buck, for the purpose of

interviewing the complainant, the accused, and any other relevant persons, including staff, to

investigate the allegations of the complaint and prepare findings and conclusions based on the facts

found.

7. The Superintendent was notified of the complaint, the engagement of the factual

investigator, and was provided a copy of the complaint. The Superintendent was also directed to

take no action that would be derogatory, disciplinary, or in any fashion retaliatory against the

complainant or any other administrator or employee of Willamette ESD during the pendency of the

investigation or thereafter. Supervisory authority over the complainant was transferred to Deputy

Superintendent Novotney during the pendency of the investigation.

The Superintendent was also directed to safeguard all electronically stored information and

hard copy information and documents, including the computer she used and with which she

accessed Willamette ESD records, including all email and other electronic communications; word

processing documents; spreadsheets; databases; calendars; telephone logs; contact management

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information; internet usage files and network access information; as well as all hard copy files and

documents in her possession or in the possession of the District. (April 27, 2009 letter of counsel

and Board Chair)

8. Superintendent has been employed with Willamette Education Service District or its

predecessor since August 1974 in various positions, including Director of Special Programs,

Director of Regional Programs, Assistant Superintendent and Superintendent since June 2003.

9. The Superintendent is the ESD's Chief Executive Officer and has, under the Board's

direction, general supervision of all ESD programs, services, and personneL The Superintendent is

responsible for managing the ESD under the Board's policies and is accountable to the Board for

that management. The Superintendent may delegate to other ESD personnel any powers and duties

imposed upon the Superintendent by Board policies or by vote of the Board. Delegation of power

or duty, however, will not relieve the Superintendent of responsibility for action taken under such

delegation. The Superintendent shall serve as Budget Officer of the ESD and as Secretary of the

ESD Boundary Board. (WESD Policy CB.)

10. The duties of the Superintendent include:

a. The Superintendent shall serve as a Chief Executive Officer and shall serve

the Board in all matters as a professional advisor.

b. The Superintendent shall recommend appropriate policies for the Board's

consideration and shall implement and execute all policies adopted by the

Board.

c. The Superintendent shall keep the Board fully and accurately informed about

District programs.

d. The Superintendent shall serve as Budget Officer of the ESD.

e. The Superintendent shall serve as Secretary of the ESD Boundary Board.

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f. The Superintendent shall interpret the ESD needs and shall present

professional recommendations on all problems and issues considered by the

Board.

g. The Superintendent, usmg professional judgment, shall make such

assignments, reassignments and transfers as are necessary to secure the

highest staff efficiency.

h. The Superintendent shall lead the development and operation of an adequate

program of community relations.

1. The Superintendent shall participate m community activities and

professional development.

J. The Superintendent shall use great care m nominating candidates for

appointment to the staff.

k. The Superintendent shall authorize the purchase of equipment and supplies

that are appropriate to the purpose and needs ofESD.

1. The Superintendent shall present for Board's consideration an annual budget

designed to serve the ESD's needs.

m. The Superintendent shall establish and direct fmancial operations of the ESD

to ensure adherence to budget provisions and the wise use of funds.

n. The Superintendent shall develop annually a salary and relay of benefits

schedule for legally designated administrative employees for Board

consideration and approval. (WESD Policy CBA)

11. The Board's authority is be delegated through the Superintendent to the

administrative staff as shown in the Board approved Organizational Structure Chart of the ESD.

Lines of authority on the chart represent direction of authority and responsibility. The

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Superintendent may reorganize lines of authority and revise the Organizational Chart subject to

Board approval of major changes and creation or elimination of positions. The Board expects the

Superintendent to keep administrative structure current with the needs for supervision and

accountability within the ESD.

12. The Organizational Chart, adopted May 2005, shows the Superintendent as the

intermediary between the Board of Directors and all ESD employees. The Superintendent

supervises directors in the areas of Special Programs Departments, Oregon Migrant Education

Service Center, Region 16 Migrant Education Center, Business Services Department, Curriculum,

Assessment and Research Department, Communications Department and Information Services

Department.

13. The Superintendent delegated to an Assistant Superintendent supervisory duties and

responsibilities over Human Resources Department, Facilities Department, Services under SB 1149

Department, Instructional Services Department and Professional Development Services Department

which includes Driver Education, Corrections Education, Safe Schools, SMART, WWPTC,

ECHO/STARS Programs, and SLDC. The Assistant Superintendent has no oversight duties or

responsibilities over Business Services other than to approve budgets for the departments under his

delegated supervision. The Assistant Superintendent reported to the Superintendent.

14. For the 2008-2009 fiscal year, the Organizational Chart was revised to identify the

Superintendent as the intermediary between the Board of Directors and all other staff; however, the

supervisory and reporting duties of the Superintendent included Information Services, Business

Services, Region 16 Migrant Services and Special Programs.

15. The supervisory duties of the Deputy Superintendent, Dave Novotney, included

Human Resources, Curriculum Assessment and Research, Instructional Services, Migrant

Education Service Center and Project Solutions Group. Deputy Superintendent Novotney reported

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to the Superintendent, not directly to the Board. (WESD Policy CCA: Organizational Chart

2008-2009)

16. The Board adopted a policy under which the lines of authority and responsibility

were directed through the Superintendent to establish a clear understanding of working relationships

with all staff. Lines of authority were those approved by the Board as shown on the ESD

Organizational Chart. Staff is expected to refer matters requiring administrative action to the

administrator to whom they are responsible. That administrator is expected to refer such matters to

the next higher administrative authority when necessary. Additionally, all staff is expected to keep

the person to whom they are immediately responsible informed of their activities by whatever

means the person in charge deems appropriate.

Lines of authority should not restrict the cooperative working relationship of all staff

members in order to develop the best possible programs and services. In addition, the policy does

not restrict protected labor relations communications of bargaining unit members. The established

lines of authority represent direction of authority and responsibility. When staff is working

together, the lines represent avenues for a two-way flow of ideas to improve programs and

operations ofESD. (WESD Policy CCB)

17. The Superintendent is responsible for implementing Board policies and for

interpreting them to staff, students, component school districts and the public. Other administrators

share this responsibility. Many of the Board's policies require implementing regulations. The

Superintendent is required to develop these regulations, in consultation with directors, staff

members and other persons and groups as appropriate, for submission to the Board.

Policies officially adopted by the Board and other administrative regulations formulated to

implement adopted Board policies are included in the School Board Policy Handbook. Staff and

Student-Parent Handbooks are be used for disseminating policies and regulations to persons directly

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affected by them. The Board's only official policy manual will be maintained in the ESD Human

Resources office and will be available for inspection during regular business hours. Each employee

will be specifically notified of the existence and availability of personnel policies as well as the

existence, availability and location of all Board policies. Administrators are authorized to establish

rules and procedure for staff and students as long as these rules and policies are consistent with

policies and regulations established by the Board and Superintendent. * * * (WESD Policy CH)

18. The Superintendent is responsible for administering any program approved by the

Board. The ESD operates specially funded programs which must be administered in accordance

with particular federal and/or state laws and conditions of the grant. The Board, through its

approval of such programs and acceptance of funds, is ultimately responsible for these programs

although many of the regulations which govern them established by another agency. The

Superintendent is charged with the responsibility for coordinating funded projects, for

administration of grants and insuring that the various departments which operate these programs do

so within the guidelines pertaining to the particular program unless otherwise stipulated in the grant

requirements. (WESD Policy CG)

19. A Superintendent, as the statutorily designated budget officer, is required to prepare

the budget document which the Board may adopt after public hearings with a budget committee

consisting to Board members and non-Board members. (WESD Policies DB, DBE, DBEA, and

DBH)

20. The Board has the ultimate responsibility to establish an unreserved fund balance in

an amount sufficient to protect the ESD from unnecessary borrowing in order to meet cash flow

needs; provide prudent reserves to meet unexpected emergencies and protect against catastrophic

events; meet the uncertainties of state and federal funding; and to help ensure a credit rating that

would qualify the ESD for lower interest costs and greater marketability of bonds that may be

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necessary ill the construction and renovation of ESD facilities. The Board directs the

Superintendent to manage the currently adopted budget in such a way to ensure an ending cash

balance of at least 8.00% of total adopted revenues.

In determining an appropriate unreserved fund balance, the Board considers a variety of

factors with potential impact on WESD's budget, including the predictability and volatility of its

expenditures; the availability of resources in other funds as well as the potential drain upon general

fund resources from other funds; liquidity; and designations. Such factors will be reviewed

annually prior to the budget committee meeting. (WESD Policy DBDB)

21. Policy DBDB was amended on the recommendation of the Superintendent in

May 2009 to establish a range of an ending fund cash balance between 4.00% and 7.00% of total

adopted revenues.

22. The Board, consistent with statutory limitations, limits the ability of WESD staff to

transfer funds inconsistent with the adopted budget. The Board policy concerning budget transfers

operates on the following limitations:

a. Intra-Fund transfers. Transfers between the levels of appropriation must

be made by official resolution of the Board stating the need for the transfer,

the purpose and the amount. The Superintendent or hislher designee has the

authority to approve transfers between programs and/or object codes within

the same level of appropriation.

b. Inter-Fund Transfers. Transfers from the general fund to any other fund

are authorized when completed by official resolution of the Board stating the

need, the purpose and the amount. Appropriation transfers from any special

revenue fund to the general fund or any other special revenue fund are

prohibited. (WESD Policy DBK).

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23. WESD Policy DBK was amended upon the recommendation of the Superintendent

to delete the words "appropriation transfers from any special revenue fund to the general fund or

any other special revenue fund are prohibited." by resolution in May 2009. Legislation authorizing

the change, ORS 294.450, was not adopted until June 2009, and is not effective until January 1,

2010. (WESD Policy DBK; Senate Bill 916, 2009, Session Laws Chapter 477)

24. The Superintendent is required to make the Board aware of any substantial changes

in expected revenues or unusual expenditures so the Board may adjust the [mal adopted budget by

the Board. (WESD Policy DBl)

25. All funding proposals and applications from any source, including federal, state or

private grants for such other funds that will assist the ESD in meeting the adopted Board and ESD

goals, are subject to approval by the Board of Directors. (WESD Policy DD)

26. Statutorily, ESD shall provide services to component school districts in accordance

with a local service plan developed by the ESD and component school districts. The plan must be

adopted by the Board and developed to meet the ESD service goals. The local service plan must

also include services as required by state and federal law in areas of special needs students,

technology support, school improvement services, administrative and support services, other

services required under ORS 339.305-339.090, or services designated to meet regional needs.

a. The ESD may provide entrepreneurial services and facilities to

non-component school districts and other public and private entities pursuant

to ORS 339.185.

b. The ESD is mandated to expend at least 90.00% of all amounts received

from the state school funds and at least 90.00% of all local revenue as

defined in ORS 327.019, on services and programs that have been adopted

by the Board in the local service plan and approved by resolution of

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two-thirds of the Boards of the component school districts enrolling at least a

majority of the students within the ESD. (WESD Policy DDA)

27. Revenues from state and federal sources subject to Board control and may be

available to the ESD, provided it complies with all regulations and procedures required for receiving

and using such funds. (WESD Policy DEIDEBIDEC)

28. All funds received by the ESD are to be handled and accounted for according to

Oregon Revised Statutes and Administrative Rules, and accurate records of distribution shall be

maintained. The Superintendent or designee is responsible for the proper accounting of all local,

state and federal funds in accordance with all local, state and federal rules and regulations. (WESD

Policy DI)

29. The Superintendent and designees are required to provide monthly financial reports

that include estimates of expenditures for all funds in comparison to budget appropriations, actual

receipts in comparison to budget estimates and the ESD's overall cash condition. Supplementary

reports on other funds or accounts are to be furnished upon request of the Board or Superintendent.

The Board may receive a pre-audit report from the ESD's auditor recapping year-end closure of

financial statements prior to the annual audit. Appropriate staff is to be made available at any Board

meeting, upon the Board's request, to respond to questions and to present current financial

information. The Superintendent is to notify the Board at any time of substantial deviations in

anticipated revenues and/or expenditures. (WESD Policy DIe)

30. An audit of all ESD accounts is required to be made annually by an accountant

selected by the Board from the roster of authorized municipal accountants. The account

examination is to be conducted in accordance with minimum auditing standards established by the

Secretary of State. Every three years, the Board is to review the contract with the audit firm and, if

necessary, solicit requests for proposals from qualified municipal auditors. The annual audit of the

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books and accounts is to include all funds under ESD's control. A copy of the audit report is to be

presented to the Board. The Superintendent or designee is to submit a copy of the audit report to the

Oregon Department of Education and to the Oregon Secretary of State Audit Division.

Additionally, the ESD is to ensure that component school districts conduct an annual audit. The

District is to assist component districts, as required, to meet budgeting and accounting audit

requirements. A file of component district audits is to be maintained by the District. (WESD Policy

DIE)

31. Between 2004/05 and 2007108, Boldt, Carlisle and Smith, CPA's, provided a

financial audit ofWESD fmancial accounts.

WORKPLACE ENVIRONMENT INVESTIGA nON

32. Between April 29, 2009 and June 13, 2009, the factual investigator reviewed

collected information concerning the allegations by complainant in conjunction with a separate staff

complaint alleging conduct by Superintendent similar to the conduct alleged by complainant.

33. June 25,2009, the Superintendent was placed on paid administrative leave, pending

completion of the investigation of this complaint.

34. On August 20,2009, a copy of the factual investigator's preliminary draft report was

provided to the Superintendent and the Board members concerning the complainant's complaint and

the companion investigation of similar issues.

35. The factual investigator's preliminary report found:

Complaint:

Kathy Campbell alleged in her report that she felt intimidated by Dr. Casey for two pnmary reasons. She alleges her supervisor, Dr. Casey:

1. Engaged in fiscal improprieties regarding the use of WESD funds including a misuse of federal funds; and,

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2. Created a work environment that does not allow her to raise questions with regard to financial improprieties thereby jeopardizing her ethical responsibility as the ESD's business manager.

Background:

WESD Policy GBNA states in its opening paragraph: "The Board is committed to providing a positive and productive learning and working environment. Hazing, harassment, intimidation, menacing or bullying including cyberbullying by students, staff or third parties is strictly prohibited and shall not be tolerated in the ESD." Policy GBNA was readopted by the Board in August of 2008. Accompanying administrative procedures dating from 2005 were not updated, however, at that time. While the policy clearly enjoins staff from engaging in intimidation and bullying, the ARs only refer to student behavior. The policy language is clear, however, on the Board's intent to prohibit the same behavior, irrespective of whether it be perpetrated by students, staff, or third parties (e.g., volunteers) participating in WESD's programs.

The superintendent, as the chief executive officer of the organization, is expected to model the workplace behaviors that create the type of culture the Board would like to see throughout WESD's programs. Thus, there is at the outset a higher standard associated with the superintendent's behavior in this regard than that for other WESD employees.

As part of the investigation, I interviewed four individuals that Dr. Casey requested be included. The four individuals were supervised currently or previously during their careers by Dr. Casey. They were not interviewed because they had direct knowledge regarding the specific details of the complaint but to obtain a perspective of Dr. Casey as supervisor. All of these individuals believed that Dr. Casey consistently showed professional conduct in

her interactions with them. All believed Dr. Casey set high expectations and when she was direct with them or disagreed with their position on a matter, they saw the criticism as constructive and helpful in their own professional development. It is reasonable to conclude that Dr. Casey's supervisory style or behavior as alleged in this complaint has not been observed by multiple employees whom she has evaluated or supervised over the years who continue to hold her in high esteem.

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Terminology:

"Workplace bullying" refers to repeated, unreasonable actions of individuals (or a group) directed towards an employee (or a group of employees) which is intended to intimidate and creates a risk to the health and safety of the employee(s). Workplace bullying often involves an abuse or misuse of power. Bullying includes behavior that intimidates, degrades, offends, or humiliates a worker, often in front of others. Bullying behavior creates feelings of defenselessness in the target and undermines an individual's right to dignity at work." (Washington BOLI Report of ApriI200S.)

With regard to intimidation or bullying, the two are used in the literature often interchangeably. OSHA emphasizes in its definition:

"Bullying is defmed by the effect of the behavior, even though there may not be a specific intent to bully." It is recognized that harassment is much more detectable while bullying is far more difficult to recognize. It should be acknowledged also that bullying is about impact and not intention. The perceptions of the person feeling bullied should not be dismissed or trivialized as researchers in this area believe happens with high regularity in the workplace.

Some actual behaviors that authorities attach to this behavior differ somewhat, but they may include the following (taken from Bureau of Labor and Industries and OSHA documents):

-Being shouted at or humiliated

-Unwarranted or invalid criticism

-Being treated differently than peers

-Exclusion or social isolation

-Blame without factual justification

- Deliberately denying access to information, consultation or

resources

-Unfair treatment in relation to accessing entitlements such as leave or training

-Unreasonably overloading a person with work

The authorities point out that bullying, unlike aggression, "is rarely a single incident and tends to be an accumulation of many small incidents, each of which, when taken in isolation and out of context, seems trivial." Authorities also tend to affirm "the person being bullied may not realize they are being bullied for weeks or months until there's a moment of enlightenment." (Tim Field's UK National Workplace BUllying Advice Line.)

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Findings:

After an examination of the evidence presented, I find that there is sufficient merit to uphold Ms. Campbell's complaint of intimidation or bullying for the following reasons:

1. In December 2008 WESD, at the specific direction of Dr. Casey, WESD paid an employee litigation settlement using funds from an OMEP (Oregon Migrant Education Partnership) account. Dr. Casey stated in her interview on May 15, 2009 that the funds remaining in this account were not federal resources, but monies that accrued to the OMEP account from contracted services to external districts several years ago. There is, however, no evidence in district documents to support Dr. Casey's contention in this regard. In fact, district documents show that all district-supplied resources through contracted services were actually overspent the year they were collected. The $20,000 that was used in the legal settlement in December 2008, through Dr. Casey's specific direction, was from carryover federal funds channeled to WESD from the Oregon Department of Education. Ms. Campbell asked Dr. Casey if she really meant to use OMEP for this expenditure because she questioned the legitimacy of it and received from Dr. Casey what she believed was an order to execute the payment in this fashion. Using dedicated Federal funds for a legal expense unrelated to what the funds were designated for constitutes improper stewardship of those resources. It is appropriate for Ms. Campbell to question this expenditure of resources for this purpose. Prior to her filing the complaint, Ms. Campbell received the distinct impression she could not fully express this prerogative without being chastised or demeaned by Dr. Casey. That contention by Ms. Campbell was supported by the perspective of Deputy Superintendent Dave Novotney.

2. Dr. Casey began an evaluation with Ms. Campbell and met to discuss it last spring. No written document was reviewed, however, according to Ms. Campbell. Dr. Casey admits that Ms. Campbell as a probationary employee should have received a completed evaluation which should have gone into her personnel file. It is important to note that Ms. Campbell has never received any communication regarding a performance deficiency. Not completing the formal evaluation for Ms. Campbell as required by Board Policy CCG shows differential treatment, a factor in patterns associated with bullying behavior. It should be noted that this item was not raised by Ms. Campbell in her complaint, but originated in the investigation process.

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3. When Ann 0' Connell requested from Dr. Casey partial use of resources in Fund 698 in October of 2008 for the Positive Behavior Support Program, she was rebuked and told that she couldn't access those funds in no uncertain terms. Dr. Casey asked Ms. Campbell shortly after this encounter how Ann even learned of Fund 698's existence. Ms. Campbell at the time had no knowledge of it herself and couldn't explain how Ms. O'Connell learned of the fund, a fund that has approximately $1.4 million in resources and has been at that level for several years. Dr. Casey remarked that she "had got some tears out her" (referring to Ms. O'Connell) and that she "won't be asking again." Fund 698 actually is comprised of special program resources that should be overseen by Ann O'Connell who directs those programs. The manner in which Dr. Casey wanted to keep these funds from access or even disclosure from one of her most senior directors is a form of bullying.

When I spoke with Dr. Casey about Fund 698, she professed to know nothing about it by fund number. I then showed her a ledger sheet of the Fund and the sources of its revenue. However, she indicated she did not know the purpose of the fund when asked, yet she could tell it was about special programs. Written communication provided by a retired business clerk stated that Dr. Casey indicated only she controlled access and expenditure of resources in Fund 698. Each administrator and business department employee I spoke with remarked on Dr. Casey's intimate knowledge of the WESD budget and her micromanagement of these funds. For her to indicate that she had no knowledge of this fund with $1.4 million over several years is simply not credible in the face of statements in which she referenced the fund number in conversations. It appears that this fund has been retained to cover substantial losses in the Pentamation debt account so that when the 600 fund series are rolled together for budget reporting, the Pentamation deficit will not be apparent. Dr. Casey admitted that the district boards and the WESD Board were not aware of the magnitude of this deficit.

4. Ms. Campbell reported that in the 2008-09 budget process Dr. Casey gave her a directive to increase the size of the General Fund's ending fund balance. The ending fund balance was increased by applying $500,000 in funds collected from member districts in the two prior years for regional services. Ms. Campbell questioned how district resources in a special revenue fund could be shifted to the General Fund to increase its ending fund balance without school district approval. Queries about this brought a retort from Dr. Casey that Ms. Campbell "doesn't understand how ESDs work" and "I don't know why you continue to question this." She was made to feel she could not continue to challenge this matter without facing

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further rebuke. Ms. Campbell believes that the WESD Board does not know that $1.1 million of the $1.4 million budgeted for the beginning fund balance in 2007 actually originated from member district resources initially in a targeted special revenue fund as well as other district funds.

Dr. Casey denies making those statements to Ms. Campbell, but several other administrators confirm that parameters of discussion regarding budget and other matters are established by Dr. Casey and administrators are "punished" for transgressing them. There is evidence that Ms. Campbell spoke in January and February of 2009 to Dr. Novotney about the stress emanating from her being unable to broach her budgetary concerns with Dr. Casey without fear of some reprisal. This pattern of restricting an administrator from raising critical issues of budgetary propriety is not only poor management practice, but by the manner in which it was conveyed, it is also bullying behavior.

5. Just prior to the December 2008 Board meeting, Dr. Casey called Ms. Campbell to come down to discuss the Annual Report. Dr. Casey took offher glasses while standing over Ms. Campbell and slammed the report down on the table. She was red-faced and fuming over language that read "Administrative expense" and wanted the term "expense" deleted or "whited out" of the 200 copies before the meeting convened. Ms. Campbell attempted to show her that the terminology used in the document was the same as in preceding years. It was only then that Dr. Casey regained composure, but Dr. Casey issued no apology for the intensity of her comments to Ms. Campbell. Dr. Casey discounted the significance

of this exchange and said it was essentially a non-issue. Her obliviousness of the impact it had upon Ms. Campbell, however, tends to substantiate Dr. Casey demonstrating a blind spot on the impact her behavior may be having on others. Unwarranted or unjustified criticism, especially delivered with a high degree of vehemence, constitutes bullying behavior.

6. Several current WESD administrators commented that they see Dr. Casey as manifesting a "Jekyll/Hyde" personality as she can be very supportive at certain times and then "come across the table and take you out." The observed behavior was perceived by multiple administrators not as idiosyncratic but as a means for Dr. Casey to exercise control over her subordinates. This verbal description fits bullying profiles in the literature. When an administrator acts unpredictably or with intensity not consistent with the situational context, then trust in her judgment and in the supervisor-subordinate

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relationship becomes tenuous. The accompanying fear produces stress and contributes to less effectiveness on the job. It is important to point out that a supervisor engaging in bullying selects targets who manifest vulnerability even though they may be very successful in conducting their job responsibilities. Supervisors often do not display bullying behavior to all subordinates but are quite selective in their targeting.

7. A former high ranking administrator at WESD related a very similar pattern of Dr. Casey providing strong supportive mentoring for many months, but then experiencing the relationship turn into communications that were described as creating a "hostile work environment." While Dr. Casey did not use profane or vulgar language, the administrator found that communications were harsh and at times humiliating. This administrator also recalls one other employee overhearing Dr. Casey's comment to her in passing and "being mortified" at hearing what was said. The individual, consistent with other current administrators, sees Dr. Casey engaging in a practice of having a "favored child" pattern, but once you are "out of favor, you are really out."

8. There are other instances of administrative judgment by Dr. Casey regarding slot costs adjustments, a $10,000 credit given arbitrarily to Woodburn School District, and the charging of legal fees to program slot costs that warrant further or more in-depth investigation than this inquiry could allow for and still provide a timely response to the complaint. These issues, however, highlight questions surrounding Dr. Casey's appropriate fiscal oversight or propriety in the management of WESD resources and also of Ms. Campbell's inability to broach them without the fear of some type of corrective behavior by Dr. Casey.

Conclusion:

While there appears to be sufficient evidence that Dr. Casey's behaviors constitute bullying, even if that were not the conclusion, Dr. Casey has by her actions eroded the level of trust within the top echelons of the WESD organization. While not all WESD administrators hold this opinion, a majority of those in high ranking positions is consistent in its criticism of the impact of divisiveness within the administrative team that has been fostered by certain behaviors of Dr. Casey.

Trust is the fundamental attribute and "currency" for effective team functioning within an administration. While high ranking WESD administrators extol Dr. Casey's prowess and skill in meetings and in

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interactions with the legislature, board, community partners and constituents, they do not trust her because of her inconsistent treatment of their colleagues. Dr. Casey does not seem to recognize this perspective on her administrative style, nor does she view her verbal remarks in the same light as they are interpreted by others. She sees herself as an indispensable leader of the ESD. The literature is clear that most of those engaged in bullying do not perceive that they are having this impact upon others nor do they take responsibility for it. No current WESD administrator I spoke with who felt at times slighted by Dr. Casey indicated that she ever apologized for what the administrator considered a lapse in judgment or tactless action by her. That reluctance to seek amends gives further evidence that Dr. Casey may be blinded to this particular characteristic in her own performance.

* * *

The budgetary complexities of the WESD operation warrant further study due to several charges or allegations that emerged in this complaint. Some of those, if substantiated, could result in ethical and/or licensing sanctions upon Dr. Casey. It would be important for someone with accounting and budgeting expertise to draw conclusions on the decision-making and Dr. Casey's directives regarding fund management. Dr. Casey indicated that an "independent auditor" was now looking into the Technology Fund related to the Pentamation Project. This audit was instigated by Ms. Olden, the director of that department ,and is now supported by Dr. Casey. That type of auditing should be extended to address other issues that have arisen. Since the complaint was filed by Ms. Campbell, it appears that Dr. Casey has given at times contrasting direction to the budgeting process. It should be determined whether this exposure to questionable fiscal practices or decision-making has motivated a defensive strategy by Dr. Casey in this regard. A more thorough investigation into the questions of fiscal improprieties would result in determining whether other outside agencies need to be contacted.

36. On August 25,2009, Superintendent Casey provided a preliminary response, which

was provided to the Board Directors.

37. On August 25, 2009, the Board inquired of the factual investigator concerning his

preliminary draft findings and the responses and information provided by the Superintendent in her

preliminary response.

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38. On September 15, 2009, the Superintendent provided additional responses to the

factual investigator's report and the companion investigation complaint report:

1. Alleged use of federal funds to pay partial employee

litigation settlement costs for the Special Programs Department:

Review of the revenue records for this fund reveals a total of over $90,000 of which only approximately $60,000 was receipted as a federal source. Two former Willamette ESD fiscal staff reviewed the records separately and corroborated that all federal grant funds had been expended.

The authorization for expenditure of $20,000 was intended to come from the remaining non-federal unused local revenue portion in this fund that has been inactive since 2006 and not subject to the grant requirements as it was additional, non-federal revenue, and was not for the purpose of the original grant.

The federal grant project ended on Sept. 30, 2005. In dealing with federally funded grants, any unused federal dollars are returned to the source at the close of the program. Expenditures exceeded the federal fund resources, meaning only non- federal funds should be remaining. Since this program fund had not been active since the fiscal year 2006, any remaining balance should be discretionary, nonfederal.

Ms. Campbell did not notify me of any possible confusion or concern that the remaining funds might be federal. Had she notified me at any time of any concern, I would have rescinded my authorization for the expenditure and the transaction easily would have been posted to another fund. Fiscal personnel report this would have been customary, standard operating procedures and this remedy would have resolved the issue. This kind of situation is typically resolved internally as a routine business practice.

Deputy Superintendent Dave Novotney attended the majority of all meetings I had with Kathy Campbell this year. After I learned of her complaints in April, 2009, I asked Dr. Novotney ifhe had witnessed me engaging in intimidating or demeaning communication with Ms. Campbell. He said, "No." There is nothing that would have precluded Ms. Campbell from bringing her concern to my attention, or, as an alternative, sharing it with Dr. Novotney and asking him to bring it to my attention.

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2. Formal evaluation meeting was held. Ms. Campbell and I met in my office on June 26, 2008 and discussed her annual performance evaluation. I hand wrote notes and dated the standard WESD evaluation form before and during our discussion and when we concluded the review, I told her I would have it typed and get her a copy to her for signature. This document that was discussed with her is available in my personnel file.

3. Request by Ann O'Connell for use of funds for the Positive Behavior Services project. A Superintendent implementing administrative controls to curtail unnecessary spending should not be considered a form of bullying.

In this case of Ann's request, other funding options existed. Eight other ESDs wrote successful PBS grants and were awarded funding from the ODE. Ann O'Connell had the option of writing a grant and had been offered technical assistance by the project staff to do so. She also had access to other funds within her existing special education budgets. There was no documentation provided by Ann to demonstrate she had exhausted other funding options.

Email correspondence from and conversations with Dr. Novotney document his increasing concerns and lack of confidence regarding Ms. O'Connell's budget projections, calculations and analyses. He and I agreed that additional diligence was necessary

I take exception to the use of the statement in Mr. Buck's report, "She was rebuked". This is a situation where we have two people with two versions of the emotion and intensity involved in an interaction. There was no rebuke. There was a denial of the request. This does not constitute bullying. Ms. O'Connell and I were in a conference room with people all around us. A contentious interchange certainly would have been noticed by others. The interchange between us was very brief, perhaps 1- 2 minutes. Kathy was not present during this interaction so there is no basis of proof for this hearsay reference.

I was not aware that Ms. O'Connell had allegedly cried as a result of our interaction. She was present for the meeting kickoff/introductions and made comments-this was within a couple of minutes of our interaction. If she cried, it was not evident.

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Therefore, I would not have made the comment to Ms. Campbell that I "got some tears out of her."

Regarding Mr. Buck's question about a specific fund number, my budget reviews currently focus on program aggregates, trends and percentages for the most part. I rely on the business office and Department Administrators to manage the specifics, as do most Superintendents.

Alleged directive to increase the size of the General Fund's ending fund balance.

I shared with Kathy Campbell that smce the State School Fund appropriations were finally being increased again (at that time), one of our goals would be to increase our ending fund balance. We did not set a defmitive target but discussed attempting to reach around 5%. Kathy did not share with me that this might have presented any problems for her and she did not inform me what strategies she used to arrive at the ending fund balance.

My communications with Kathy have been very different from those with previous business directors. She did not routinely prepare briefings or provide me with overviews, talking points or recommendations. On more than one occasion this year, I needed to initiate the communication with her that fiscal information had been sent from ODE and I needed her to discuss the impact for us with me. Typically, a Business Director would take the initiative as soon as fiscal information is made available by ODE to compute the ramifications and inform the Superintendent. She has rarely shared specifics with me or taken the initiative to discuss budget issues.

Kathy refers to speaking with Dave Novotney about stress emanating from her being unable to broach her budgetary concerns with me. I asked Dave why he had not made me aware of her concerns. He told me she had specifically requested that he not do so. This essentially resulted in preventing us from dealing with the issues as a team and kept me unaware of any specific concerns she may have had.

4. Annual Report

My summary of this meeting could not be more disparate from Kathy's version. There was no over reaction on my part - this was

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definitely not a significant issue for me. I simply questioned the use of a specific word and its intent on one page of the 79 page document relating to the labeling of a pie chart depicting fiscal information. Kathy provided an explanation, based on her interpretation. Her interpretation was different than mine. The outcome was we left it the way it was for the 2007 report. Her description is simply not accurate. The issue was minor and there is no way I would have escalated this small detail into something of such significance. This may have been an instance of miscommunication, but it was not an example of bullying. Kathy's statement that I "wanted the term "expense" whited out or deleted from the 200 copies before the meeting convened" is totally irrational. If a change had been necessary prior to disseminating the report to the Board, only 15 reports would have been needed, not 200 before the meeting, as has been alleged.

This is another example of an event where Ms. Campbell and I disagree as to what transpired. The fact that the report was not changed is an indicator that Kathy and I discussed the situation and agreed upon

6 and 7.

Allegation of control over subordinates This

characterization was not corroborated by four members of the administrative team who were interviewed by Mr. Buck. Their responses were not included in this report. This is highly questionable and results in a skewed analysis of information.

In addition to the two complainants, on their behalf, Mr. Buck interviewed three current administrators and one former disgruntled administrator who has not worked at the ESD for three years. Their comments are included in the report. An additional four members of the administrative team were interviewed at my request. Their specific comments were not included in Mr. Buck's summary report. Several of their statements directly contradict the information stated in Items #6 and #7.

In an attempt to solicit information from a broader representative sample of the administrative team, ten staff, including the four who Mr. Buck interviewed, were surveyed by me regarding whether they had experienced or observed me engaging in punitive measures against employees for the purpose of control or if they experienced

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or observed bullying behaviors with the intent to humiliate or intimidate. All ten of the respondents who have worked with me from three to twenty-six years replied "no" or "never."

8. Allegation of arbitrary credit approval for Woodburn School District:

An adjustment of $10,000 in the total annual cost for classroom based services for the Woodburn School District for the 2007-08 school y was not an "arbitrary" action by any means. This was the first year of a pilot process for classroom slot cost calculation. Two conference calls were held with the stakeholders, data was compiled, analyzed and discussed. A decision was rendered after consideration of the specific circumstances and unique merits of the request made by the Woodburn Superintendent and Director of Special Education. Ms. Campbell participated in the process and raised no objections or concerns.

Anyone of our districts should expect and would be offered the same opportunity for consideration for review and discussion when they feel there is an issue.

Report Conclusion: Mr. Buck's report states in his introduction, but not in his conclusion, that: "It is reasonable to conclude that Dr. Casey's supervisory style or behavior as alleged in this complaint has not been observed by multiple employees whom she has evaluated or supervised over the years who continue to hold her in high esteem." It would seem this statement should be included in the findings and conclusion as well.

The report attributes the investigator's conclusion to be based on " ... a majority of those in high ranking positions." This statement is not corroborated by the ten administrators who reported that they have never experienced bullying or intimidation by me personally or observed me demonstrate bullying behaviors with others or use verbal disparagement in a way that caused a hostile work environment. If the report had included specific information shared by the additional four interviewees, or interviewed more members of the administrative team, the Board would have a more balanced picture of the alleged divisiveness. By failing to include this

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information, it has the impact of giving a false emphasis to the information in the report as well as the conclusions.

39. The factual investigator interviewed 16 current or former WESD employees, most of

whom were or are Administrators supervised by Superintendent Casey, including complainant and

Superintendent Casey.

40. The Deputy Superintendent informed the Board that in November 2008, he met with

the Auditors and complainant concerning statements in the Audit Report and the method of

reporting the Fund balances and accounting for restricted funds.

41. In January 2009, complainant notified the Deputy Superintendent, as the Human

Resources Officer, of her intent to take FMLA leave for two weeks due to health concerns.

42. In June 2009, complainant requested and was granted an additional twelve weeks of

FMLA leave.

FINANCIAL IMPROPRIETIES INVESTIGATION

43. On June 5, 2009, accounting professionals from an independent accounting firm,

AKT, LLC, were engaged to assist in the investigation of allegations of financial improprieties

involving the Superintendent.

44. The accounting professionals were engaged to investigate the allegations of financial

improprieties raised in detail during the factual investigator's interviews and a tort claim notice filed

by complainant. The following issues and scope of inquiry were identified from the allegations:

a. Determine whether a payment of a legal settlement involving former employee, 1.S. was funded, at least partially, through funds derived from a Federal State pass-through grant through the Oregon Migrant Education Partnership (OMEP) and whether the use of these funds was appropriate and in compliance with the grant limitations and requirements. Further, determine if any regulatory reports documenting the use were in fact filed with the appropriate entities;

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b. Determine whether the District has aggregated unspent resolution funds and/or regional funding provided to the WESD for specific component districts by resolution process or regional funding sources which, if not utilized or disbursed during the fiscal year, were aggregated in a general fund with WESD operating funds and used without regard to the limitations or impressed purposes after aggregation. In simple terms, determine whether the aggregation of special purpose funds have been used to inflate the bottom line of WESD for reporting to the Board of Directors and others, without proper authority from the component district which owns the funds;

c. Review and analyze the sources of funds accumulated in Fund 698 at WESD, and advise of the use of these funds during the fiscal year 2008 - 2009. Also determine if Dr. Casey had oversight and exercised authority in the use of funds in Fund 698. Finally, determine if the funds in Fund 698 were used in accordance with any limitations from the source of the funds that ultimately came in to Fund 698.

d. Analyze whether WESD has paid penalties to the IRS or Oregon Department of Revenue for deficiencies in payroll reporting, the extent of any penalty payment, and the funds to which the payment, if any, was charged. Advise whether the fund that was charged ultimately for the payroll penalties, allows the payment of such obligations with the funds designated. Determine if any regulatory reports documenting the use were in fact filed with the appropriate entities.

e. Determine how program slot costs are determined for the Special Education Program, whether discounts or forgiveness of obligations have occurred, on what standard or rationale, and who has the authority or who authorized such dealings on behalf ofWESD.

45. On August 20, 2009, preliminary draft reports of the accounting firm engaged to

investigate alleged financial improprieties by complainant were issued on each of the questions

provided to the accounting firm for investigation.

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46. On August 25, 2009, Superintendent Casey provided a preliminary response to the

factual investigator's preliminary draft report and the financial investigator's preliminary draft

reports, which were provided to the Board Directors.

47. On August 25, 2009, the Board inquired of the financial investigator investigators

concerning the preliminary draft findings and the responses and information provided by the

Superintendent in her preliminary responses.

48. The accounting professionals fmancial investigators reports m relation to the

questions posed determined:

a. Issue 1- Fund 284- OMEP Funds.

Review documentation and transactions pertaining to a payment of a legal settlement involving a former employee, to determine if the payment was funded, at least partially, by funds derived by a federal/state pass-through grant to the Oregon/Mexico Education Partnership (OMEP) under the Catalog of Federal Domestic Assistance (CFDA) 84.11 Migrant Education Program, and whether the use of these funds was appropriate and in compliance with the grant limitations and requirements. In addition, the accounting professionals were asked to determine if any regulatory reports documenting the use were in fact filed with the appropriate entities.

The financial investigators findings determined:

b. The $20,000.00 legal settlement involving a former employee is unallowable under the grant on two counts. First, journal entries support documenting the nature of this expense could not adequately show its relevance to the OMEP grant. Second, the expenditure was charged on December 31, 2008, outside the allowable range of grant (February 1, 2005-September 30, 2005).

c. The overall OMEP grant was found to have the following expenditure determinations:

SUMMARY

Allowable Costs

Indeterminable Costs inside the grant period Indeterminable, Unallowable Costs Outside the Grant Period Unallowable Costs Inside the Grant Period Unallowable Costs Outside the Grant Period

TOTAL

$33,351.74 $ 5,813.l8 $ 3,556.70 $ 678.00 $20,000.00 $63.399.52

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$5,813.08 was found to be indeterminable as to relevance due to a lack of supporting documentation. Supporting documentation may ultimately be found for $3,556.70 in costs, but are deemed unallowable because they were reported outside the grant period. Unallowable costs (both inside and outside the grant) had available supporting documents but were not found to have relevance to the grant (including the $20,000.00 discussed in fmding "a" above).

d. If WESD asserted that the $20,000.00 legal settlement was paid with fund 274 revenues other than this sub-grant, our resulting finding would be that an additional $20,000.00 deficiency in reported expenditures was present in this grant, in addition to our calculations of $659.48 discussed above.

e. Indirect costs charged to this grant will require adjustment in proportion to the allowable costs ultimately agreed to by the WESD.

f. There was insufficient written support in WESD's files for the grant funding ultimately requested and funded via EGMS system by WESD staff.

49. Regional Program Funds

a. Issue 2 - Fund 271- Regional Program Funds.

We were requested to prepare a summary schedule for fiscal years 2006-2009 to highlight whether WESD had aggregated unspent School District funds and/or Oregon Department of Education Regional Funding provided to the WESD, which if not utilized or disbursed within the fiscal year, were aggregated in the general fund with other WESD operating funds and used without regard to the regional program limitations or express purposes. In other terms, we were requested to determine whether the aggregation of these special purpose funds have been used to inflate the general fund bottom line of WESD for reporting to the Board of Directors and others, without proper authority from the component districts which own the funds.

Issue 2, Findings:

b. An aggregate of $500,000.00 of Fund 271 regional monies was held and inappropriately reported as an unreserved general fund balance during fiscal years 2005/06 and 2006107.

c. WESD's 2007/08 audited financials disclose the $500,000.00 reserved for school districts in the general fund, as part of a $1,222,846.00 reported reserve for BSSF/SIF, on its June 30, 2008 balance sheet.

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d. There was insufficient internal accounting department documentation, and Board of Directors meeting discussion and resolutions on this matter.

e. The language regarding unspent dollars in the various agreements and understandings documents is unclear and cannot be reconciled to accounting transactions recorded for the time periods studied.

f. Assuming that proper process and reporting were followed, we would have expected to note fund transfers that would not impact revenue recognition in Fund 271 and the general fund related relative to the $300,000.00, $200,000.00, and $500,000.00 amounts discussed here.

g. As of June 30, 2009, the Fund 271 balance of $645,161.00 appears to properly reflect the accumulative carry over in that fund's reported annual activity, however, our limited procedures were not designed to give assurance on this figure based on WESD fmancials taken as a whole.

h. We found no Board of Directors or budget committee discussions or resolutions for the fmancial activities discussed in this report.

l. Communication by WESD management to school districts about unused regional funds carried over these years was inadequate.

50. Issue 3- Fund 278 and Fund 698

We reviewed and analyzed the source of funds accumulated in Fund 698 and advised on the use of these funds during fiscal years 2008 and 2009. More specifically, we were asked to determine if the funds in Fund 698 were used in accordance with any limitations from the source of funds that ultimately came into Fund 698, and whether these funds were used in accordance with these limitations. Finally, we were asked to determine who had oversight and exercised authority in the use of funds in Fund 698.

Issue 3, Findings:

a. By June 30, 2005, Fund 698 had accumulated unused special programs money totaling $1,575.297.00. We did not identify any statutes, component school district agreements or other justifications that would indicate the vast majority of these monies were for anything other than unused component school district monies for special programs.

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b. During fiscal years 2005/06-2008-09 Fund 698 reported significantly less activity than in preceding years, with fouryear total program expenditures of $383,816.00 and total program revenues of only $186,366.00, both reported as entirely related to school district funds. Together with an unknown minor difference of $100.00, the resulting June 30, 2009, balance in Fund 698 is $1,377.917.00. It appears that during these fiscal years, there were changes in accounting practices to record most program activity in Fund 278 (OTMC only) and various other 100, 200 and 600 type funds, without the corresponding transfer of the aggregated $1,575,297.00, opening balances for those other programs to ongoing activity in the new funds. There is insufficient documentation of the reasons, and approvals for, these accounting changes.

c. Some programs reported in Fund 298 and Fund 698 included revenues other than school district monies, the largest being Audiology 1231 and OTMC 2220. For the most part, these and other smaller programs reported small unused program balances, and total expenditures exceeded the non-school district revenues for those programs.

d. Our procedures did not include tracing program activity in fiscal year 2005-06 onward to funds other than Fund 698.

e. In summary, fmding "a" through "d" addresses events resulting in the June 30, 2009 balance of Fund 698 of $1,377.917.00, the vast majority of which relate to school district programs.

f. In addition to findings "a" through "e", during fiscal year 2006-07, program specific balances in Fund 698 were transferred intra-fund into an object code called "nondesignated special program service", thus losing the individual special program balances that existed in prior years. As shown in supplementary documentation, this same type of movement was found for early intervention (EI) services, program 1262 ($144,910.00 from EI program to non-designated) during fiscal year 2003-04 in fund 278, and in the Medicaid Program 2135 at June 30, 2005 ($27,310.00 from the non-designated to Medicaid). There is insufficient documentation of the reasons, and approvals for these accounting changes.

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g. As shown in supplementary documentation, during 2003 the Medicaid Program 2135 unused balance of $20,833.00 was transferred to Fund 241 McClaren SIP without sufficient documentation and approval.

h. We found no Board of Directors or Budget Committee discussions or resolutions for the above fund balance adjustments.

1. The fiscal year 2004-05 grant compliance audit (single audit) sites a reportable condition on page 47 regarding lack of adequate internal controls, including supervisory approval, over adjusting journal entries such as the ones mentioned in the findings above. In addition, regarding budget preparation and adoption matters, in each of the fiscal years 2004/05- 2007/0808, the independent auditors cited significant differences between estimated beginning fund balances and actual closing fund balances. These auditor's findings are consistent with the accounting practices environment which resulted in the unexplained adjustments in this report.

J. Supplementary information reports a Fund 278 June 30, 2006 aggregate balance of ($2,002,419.96). The individual program balances showing in this year with a substantially offsetting negative figure in the non-designated special programs balance do not reflect true program level balances for this fund, but rather the lagging effect of beginning fund balances originally posted to Fund 278 that preceded the [mal establishment of those balances in Fund 698, which is of no concern to this report. However, if it hasn't been completed already, the program level balances should be corrected within this fund.

k. We are not able to find written documentation of who at WESD had oversight and exercised authority in the use in Fund 698 monies.

51. Issue 4- Federal Payroll Tax Payment Penalties.

We were requested to analyze whether WESD paid penalties to the IRS or Oregon Department of Revenue for deficiencies in payroll reporting, the extent of any penalty payment, and the funds to which the payment, if any, was charges. In addition, we were asked to advise as to whether the monies that were ultimately charged for the payroll penalties allow the payment of such obligations with the funds designated. Lastly, we were asked to determine if any

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regulatory reports documenting the use were in fact filed with the appropriate entities.

Findings:

a. WESD staff adequately resolved the payroll tax deposit issues for each of the quarters discussed above, paid the amounts agreed to with the IRS, and insured that its payroll tax deposit record was clear for those periods.

b. Based upon the correspondence from the Oregon Department of Human Services, reimbursement amounts received from Medicaid Services are WESD unrestricted funds, thus available to use in funding the IRS payments summarized above.

c. WESD was not able to provide written documentation and authorization of the $42,396.24 fund transfer discussed above.

d. We found no Board of Director discussions in the minute books on this topic.

52. Issue 5- Program Slot Costs and Credits.

The financial investigators were asked to determine how program slot costs are determined for the special education program, whether discounts or forgiveness of obligations have occurred, on what standard or rationale, and who has authority or who authorized such dealings on behalf ofWESD.

Findings:

a. Documentation was extracted from local service plan express, showing Woodburn School District's fmal2007/08 cost at $12,544.00 per slot, and an adjusted balance owing of $1,818.00. We read the supporting expenditure calculations in a separate worksheet that derive the final $12, 544.00 per slot cost for the overall MarionIPolk program.

b. Supplementary documentation shows how the final $12,544.00 per slot cost was used in recalculating amounts due from, or owed to, the various MarionIPolk School Districts for the program. From these figures the calculated amount owed by Woodburn School District is reported as $11,818.00. A $10,000.00 discretionary credit, per Sue Foster, is referenced, resulting in an adjusted balance owing of$I,818.00.

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c. Supplementary documentation shows a summary of the Woodburn School District slot cost for the program in question, along with two other programs. The final $12,544.00 per slot cost is referenced together with the $11,818.00 original figure, and a hand notation is made about the $10,000.00 credit that was granted.

d. WESD personnel represented that verbal approval was given on the $10,000.00 credit by Dr. Casey. We are unable to find written confirmation of Dr. Casey's approval.

e. WESD granted Woodburn School District a $10,000.00 discretionary credit outside of the normal fiscal year-end slot cost adjustment process for the 2007/08 MarionIPolk structured learning program elementary and middle schools.

53. On September 15,2009, Superintendent Casey provided additional responses to the

findings of the accounting professionals determinations and findings:

Fund 284-0MEP: authorization of expenditure for legal fees

The revenue collection for this program fund shows over $90,000 of which only approximately $64,000 was receipted as a federal source. Two former WESD fiscal staff reviewed the records independently and corroborated that the federal grant funds were expended.

The AKT report states: " ... we noted revenues other than this Sub Grant totaling $32,952 in this fund, $27,839 of which was reported prior to the February 1. 2005 start date of the Sub Grant." This provides the documentation that substantiates the basis for the decision to approve the use of the remaining funds. They were nonfederal and not part of the grant award/responsibilities.

The authorization for expenditure of $20,000 was intended to come from the remaining non-federal unused local revenue portion in this fund that has been inactive since 2006. These funds were not subject to the original grant requirements as they were additional, nonfederal revenue and the original grant activity requirements had been completed and reported.

The federal grant project ended on Sept. 30, 2005. In dealing with federally funded grants, any unused federal dollars that have been collected are returned to the source at the close of the program. Since expenditures exceeded the federal fund resources only nonfederal funds should be remaining. This program fund has been inactive since the fiscal year 2006, therefore any remaining balance in the fund should be non-federal, discretionary.

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Ms. Campbell did not notify me of any possible confusion or concern that the remaining funds might be federal. Had she notified me of any concern I would have reconsidered my authorization for the expenditure and the transaction easily would have been posted to another fund. Fiscal personnel report this course of action would have been a standard operating procedure and addressed internally as a routine business action.

Fund 271- Regional Programs Funding Reporting

Unlike other resolution services, there are three revenue sources for Regional Program Services: funding from the State Department of Education; resolution resources; and contracted services.

Any unexpended districts' Regional Transfer funding was included with the subsequent year's District Regional Transfer Budget line item, dedicated to Regional Programs exclusively and to be transferred as needed only after all state allocated funds had been expended. These funds are categorically assigned to Regional Program expenditures only and may not and have not been used for any other purpose. Because the funds are in a transfer budget, when the board approves the overall budget, the historic interpretation by the business office has been that the authorization to transfer the funds as needed already had been provided. Board approval for transfer requests for other funds that were not already included in the budget document was obtained as needed.

Rationale for carryover of unexpended Regional funds:

~ State funding for Regional Programs has been eroding over the past decade is unpredictable, at best, and has fallen short of the essential budget level for maintenance for several biennia.

)y Our Region's percentage increase in the number of eligible students is one of the highest in the state.

)y Regional services are mandated by state and federal laws, with districts required to provide them.

)y Every legislative session, further cuts and elimination of Regional funding is recommended. Final decisions are made too late for budgeting purposes, usually well after district budgets have been adopted.

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>- Highly specialized staff must be recruited from out of state year round. It is common to have unfilled positions at the end of a year that still need to be filled. Without carryover, ability to recruit and hire would be impacted significantly.

>- District funds are secure in that they cannot be spent for any other purpose.

>- 100% of the reserve is now needed to cover the current funding shortfall. Given the recent economic downturn and severe budget cuts, most districts would not have been able to come up with the necessary funds to cover the shortfall, creating an untenable fiscal hardship well after their budgets had been adopted.

Our cash carryover did not disclose these regional transfer funds as such, but was an aggregate total of these plus our other unexpended funds in the General Fund. This is not an unusual practice. In reviewing the two largest ESD's methods in reporting their year-end carryover for this time period, one did split out their unexpended resolution dollars and the other did not. I have been informed there are no legal requirements for how the funds must be reported. It has been a long standing WESD business office practice that could easily be changed.

Funds 278 & 698

Prior to the funding equalization formula that provided ESDs with State School Funds to supplement the loss in property tax collections, most of the funding that provided services to our districts came in the form of contract funding, either state, federal or local from our districts. Over the course of the implementation of that equalization from the State, many of our services transitioned from a contractfunded status to a resolution-funded status. When the equalization formula started providing our districts with a more adequate amount of resolution funding, the business office moved our accounting for those programs from contract funds (200s and 600s) to the General Fund. The 278/698 funds are a compilation of unused funds from some of our special education services, as well as other services such as workshops, trainings and supplemental support provided to our districts and others (statewide) that has accumulated over the course of many years. To the best of my recollection, the business office combined all of our contract funds into one fund, 278, which then was reclassified as fund 698 when our State funding increased and used this as a reserve fund for any need that may arise.

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Additional specific details would need to be provided by the fiscal office.

Federal PayroU Tax Deposit Penalties

The CPA Finn AKT, LLP, found no wrong-doing as substantiated by the Department of Human Services in their email of 7-27-09.

Program Service Cost Adjustment for Woodburn School District

An adjustment of $10,000 in the total annual cost for classroom based services for the Woodburn School District for the 2007-08 school year was not an "arbitrary" action by any means. This was the first year of a pilot process for classroom slot cost calculation. Two conference calls were held with the stakeholders, data was compiled, analyzed and discussed. A decision was rendered after consideration of the specific circumstances and unique merits of the request made by the Woodburn Superintendent and Director of Special Education. Anyone of our districts should expect and would be offered the same opportunity for consideration for review and discussion when they feel there is an issue.

54. Board Reports. Between July 2007 and May 2009, an employee of the business

office prepared a schedule entitled "Willamette Education Service District Fiscal Report" for fund

status each month by reviewing the end-of-month fund balances in each of the fund types. This

report identified the fund, the budgeted amount, what had been received during the monthly period,

what had been expended during the monthly period, and the balance of the fund. The fund status

reported the status of the general fund, combined grants and projects, building reserve fund, vehicle

equipment reserve fund, debt service funds, internal services funds and a total of all funds, in

addition to the performance of the investment portfolio. The employee in the business office

forwarded these reports to the Director of Fiscal Services.

55. Business Office employees reported that a negative status in any of the funds was

unacceptable to the Superintendent.

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56. The Director of Fiscal Services provided to the office of the Superintendent adjusted

monthly fiscal reports that differed in the entry of one category of funds, the internal service fund,

which differed in the amount reported as the balance owing.

57. Expenditures appeared the same in many reports, but not all. The Superintendent

provided the reports to the Board. In each monthly report other than the May 2009 report, the

business office employee report differed substantially from the report provided to the Board of

Directors. The balance reported to the Board in internal service funds was always much more

favorable to the District (i.e. not a negative balance).

58. WESD accounts for its funds in a hybrid method, accrual accounting for expenses

and cash accounting for receipts. In other words, expenses are booked to the accounts when an

expense is accrued or payable, whether paid or not; and receipts are booked when actually received.

59. It is unclear whether the adjustments to the internal service funds were made by the

Director of Fiscal Services or in the office of the Superintendent. However, it appears, that fund

transfers occurred among various funds, both intra-fund and inter-fund transfers, to make the

balance of the indirect service funds appear more positive than reported by the business office

accounting staff.

60. There is no evidence of approval of inter-fund or intra-fund transfers by resolution

by the Board of Directors for transfers supporting adjustment to the indirect service funds on a

monthly basis.

61. This Board, as the direct supervisor of the Superintendent and charged with the

application of WESD Policies GBNA and GBM, consistent with its obligations under WESD policy

BCD, is faced with a difficult determination; whether to adopt the factual findings and conclusions

of an independent investigator, well experienced in personnel matters and school district

administration, who interviewed 16 WESD employees, including the complainant and the

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Superintendent, and four employees at the specific request of the Superintendent in relation to this

complaint and a similar complaint filed approximately the same time; or to discount the detailed

factual report, analysis, and conclusions based on the statements of the Superintendent.

This Board is also hampered, as are all entities performing a quasi-judicial function, with not

having observed firsthand the conduct of all parties. This Board has considered each of the findings

and each of the responses and information provided by the Superintendent and her attorney and the

analysis and discussion of each of the facts and information provided by all parties.

The Board and its members have not observed the type of interaction complained of by the

complainant in Board member interaction with the Superintendent. However, the evidence that is

persuasive is the complainant's and other witnesses' specific recitation of the events set forth in the

investigator's report, which leads to a conclusion that the conduct is more likely than not to have

occurred as described by the complainant and other administrative personnel interviewed.

This Board is mindful that the Superintendent has a markedly different version of the events;

however, this Board is persuaded, for the same reasons the factual investigator addressed, that the

credibility of the superintendent is colored by interest and a lack of candor in relation to knowledge

of the reporting obligations ofWESD funds.

Accordingly, this Board adopts the findings and conclusions of its factual investigator stated

in his preliminary report.

62. This Board, as the direct supervisor of the Superintendent, is also faced with

additional allegations of financial improprieties by the Superintendent, duties which are set forth in

Oregon statute and Administrative Rules and specifically set forth in WESD policies which direct

the Superintendent to supervise all personnel and comply with duties to provide accurate

information periodically to this Board concerning the fmancial status of this agency, and to comply

with District policies and regulations as adopted by this Board.

FINDINGS OF FACT K. CAMPBELL Page 40 of45

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63. The Superintendent's employment contract provides, in pertinent part:

Duties:

As Chief Executive Officer of the District, the Superintendent shall perform the duties of District Superintendent as prescribed by laws of the State of Oregon with additional powers and duties set forth in the District policies, rules and regulations and as the School Board may direct. The Superintendent shall have the responsibility for the administration of the District under the direction of the Board; shall direct and assign staff for the District; shall organize, reorganize, and arrange the administrative and supervisory staff as best serves the District; shall suggest policy regulations, rules and procedures deemed necessary for the efficient function of the District, and in general, perform all duties incident to the office of Superintendent. The responsibility for all personnel matters including selection, assignment, and transfer of personnel shall be vested in the Superintendent subject to approval by the Board. The Superintendent shall have the right to attend all Board meetings, except Executive Sessions held to discuss the Superintendent's employment status and all Board and Citizen Committee meetings. She shall serve as an ex-officio member of all Board committees and provide administrative recommendations on each item of business considered by each of these groups. The Superintendent shall have the primary responsibility for execution of Board policy, whereas the Board shall maintain the primary responsibility for formulating and adopting the said policy. Members of the Board, individually and collectively shall promptly refer all criticism, complaints and suggestions called to its attention to the Superintendent for analysis and recommendation. * * *

64. The obligations of the Superintendent were set forth in statute and District policy,

including the obligations under ORS 327.019 (8) to distribute to its component school districts any

amount of local revenues of the Education Service District that is greater than the General Services

Grant in a manner that prorates such funds on the District extended AdmIW of each school district.

65. ORS 334.177 requires that the Education Service District shall expend at least

90.00% of all amounts received from the State School Fund and at least 90.00% of all amounts

considered to be local revenues of an Education Service District, as defined in ORS 327.019 on

FINDINGS OF FACT - K. CAMPBELL Page 41 of 45

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services or programs that have been approved by the component school districts of the Education

Service District through the resolution process described in ORS 334.175.

66. An Education Service District shall spend 100.00% of all amounts received from the

School Improvement Fund on services or programs that have been approved by the component

school districts the Education Service District through the resolution process described in

ORS 334.175.

67. ORS 334.185 provides that an Education Service District may provide

entrepreneurial services and facilities under contract or on a reimbursable basis. Expenditures by

the Education Service District Board for entrepreneurial services and facilities provided on a

reimbursable basis under this section shall be limited to the monies received for the purpose

specified and are not subject to local budget law, but are subject to annual financial report to the

component school districts.

68. This Board, having considered all of the information from the factual investigator,

the financial investigators and the information provided by the Superintendent as set forth above,

hereby adopts the factual findings and conclusions of the factual investigator and the fmancial

investigators as to the allegations of complainant's complaint.

a. Specifically, this Board finds that the Superintendent did not keep the Board

fully and accurately informed about District programs, especially the financial

status of the ESD required under WESD policy DBA.

b. The Superintendent did not adequately supervise the Business Services

Department to ensure proper compliance with state statute and District policy, in

accounting for funds and reporting these funds on a periodic basis to the District

Board in compliance with WESD policies CO and DBK.

FINDINGS OF FACT K. CAMPBELL Page 42 of 45

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c. This Board finds that the Superintendent did not take the steps to make the

Board aware of any substantial changes in expected revenues or unusual

expenditures so that the Board may adjust budgeting as required by WESD

policy DBJ.

d. The Board finds that the Superintendent did not take steps to fully comply with

the requirements of the OMEP Grant in compliance with WESD policies DDA,

DE, DEB and DEC.

e. The Board finds that the Superintendent and designees did not provide monthly

financial reports that were accurate and fairly and correctly stated the ESD' s

overall financial condition as required by WESD policy DIC.

f. The Board finds that the Superintendent engaged in intimidation and bullying as

set forth in the factual investigator's report which caused the business services

department to engage in inaccurate reporting and intra-fund and inter-fund

transfers in an effort to present a more favorable light on District finances.

69. Fund 284-0MEP.

a. The Board finds that set forth in the reports of the financial investigators set forth

above, that at the direction of the Superintendent, funds subject to federal grant

regulation as a federal/state pass through grant for the Oregon Mexico Education

Partnership were improperly used by the District to fund, in part, a legal

settlement payment outside of the grant time and use parameters.

b. The Board finds that the Superintendent failed to ensure that the use of grant

funds were consistent with the grant limitations and District policies DD, DE,

DEB, DEC and CG.

FINDINGS OF FACT· K, CAMPBELL Page 43 of 45

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70. Fund 271.

a. The Board additionally finds that in relation to the accounting for regional

monies during fiscal years 2005/06 and 2006/07, Fund 271, earmarked for

regional funds, was inappropriately reported as part of an unreserved general

fund balance in 2005-06 of $300,000.00 and in 2006-07 in the sum of

$200,000.00.

b. The Board finds that the 2007-2008 audited financial report did disclose the

$500,000.00 reserved for school districts in the general fund as part of reported

balance and reserve for BSSF/SIF as of June 30, 2008.

c. The Board finds that the Superintendent and business office did not obtain Board

of Director resolutions for transfers of funds between the General Fund and the

Special Revenue Fund 271 either by failing to timely transfer or transferring

funds from special revenue Fund 271 and reporting as general fund, or

transferring the funds from the general fund to Fund 271 in January 2009.

d. The Board finds that communication by WESD management to school districts

about unused regional funds carried over was inadequate, contrary to the

requirements ofWESD policy DI and DIE.

71. Fund 278 and 698.

a. The Board finds that Superintendent violated District policy in transfers from

special revenue Fund 278 for various special programs, to an internal service

fund by intra-fund transfer contrary to District policy DBK and DDA by failure

to obtain Board of Director resolution and adequate documentation of the

reasons and approvals for the accounting changes and transfers.

FINDINGS OF FACT - K. CAMPBELL Page 44 of45

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72. Federal payroll tax penalty payment.

a. The Board finds that the Superintendent failed to report the payment of IRS

payroll tax payment penalties, although the use of WESD general funds was

appropriate to correct a clerical filing error.

73. Program slot costs.

a. The Board finds that the Superintendent has properly engaged staff to determine

the program slot costs for special education programming by cost accounting

analysis which accurately is reflected in local service plan menus and contracted

service menus.

b. The Board further finds that the slot costs are adequately disclosed to component

districts for each available resource to the component districts and are discussed

and negotiated with the component school districts annually.

c. The Board finds that the Superintendent provided a discretionary $10,000.00

credit based upon negotiations with Woodburn School District.

74. This Board upholds, in part, the complaint of complainant and directs legal counsel

to assist it in determining what disciplinary action is warranted in relation to this complaint and the

complaint of complainant "A" involving similar allegations to this complaint, up to and including

termination of the Superintendent's contract for cause.

FfNDlNGS OF FACT K. CAMPBELL Page 45 of 45

n:\wpdocs\94112001\findings of fact-campbell.doc MBC 9122109152845

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Se;m E. AtnlStnmg J ('.h •• mrng Bennett + Mark R Comstock I'.ut A lhk"I'"lo, T:unmy M. Den'itw-r Gonion R. Ilanna

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Rran 1'. Hun'

Kelly 0. Noor l.ocas W. Reese

.lui .. C Rice Spencer C Rodwell JohnC Young

GARRETT HEMANN ROBERTSON ec

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September 22, 2009

Goo,&" M. )mn"'~ John E. Pollino'

J Kevm Shu'" Theresa M. Wade' IImccl\. Z""",r

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Anthonj.- R.. Kn:dT..bcrg" f Admercd In ON. and Ml"

Denms S, Reese

)OAnW. R=

Via Email

MARK TRUMBO

Via Email: mitrumbWiJ.verizon.nel

DORA VELASCO

Via Email: dvelascWiJ>voodbum.k12.or.us

JACK STOOPS

Via Email: iwsIpop@Unedlber.com

PHIL FREY

Via Email: {repCiiJchemeketa.eau

LARRYTROIT

Via Email: Larry. TrotKti>state.or.u. .. Facsimik: 814-337-2617

ATTN: Larry Trott, Room 217

FRANK W. PENDER, JR.

Via Email: tanglewoodtimher@ttolcom

ED DODSON

Via Email: edanddonaldt(iiJJ:omcast.net RUTH HEWETT

Via Emm/: mtbelgigns@.a()(.fom

MICHAEL EICHMAN

Via Email: meichman(ti!yamhillheadst(lTl.org

Re: Findings of Fact and Conclusions - Kathy Campbell and Ann 0 'Connell Our File No. 94 J J 200 1

Dear Board Members:

Attached are draft Findings and Conclusions relating to the complaints of Kathy Campbell and Ann O'Connell. I do apologize for the delay in transmitting these documents but, as you can see, they are extensive. I will provide hard copies of these documents at tonight's Board meeting.

Should you have questions, please feel free to contact me.

Very truly yours,

~

Mark B. Comstock mcomstock@ghrlawyers.com

MBC:amp Enclosures

c: Dave Novotney, PhD (w/enclosures) (Via Email) - Confidential

Willamette Professional Center' 1011 Commercial Sf. NE, Suite 210 Mailing Address: P. O. Box 749 • Salem, Oregon 973084>749

(503) 581-1501 ·1-800-581-1501 • Fax (503) 581-5891 • www.ghrlawyers.com

• ••

Echols. Keli

From:

Sent:

To:

Subject:

Attachments:

Novotney, Dave

Tuesday, September 22, 2009 3:51 PM Echols, Keli

FW: Findings of Fact K. Campbell Complaint Our file 94112001 Findings of Fact-Campbell.pdf

Importance:

High

---~~.-~-~-.- .. '~" .. ---~.- .. -~ ~ -.- .....•.... ~.- - ~~.~~ ".

From: Mark B. Comstock [mailto:mcomstock@ghrlawyers.com] Sent: Tuesday, September 22,20093:45 PM

To: Stoops, Jack; Dodson, Ed; Novotney, Dave

Cc: Amy M. Pickett

Subject: Findings of Fact K. campbell Complaint Our file 94112001

Jack, Ed and Dave:

Attached is the draft findings of fact and conclusions relating to the Complaint of Kathy Campbell. Copies will be forwarded to the Board members via email or fax. I will bring copies to the Board meeting.

«Findings of Fact-Campbell.pdf»

Mark B. Comstock mcomstock@ghrlawyers.com Garrett Hemann Robertson P.e.

Willamette Professional Center > 1011 Commercial St. NE, Suite 210 Mailing Address: P. O. Box 749 • Salem, Oregon 97308~0749

(503) 581-1501 ·1-800-581-1501 • Fax (503) 581-5891 • www.ghrlawyers.com

Except to the extent that this advice concerns the qualification of any qualified plan, to ensure compliance with recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including any attachments, is not intended or written by us to be used, and cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government or for promoting, marketing, or recommending to another party any tax-related matters addressed herein.

This message is confidential and may be protected by attorney-client privilege and the Electronic Communication Reporting Act, 18 USC 2511, et. seq., as amended. If you are not the intended recipient or agent for the intended recipient, you are not authorized to disseminate or copy this message. Please destroy the message and all attachments after notifying the sender. Thank you.

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