By Jackie Burrell
Tuesday, September 30th, 2008 at 1:03 pm in Schools.
The economy is tanking, Wall Street is crumbling … and the Mt. Diablo school district is in trouble with the IRS for failure to pay payroll taxes again. Ah, some things never change. This time around, the Internal Revenue Service is levying the Mt. Diablo school district for $833,000 in unpaid payroll taxes and penalties from 2006-07. And once again, Superintendent Gary McHenry didn’t bother to notify the board that his administration had just incurred its sixth – at the very least – major IRS violation since 2002. McHenry never told the board about the other five penalties either. They found out about those from the Times, courtesy of a July 15, 2005 investigative piece written by yours truly. But this time around…
… it was board member Gary Eberhart who spotted the $833,000 whoops on a spreadsheet the board received in their contract negotiation background packets, more than a year after the penalties were incurred. And McHenry — who insisted back in 2005 that he was going to get “his house” in order after a payroll management meltdown so extreme, the state’s fiscal crisis response team had to come in to help, and then last spring announced that he is not responsible for the district’s budget – is blaming staff turnover for the latest IRS snafu.
See, his payroll manager and the chief financial officer – that would be McHenry protege Gloria Gamblin, whose shaky qualifications we questioned back in 2005 when she was hired – resigned just around the time those IRS payments should have been made. Um, really? Because by our reckoning, she didn’t go on “medical leave” until November 2007 and only retired in February of this year. And last time we checked, 2006-07 ended in… hmmm.
Want to hear about the other IRS problems? A public records request to the district in 2005 uncovered five IRS penalties in a span of two years – 2002 and 2003 – for late or incomplete quarterly tax payments. Penalties ranged from $4,555 to $418,364. So first, the district tried pleading to the IRS that it had “a history of paying our taxes by the due date.” Uh no, you don’t, they replied. “That’s when we wrote the letters and groveled,” assistant superintendent Dick Nicoll told the Times in 2005.
Nicoll said he told the IRS that the district’s former payroll manager – not the one a county investigator had deemed incompetent, but her predecessor – had hidden the penalties. Nicoll assured them then that the district was back on track. So the IRS waived all but the smallest fine.
Wonder what plea they’ll be using this time around?