Court: Candidate owes agency

By Emily Richmond

Tuesday, Sept. 23, 2008 | 2 a.m.

A candidate for the State Board of Education owes the Nevada Education Department more than $500,000, according to a court’s finding involving a program she ran to provide aid to needy students.

The Nevada Education Department sued Willia Chaney’s company seeking repayment.

In August, a District Court judge ruled for the department and ordered Chaney to pay back the money.

From 1993 to 1999 Chaney operated a federally funded program to provide meals to poor children during summer vacations and other school breaks. The state shut down the Smart Start Summer Food Service Program in 1999 after the inspector general identified $1.01 million in questionable expenses.

“We believe the pattern of fund misuse existed over a number of years,” investigators said of the program, funded by the U.S. Agriculture Department and administered by the Nevada Education Department.

In an interview Monday, Chaney said she disagrees with the audit’s findings and plans to appeal.

“We feel like we need to clear our name,” she said.

Chaney is running for the District 3 seat on the State Board of Education, which sets policy for the Nevada Education Department and the state’s school districts.

The legal dispute should have no bearing on her candidacy, Chaney said, because if elected she would abstain from any action related to the lawsuit. Having worked with young children at a day-care center and high school dropouts at a beauty school, Chaney said she understands the challenges facing public schools.

“My goal is to go up there and work with the others” on the board, said Chaney, a 48-year resident of Clark County. “It’s not about going up to settle a score.”

But Keith Rheault, Nevada’s superintendent of public instruction, said he’s concerned about the possible conflict of interest if Chaney is elected. “It could become a serious distraction,” he said.

Doris Wallace Fletcher, who is also seeking the District 3 seat, said Chaney’s legal woes should be a red flag to voters. When asked why she was more qualified for the post than Chaney, Fletcher, who served four years on a school board in California, said: “She owes the state money. I don’t.”

Chaney has argued that the state shut down Smart Start without giving her an opportunity to respond to the audit or make corrections. She filed a lawsuit in 2000 against the U.S. Agriculture Department and the Nevada Education Department. The lawsuit was dismissed.

Investigators determined Smart Start was serving fewer children than it claimed in requests for reimbursement. The breakfasts and lunches were to be delivered to 13 apartment buildings in Las Vegas and North Las Vegas.

Investigators said James Chaney told them “the inflated meal counts were due to errors on the part of the site employees.”

Also among the audit’s findings:

• More than $250,000 was paid in salaries to 15 Smart Start employees, “even though they apparently did little or no work” and no time cards were maintained. Chaney’s husband, James, served as the program’s director and her son and daughter were on the payroll.

• Federal money was used to purchase five vehicles. The titles were in the Chaneys’ names rather than in the name of the Smart Start program.

• The program’s costs included $2,000 a month paid to Chaney’s day-care center, Smart Start Daycare, for use of its kitchen and parking spaces. Investigators determined the food program’s facility had ample parking, and the child-care center was paying $1 a year to lease its entire location.

Chaney continues to run Smart Start Daycare and the Expertise Cosmetology Institute, which serves mostly young women who dropped out of high school.