State sues ex-school chief, seeks $615,000

The former superintendent of a small southern Indiana school system owes the district more than $615,000 in public money that he misappropriated, according to a lawsuit filed by Indiana Attorney General Greg Zoeller’s office.

Marion “Al” Chapman was fired as superintendent of Cannelton City School Corp. in December 2011, after more than six years in the position. The State Board of Accounts this month released an audit that revealed misappropriation including:
— $206,688.27 Chapman authorized payments to himself beyond his contract through payroll or annuities;
— $333,333.33 gifted to the school as a trust intended to fund high school improvements but instead was depleted to pay general fund operating expenses;
— $50,185.64 in attorney fees stemming from Chapman’s discontinuation of paying taxes;
— $9,000 in unallowed prepaid travel allowances, and;
— $1,241 in penalties, late fees and charges the schools accrued under Chapman’s leadership.

Chapman also is asked to pay the $15,157.89 cost of the audit in the civil suit filed in Perry Circuit Court.

The lawsuit also asks for an injunction to freeze Chapman’s assets, including bank and retirement accounts and vehicles. Perry Circuit Judge Lucy Goffinet on Friday signed a temporary restraining order and scheduled a hearing for Aug. 30 on the state’s motion for a preliminary injunction, a statement from the AG’s office said.

“The amount that the audit found misappropriated is simply shocking even without the misuse of a trust fund gift worth one-third of a million dollars; but what’s truly disheartening is that a top school official – a person to whom teachers, students and parents ought to look to for leadership – has drained public school funds intended for children’s education in order to overpay himself. This is a betrayal of the public trust, and my office will use all our legal tools to make this individual reimburse the school system,” Zoeller said in a statement.

The lawsuit also names as a defendant Indiana Insurance Company, which carried a $1 million errors and omissions policy on Chapman. The suit seeks to collect on the policy to reimburse the school system for the loss.

With 240 students enrolled last year, Cannelton City Schools is the second-smallest non-charter public K-12 school system in the state, according to Indiana Department of Education data.