Pending lawsuit against CCSD could shed light on district’s latest financial woes

The Clark County School District cited the costs of cybersecurity and litigation as the two primary causes of its potential $10.9 million budget deficit. An April lawsuit, in which a director who oversees technology alleges financial mismanagement in the department, could shed light on some issues behind the scenes.

“The current leadership has placed the individuals with little experience in positions to make decisions. And those decisions have undermined the progress of the technology division,” User Support Services Director III Rick Allen, who filed the lawsuit, told the Review-Journal.

In the complaint, Allen accused the school district, Chief Information Officer Marilyn Delmont and Enterprise Manager David Rosario of a “significant amount of mismanagement,” which contributed to both the cause of the district-wide data breach, and a slow, expensive response.

Interim Superintendent Brenda Larsen-Mitchell in a Sept. 27 statement, blamed the potential deficit — which was originally estimated at $20 million before being reduced to $12 million — on unanticipated increased litigation and cybersecurity expenses. In the 2024-2025 tentative budget, the district added $14.9 million to support the purchase of Fortinet Enterprise cybersecurity software and service to help protect the District from cybersecurity threats.

The allegations in Allen’s lawsuit largely outline the workplace hostility and discrimination he said he experienced. But the complaint also includes information about last year’s data breach and its aftermath as well as accusations of irresponsible use of funds that hurt schools, which could offer some insight into what may have gone on behind the scenes.

“It’s very clear that leadership doesn’t care about outcomes,” Allen said. “Their focus is really on maintaining their own positions of power.”

Litigation is pending for the case, and Allen’s attorney, Trevor Hatfield, told the Review-Journal that CCSD is unwilling to settle the case. CCSD has said it does not comment on pending litigation. Neither Delmont nor Rosario responded to requests for comment.

Delmont was hired by former Superintendent Jesus Jara, according to the school district. Rosario was hired by Delmont and became Allen’s direct supervisor, the complaint states.

Allen told the Review-Journal that even before he worked at CCSD, he had had ample experience overseeing multimillion dollar budgets. He said he has led major projects and deployed over 200,000 devices at CCSD. But during his tenure, the complaint said, that workplace hostility led him to be repeatedly retaliated against each time he pointed out what he thought was mismanagement. To date, Allen said, he has been stripped of more than 20 of his responsibilities, the most central to the case being oversight for Elementary and Secondary School Emergency Relief funding, a federal program that provided money to school districts and states during COVID-19.

ESSER funding

Allen told the Review-Journal he had a history of overseeing the ESSER budget, including successfully negotiating $5 million worth of cuts in the past, but was stripped of the responsibility as part of the retaliation he experienced.

The ESSER budget was $60.6 million, $15 million of which was supposed to be given directly to schools to help fund site-based technicians, Allen said. But the department spent $30 million on new Chromebooks, despite the fact that Google had extended the life of Chromebooks that CCSD already had, making the addition unnecessary, according to the complaint. At the same time, the department cut 26 jobs.

The complaint also said Rosario also changed the Chromebook distribution so that they were sent to a warehouse instead of schools, which meant that as of Feb. 25 of this year, 40,000 remain unused.

“CCSD might still fail in its ESSER III technology goals,” the complaint said.

Many other employees in the department have since spoken about discrimination in the department at board meetings, according to minutes from meetings.

Former Chief Financial Officer Jason Goudie met with the department staff on April 1, according to the complaint. He said that he could not justify spending $30 million on Chromebooks with no student need. He also said he could ensure that jobs did not need to be cut, but Delmont went ahead with cuts, demotions and some lateral movement for 30 staff members, Allen said.

Data breach

In an email, Allen accused Delmont of being “warned by internal and external sources of the vulnerabilities” prior to the district-wide data breach last October, but did nothing to prevent it.

“Delmont insisted she still wanted to cut the 30 jobs, which, in turn, cut services, burdened schools, and made CCSD students less safe when dealing with cyber threats,” Allen wrote.

The breach, which accessed personnel information of students, wreaked havoc in the district, including a lawsuit filed by parents for what they said was the district’s lack of information and action in its aftermath.

“This was one of the biggest hacks in state history,” Allen said.

After the fact, he said, the responses were weak and that the department spent millions of dollars on outside consultants who added little value.

Stripped of responsibilities

Beyond the public data breach, of which the public was aware, the complaint also alleges a significant amount of financial waste and mismanagement.

The complaint said that in August 2022, an employee was falsifying records and not using the proper financial system. He was not tracking millions of dollars in technology purchases and inventory. He had also been deleting reports, which are public records, and was billing non-bond work to the bond fund, the complaint said.

When Allen confronted the employee, Delmont removed his supervisory responsibility over him, naming another interim director.

The complaint also accuses Rosario of misusing funds. On Aug. 18, 2023, he used the budget to buy $600 worth of textbooks for a class he was personally enrolled in for government certification, the complaint said. The complaint added that Rosario then attempted to make it look legitimate by giving copies to the staff, despite it being unrelated to their jobs.

The complaint also said that on Jan. 22 of this year, Allen reported additional government waste from Rosario such as $4,000 on gift vouchers, $4,200 on shirts, and received no response from CCSD.

Hostility

In addition to the general mismanagement, the complaint accuses the department of having a hostile work environment, which included disrespecting Allen’s needs as someone with autism, and retaliating against him when he tried to act as a whistleblower. The complaint includes several attempts to go through channels with Chief Operations Officer Mike Casey and Employee Management Relations Director III Mollie Hall, which it said were unsuccessful.

“I tried to follow the system but the system let me down,” Allen wrote in an email. “This was the last resort.”

Contact Katie Futterman at kfutterman@reviewjournal.com.