Former Pontiac school superintendent reaches settlement in Michigan

A former superintendent of the financially troubled Pontiac School District who alleged he was fired for exposing fraud and misuse of school funds has agreed to a $100,000 settlement to drop his whistle-blower lawsuit.

Jonathan N. Brown, a former Pontiac athletic director and principal, was hired as interim superintendent in July 2011 and soon after launched an investigation into the management of school funds. He found the school district's deficit had doubled to about $25 million and the system was in danger of losing all state funding, according to his lawsuit, filed in Oakland Circuit Court in February 2012.

Brown claims he was fired in November 2011, less than two months after he reported suspected fraud and embezzlement to Michigan Department of Education officials, his attorney Deborah Gordon said Thursday.

"His contract was only for a year, so his actual damages are limited," said Gordon, explaining how she and attorneys for the school district agreed to an evaluation of damages by a three-attorney panel.

"We think this indicates his findings of serious problems in the district were correct."

Gordon said Brown faced retaliation after objecting to improper expenditures that were in violation of the school district's debt elimination plan. Among his concerns were allegations of unauthorized payments to staff; suspected misappropriation and overspending in several grant funding sources; contracts with vendors without proper approval; and misuse of district credit cards.

"His findings are still being investigated by state and federal agencies," said Gordon, who did not elaborate.

Attorneys hired by the school district and its insurance company would not comment Thursday.

A state report sent to district officials May 8 said the Pontiac district has a $37.7 million deficit and was in danger of missing payroll.

Late last week, the state agreed to release school aid funds after the district submitted a revised deficit cutting plan.

Meanwhile, the district's current superintendent, Brian Dougherty, tendered his resignation effective today, saying his job with the district "was not the right fit."

Dougherty is the second superintendent to leave since Brown was fired.