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The Toronto District School Board has a $3-billion annual operating budget and more than 246,000 students in 595 schools.

Peter Power/The Globe and Mail

Editor's Note: All charges against Howard Goodman were dropped by the Crown on June 10, 2015. More information here

Vidyia Rego's career as chief financial officer of the Toronto District School Board ended abruptly after she raised alarm bells about a program that runs summer camps for children in inner-city neighbourhoods.

Ms. Rego told the audit committee on May 27, 2013, that the Focus on Youth program might not be following board policies for procuring goods and services or for awarding contracts, including completing criminal background checks, according to documents obtained by The Globe and Mail. The next morning, Ms. Rego was summoned to education director Donna Quan's office, school board sources say. Ms. Quan handed her a letter saying she would remain on the payroll until June 30, but was to serve that time at home – Ms. Rego had earlier given five weeks' notice she was resigning, the sources said. Two of Ms. Quan's deputies, Lou Vavougios and Gen Ling Chang, escorted Ms. Rego to her office to collect her personal belongings and then off the school board's premises.

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An ongoing investigation by The Globe has revealed details of this meeting and tensions between Ms. Rego and Ms. Quan that reverberate throughout the institution. A pattern of allegations, counterallegations, harassment claims and a lack of transparency is at the centre of the dysfunction gripping Canada's largest school board. TDSB lawyer Tony Brown said in an e-mail to The Globe that he cannot comment on Ms. Rego's "confidential employment matter."

During her 22 months as the top-ranking staffer, Ms. Quan has stonewalled trustees on several issues and gone on the attack against those who have questioned her leadership, the sources said. The toxic relations between Ms. Quan and several trustees came to a head this month over Ms. Quan's refusal to release a copy of her employment contract, thwarting a review into her performance. Education Minister Liz Sandals appointed a consultant this week to probe the board, which she says has been plagued with "almost daily examples of confrontation, obfuscation and a lack of communication."

Ms. Sandals said she had no choice but to step in after an increasingly tumultuous series of events: the sudden resignation of former director Chris Spence amid a plagiarism scandal; police officers stationed outside a boardroom meeting to keep trustees from threatening staff and each other; the departure of former chair Chris Bolton five months before his term expired; the hundreds of protesters on the front lawn of the school board over a now-cancelled Confucius Institute partnership with the Chinese government.

Five trustees, including chair Mari Rutka, wrote to the Education Minister this month, calling on her to intervene with Ms. Quan. Much of the friction revolves around the secrecy that many trustees say has kept them in the dark on major ventures. They say the frayed relations risk jeopardizing the administration of school-board business, which is conducted through the director as the sole employee of the board of trustees.

"The most important professional relationship in the entire board is being damaged by the fact that the information flow is not happening as it should," trustee Pamela Gough said.

It was not just the CFO, Ms. Rego, who raised concerns about the Focus on Youth program. The former audit committee chair, trustee Elizabeth Moyer, and another board member, Howard Goodman, pushed for more disclosure about the program and a food services company that was a major supplier to it.

Mr. Goodman wanted information about a lawsuit the board settled with Neo City, a food services company and major supplier to Focus on Youth.

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Ms. Moyer had pressured senior staff to release copies of a forensic audit report into the Focus on Youth program. Committee members were allowed to read the audit, but had to return copies to staff and the document was never made public.

Later, Ms. Moyer and Mr. Goodman both came under fire.

An independent investigator hired by Ms. Quan found that Ms. Moyer violated the board's workplace harassment policies, according to documents obtained by The Globe. "It obviously was very upsetting. It was very stressful," Ms. Moyer said. "Obviously, I was being targeted."

Mr. Brown, the TDSB lawyer, said in an e-mail that the board has an obligation to investigate all allegations of harassment affecting employees.

Mr. Goodman was charged by Toronto police this month with forcible confinement and criminal harassment relating to alleged incidents involving Ms. Quan. His lawyer said he would vigorously defend himself against the allegations.

The Focus on Youth saga dates back to mid 2012, when an anonymous letter obtained by The Globe arrived at the school board, alleging that Jim Spyropoulos, the executive superintendent who runs the program, and unnamed associates had "misappropriated" charitable community funds "for their own personal pleasures."

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Focus on Youth runs recreational programs for youths in Toronto's high-needs neighbourhoods. With $3-million in annual funding, it represents a small fraction of a school board with a $3-billion annual operating budget and more than 246,000 students in 595 schools.

Ms. Quan's predecessor, Chris Spence, asked Deloitte & Touche LLP to conduct a forensic audit into the allegations. The audit was completed in September of 2012, but Ms. Moyer said senior staff refused to give the report to the audit committee.

"The audit committee asked over and over and over again, and we were told, 'no, no, no,'" she said.

Mr. Spyropoulos also wanted the audit supressed. His lawyer, Ian Roland, said in a letter to Ms. Moyer that releasing the report could harm his client's reputation. "He contests most of the findings and assertions by Deloitte, that are critical of him, as either unjustified or exaggerated," says the letter dated Jan. 21, 2013.

Ms. Moyer was undeterred. She wrote a letter to the Education Minister, Ms. Sandals, asking for an investigation into the school board's "internal financial controls and allegations of inappropriate or illegal financial dealing."

Ms. Quan also wrote to the minister, echoing Ms. Moyer's concerns. Ms. Sandals announced on June 26, 2013, that Ernst & Young LLP would conduct a forensic audit of the school board.

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If Ms. Moyer felt vindicated, it was shortlived. Two days later, Ms. Quan began investigating her for workplace harassment in response to a complaint from Mr. Spyropoulos. He accused Ms. Moyer of once hugging him and touching his face "in a way that was unwelcome," his lawyer says in a letter. The probe concluded that her behaviour "fell well below" standards in the code of conduct for trustees.

For his part, Mr. Goodman pushed Ms. Quan to disclose details about a settlement with Neo City Café, which has a food-services lease at a school and has sued the school board over a late bid. The Globe has reported that Neo City was paid just more than $200,000 as part of an out-of-court settlement with the board.

A confidential package of documents given to trustees this week reveals new details about the transaction, including the fact that school board officials only verified outstanding invoices that were part of the settlement after agreeing to a settlement. The board agreed on May 31, 2013, to pay Neo City outstanding invoices dating back to 2010 for meals provided for Focus on Youth programs and extend its lease for 10 years. On July 3, a senior staffer sent an e-mail to Mr. Spyropoulos and other staffers, asking them to confirm the accuracy of the invoices. Mr. Brown told The Globe the invoices were not paid until mid-July, "after it was verified that the services were actually delivered."

Neo City owner George Tsiopoulos did not return a phone message from The Globe on Friday.

Mr. Goodman said in an e-mailed response to The Globe that the information was "all new to me."

It will be up to the new board of trustees to determine where the TDSB goes from here. Eleven new trustees will take their seats on the 22-member board on Monday. Mr. Goodman did not seek re-election. Several incumbents lost their seats, including Ms. Moyer and Ms. Rutka, who pushed the board to be more open during her five months as chair.

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"Mari's departure is a huge blow for the board," incumbent trustee Ms. Gough said of Ms. Rutka. "She was leading it into a period of more transparency."

How the TDSB got to this point

January, 2013: Toronto District School Board director Chris Spence resigns amid plagiarism allegations going back nearly 20 years. Deputy director, Donna Quan, is named acting director of education.

June, 2013: Ontario government says it will investigate the "financial management practices" of the TDSB after concerns are raised by acting director Ms. Quan and Elizabeth Moyer, chair of the board's audit committee.

October, 2013: Ms. Quan is named director of education.

December, 2013: Ontario government releases summary of Ernst & Young audit into the TDSB, describing a "culture of fear" and revealing that senior staff received pay hikes that contravened the province's wage-freeze legislation for public-sector workers.

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March, 2014: Police officers are stationed outside the TDSB boardroom to keep trustees from threatening staff and each other. Chris Bolton, chair at the time, requests a police presence after Ms. Quan and her three deputies tell him staff feel intimidated and threatened by some trustees. This comes after an incident involving trustee Howard Goodman, who confronted Ms. Quan at a meeting about a non-payment to a school board association.

June, 2014: Mr. Bolton resigns, five months before his term expires. His departure follows a Globe and Mail investigation revealing that he directed funds intended for a Toronto elementary school where he was principal to his own charity, according to confidential internal reviews. Trustees defeat a motion to publicly address the matter.

June, 2014: Trustees vote to delay a partnership with the Confucius Institute, which is subsidized and controlled by the government of China. They are inundated with e-mails and phone calls from concerned parents and struggle to learn details about a deal unilaterally negotiated by Mr. Bolton.

October, 2014: The TDSB officially severs its ties to the Confucius Institute.

November, 2014: Chair Mari Rutka calls on the province to intervene with the board's director, alleging Ms. Quan has blocked trustees on a number of fronts, including her refusal to release her employment contract.

Nov. 25, 2014: The Ontario government appoints education consultant Margaret Wilson to examine operational issues at the TDSB and to report back by the end of the year. Education Minister Liz Sandals says the board has become "progressively more dysfunctional and progressively more acrimonious."

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