Philadelphia school official steps down amid pay allegations

The Philadelphia School District's top human resources administrator stepped down Wednesday amid allegations of nepotism and that she awarded pay raises to certain individuals while the district was laying off employees and contemplating further academic cuts.

Estelle G. Matthews, the district's chief talent development officer, was escorted out of school administration headquarters at 6 p.m. Wednesday, according to sources inside and outside the district who had knowledge of her departure.

The abrupt exit of Matthews - a close friend of former Superintendent Arlene C. Ackerman's - happened after The Inquirer asked questions about individual raises of as much as $25,000. It also follows a preliminary report the district's inspector general recently gave the School Reform Commission from an internal investigation that found several questionable pay increases totaling more than $80,000 to Matthews' friends and their relatives. There were also allegations that Matthews' son was hired and held jobs although he lacked qualifications.

The controversial pay raises - ranging from $4,500 to $25,000 - were initiated by Matthews and granted in July and September, even though the district was shedding 3,800 jobs to help close a $629 million funding gap.

The Inquirer had been expecting to receive Friday the final pieces of information from the district about seven specific raises in response to a request filed Oct. 27 under the state's Right-to-Know Law.

The circumstances surrounding Matthews' departure are not yet clear. Her last day was Wednesday, according to a district employee who answered her phone.

Matthews could not be reached for comment.

District spokesman Fernando Gallard said Thursday he could not confirm Matthews' departure.

"We do not have an official announcement," Gallard said. "When we do . . . we will be sharing it."

But earlier, he had confirmed that a policy the SRC adopted Nov. 23 requiring all promotions and salary changes to be approved by a new committee was in response to district officials' concerns about recent raises.

Gallard said that in addition to the inspector general's probe, the administration was conducting an inquiry led by the law department. That review is examining seven pay increases and related issues, he said.

Matthews joined the district in December 2008, after serving as senior vice president of human resources at what was then Wachovia Bank from 2005 to 2008. Her district salary was $185,400.

During her district tenure, Matthews was involved in several controversies, including moving to fire several administrators who had filed legal challenges, and selecting a $1.1 million online system to track job applicants that would have cost more than twice as much as two other options and taken three times longer to implement.

At that time, in fall 2010, Matthews told The Inquirer she preferred the Kenexa Corp. system because "it was like a Volkswagen vs. a Cadillac."

Faced with mounting financial woes, the district scrapped plans to hire Kenexa but agreed to pay the company up to $75,000 for preliminary work.

In all, the district has made 130 changes for nonunion jobs since July 1, according to documents provided to The Inquirer. In most cases, employees applied for new posts as the district reorganized after massive budget cuts and layoffs in the central office.

Many of those employees did not receive raises with the changes. In other cases, departments elected to reduce salaries to avoid layoffs. But at least seven of the 73 raises that were granted stirred rancor.

According to complaints that spread throughout the district, Matthews allegedly gave preferrential treatment to her friends and their relatives and to Ackerman allies. Many, but not all, of the questioned raises were for employees in the human resources department Matthews supervised.

John F. Downs, the district's inspector general, confirmed Thursday that his office began a probe several weeks ago in response to complaints about nepotism, new job titles, and raises. He recently gave the SRC a draft report of his investigation.

"There are questionable pay increases and promotions," he said. "Very questionable."

Downs said his investigation continues. He declined to comment further.

But district sources said questions also were raised about whether Matthews' son Marlon Garrett was qualified for the posts he has held. He did not receive a raise recently.

Garrett, district records show, was hired Dec. 8, 2008, just three days after Matthews was appointed. His job as a school improvement student adviser paid $24,568.

In August 2010, he was named an assistant program coordinator in the alternative-education department with a salary of $50,000. The job requirements included a bachelor's degree from an accredited college or "an equivalent combination of training and experience determined to be acceptable by the Office of Talent and Development."

District sources said Garrett took courses at Temple University but did not have a college degree. Before joining the district, he held jobs in banking and construction.

He could not be reached for comment.

The district disclosed Garrett's relationship to Matthews in documents about administrators' relatives provided to The Inquirer in February.

More recently, the newspaper asked for information and explanations about several raises: $25,000 awarded to Latipha Phillips, Ackerman's former special assistant, who was named to a post in human resources Sept. 26 that boosts her total salary to $100,000; a $10,000 raise for Leslie Lindsey, Matthews' deputy chief, whose title did not change but whose salary rose to $140,000 Sept. 24; a $12,000 increase Sharon Guess received Sept. 24 after she moved from being a project manager in human resources to payroll director Sept. 24; Melissa Alexander's $11,142 boost to $50,000 when the former recruitment assistant in human resources became a confidential secretary Sept. 24; Attayah Ali's $13,499 increase when the former coordinator in the student teaching program moved to another human resources position - program manager - July 1.

The district also is reviewing a $5,000 raise Theresa McKinzie received Sept. 24 even though her title remained executive director of school-based resources in human resources, and a $4,500 increase for Andrew Rosen, executive director of employee relations.

"We are currently reviewing the justifications for those salaries and so we are unable to provide information until we conclude our review," Gallard said.

The Inquirer also had asked about a $12,500 increase Kandace L. Lewis, daughter of Lindsey, the deputy chief development officer, received in September.

Lewis had been a regional and parent ombudsman who was paid $42,500. She was laid off July 2 when the district eliminated all those positions. Lewis was rehired in mid-September as a manager in the Office of Community Relations for Partnerships with a salary of $55,000.

According to Gallard, the position was posted on the district's website. A district panel scheduled interviews for three candidates who met the qualifications. One person did not appear. Lewis, Gallard said, scored one point higher than the other applicant and was hired.

He said Lewis' job was not one of the seven the administration was reviewing.

Within the last year, Matthews was involved in three controversial efforts to fire administrators. In May, she fired the payroll director who had been providing documents to the IRS as part of an in-depth audit of district financial practices. At the time, Matthews reportedly said Eileen Pelzer had not informed supervisors of the broadened inquiry. Pelzer challenged her firing.

In the spring, Matthews recommended removing two administrators who had been placed on paid leave during a district inquiry into leaks to The Inquirer about a $7.5 million no-bid contract for security cameras awarded to a small minority firm.

John L. Byars, who had been the district's chief procurement officer, has challenged the district's efforts to fire him. He filed court papers last month signaling that he intended to file a slander and libel suit against the district, the SRC, Ackerman, Matthews, and others.

Francis X. Dougherty, former deputy chief business officer whom the SRC fired in April, filed court documents in June indicating that he intended to sue for wrongful termination under the state's whistle-blower protection law.

Inquirer staff writer Susan Snyder contributed to this article.