Millions, Secret Stipends and a Federal Prison Sentence: Why St. Joseph Still Struggles to Trust Its School District
For many people in St. Joseph, distrust of the St. Joseph School District did not begin with the recent budget shortfall, debates over closing schools or arguments about how the district should be reorganized.
It goes back more than a decade.
What began as questions about a handful of $5,000 payments eventually exposed millions of dollars in poorly documented stipends, questionable compensation practices, promotions that auditors said were not properly supported, contracts made without adequate board oversight, an FBI investigation, federal grand jury subpoenas and, eventually, the conviction of one of the most powerful figures in the district's history.
Former superintendent and school board president Dan Colgan ultimately went to federal prison after admitting that compensation reported through the St. Joseph School District had been improperly inflated, allowing him to collect hundreds of thousands of dollars in retirement benefits he was not entitled to receive.
More than a decade later, the names and circumstances have changed. There is no evidence that the district's current financial problems involve theft or a criminal scheme like Colgan's.
But once again, the public has been confronted with a disturbing question:
How could the district's financial picture become so much worse than people were led to believe?
That question is exactly why the scandal of the past still matters today.
It Started With $5,000
The scandal that eventually shook SJSD did not begin with the FBI or Dan Colgan.
It began with school board member Chris Danford learning that 54 administrators had received $5,000 stipends under then-Superintendent Fred Czerwonka.
Danford told KCUR that she first learned about the payments through a chance conversation at a high school basketball game. What initially appeared to be a relatively small issue quickly grew into something much larger. The payments totaled roughly $270,000 and had been made without prior approval from the full Board of Education.
The controversy prompted closer scrutiny of the district's finances, and what investigators and auditors found went far beyond those original payments.
The Missouri State Auditor determined that SJSD had paid approximately $3.8 million in stipends during the 2013-14 school year alone. Over the previous eight years, annual stipend payments averaged approximately $3.3 million, with several types of stipends stretching back to at least the 2000-01 school year.
Auditors did not say every stipend was illegal or stolen. That is an important distinction.
What they did find was a system riddled with problems.
The audit said many stipends were not included on board-approved salary schedules, documentation was often inadequate, and significant amounts of additional compensation had been distributed without the knowledge or approval of the Board of Education. In some cases, auditors could not determine why certain additional payments were being made at all.
Administrators were receiving additional money for things such as travel, night duty, participation on the superintendent's council and other responsibilities. The auditor even questioned why some administrators were being paid additional stipends for duties that appeared to already be part of their jobs.
The state's conclusion was devastating: salary negotiations had been occurring with very little oversight or approval from the board.
The Man Who Started Asking Questions
While Danford was asking questions from the board side, newly hired Chief Financial Officer Beau Musser was raising concerns from inside the district.
Musser had been hired in 2013. As he began looking through district finances, he also questioned the stipend system.
Then things became ugly.
Musser was placed on administrative leave after accusations of sexual misconduct. He denied the allegations and later filed a lawsuit against the district.
According to allegations in Musser's lawsuit, Czerwonka and Human Resources Director Doug Flowers offered to resolve the allegations and buy out Musser's contract if Musser would stop pursuing the stipend issue. Those claims were allegations made in civil litigation and were not criminal findings.
An outside investigation cleared Musser, and he eventually returned to work.
The district later agreed to pay $450,000 to settle Musser's slander lawsuit, with the settlement containing no admission of wrongdoing.
By then, however, the financial questions Musser and Danford had raised could no longer be contained.
The FBI was investigating. Federal grand jury subpoenas followed. The Missouri State Auditor was digging into district records. An IRS audit was eventually added to the growing list of outside investigations.
What began with $5,000 stipends had become a full-scale examination of how the St. Joseph School District had been handling public money.
The Audit Exposed a Culture of Weak Oversight
The state audit painted a picture of a district where financial controls had been allowed to become dangerously loose.
There were problems with salary schedules and employment contracts. Some employees received compensation that did not match approved schedules. Promotions were not always adequately documented. The district was criticized over contracts, overtime controls, related employees, additional compensation and compliance with Missouri's Sunshine Law.
One promotion became especially controversial.
Mark Colgan, Dan Colgan's son, worked as the district's warehouse supervisor and received a promotion that came with a raise of more than $15,000. The state audit found that the promotion was not supported by documentation detailing the additional job responsibilities and noted that the salary schedule for the new position required a master's degree, which Mark Colgan did not have. His position was later eliminated during district cuts.
There were also allegations reported by KCUR that Dan Colgan had supported the controversial administrator stipends in exchange for his son's promotion and raise. Dan Colgan denied that allegation, and it was never established as part of his criminal conviction.
That distinction matters because the scandal produced plenty of documented wrongdoing without needing to blur the line between allegations and proven facts.
And eventually, investigators found something they could prove.
Investigators Reach Dan Colgan
Dan Colgan was no minor figure in St. Joseph education.
He had spent nearly four decades with the district and served as superintendent from 1992 until his retirement at the end of 2005. He later returned to district leadership after being elected to the Board of Education, eventually serving as board president.
As investigators looked deeper into years of compensation practices, questions arose about the salary that had been reported for Colgan when his state pension was calculated.
The federal case that followed is sometimes misunderstood.
Colgan was not convicted of simply taking $662,000 from an SJSD bank account.
What prosecutors proved was more complicated.
Missouri's public-school retirement system calculated Colgan's pension using his highest three consecutive years of reported salary. Colgan admitted that he caused others to report compensation as salary that legally should not have been counted toward that pension calculation.
During Colgan's final three years as superintendent, SJSD reported his salary to the retirement system as totaling $586,030.
According to federal prosecutors, his actual eligible salary totaled $343,286.
That was a difference of $242,744.
The inflated amount included compensation such as car and travel allowances, family insurance premiums, district vehicle payments, a $25,000 annuity contribution and an unused-vacation payment — benefits prosecutors said were not legally eligible to be counted as salary for pension purposes.
The scheme began during the 1997-98 school year and continued until Colgan retired.
Over the following decade, prosecutors said Colgan received $677,313 in excess pension benefits. His plea agreement required him to pay $662,660 in restitution.
In June 2016, Colgan pleaded guilty to one count of federal wire fraud.
In November of that year, the former superintendent and former school board president was sentenced to one year and one day in federal prison without parole. He completed his court-ordered restitution at sentencing.
For a community already furious over secret stipends and weak oversight, the conviction confirmed that at least one piece of the scandal went well beyond sloppy bookkeeping.
A former leader of the district had committed a federal crime.
The Fallout
By the time the dust began to settle, much of SJSD's old leadership structure had been dismantled.
Fred Czerwonka was fired as superintendent following the state audit. He later accepted a position as director of school services in the Caruthersville School District in southeast Missouri.
Chief Operating Officer Rick Hartigan was fired.
Human Resources Director Doug Flowers was demoted before eventually reaching a $32,000 severance agreement to leave the district.
Dan Colgan resigned from the Board of Education in March 2015 before eventually pleading guilty and serving his federal prison sentence.
Mark Colgan's district position was eliminated. He was never criminally charged in connection with the federal investigation. Mark Colgan died in 2020 at the age of 42.
Beau Musser eventually left SJSD in 2015. Today, his public professional profile lists him as working as a fractional CFO after later serving as controller for the City of St. Joseph.
Chris Danford remained on the school board for a time but resigned in 2017.
Her reason is perhaps one of the most important pieces of this entire story.
Years after helping expose the original stipend controversy, Danford said she still did not trust the information coming from the district without independent verification.
“I no longer trust information provided, nor do I believe the community expects that without ongoing verifications,” Danford said when announcing her resignation. That was 2017.
Nearly a decade later, the issue of trust has returned.
Then Came Another Massive Financial Surprise
In the summer of 2025, SJSD once again found itself trying to explain how the district's financial position had become far worse than expected.
The circumstances are different from the Colgan scandal, and that needs to be made clear.
There is currently no public evidence that the recent budget shortfall was caused by theft, embezzlement or intentional fraud.
Instead, district officials and an outside financial review pointed toward inaccurate budgeting assumptions, declining enrollment and attendance, delayed federal reimbursements, limited property-value growth and other financial problems.
But the size of the mistake was difficult to ignore.
Financial documents reported losses of approximately $11.9 million in fiscal year 2024 and an estimated $11 million in fiscal year 2025 — nearly $23 million combined. Other reporting and the district's outside review described budgeting errors totaling tens of millions of dollars in recent years.
Even more troubling was how quickly the picture changed.
KXCV reported that despite the district believing in June 2025 that it was in good financial condition, later adjustments pushed its reserve ratio down to around 10 percent, roughly half of the district's 20-percent target. The district subsequently began looking for approximately $8 million in budget reductions over the coming years.
SJSD brought in Linda Quinley, executive finance director for the Missouri School Boards' Association, to conduct an outside financial review.
Quinley found multiple contributing factors. The district had lost more than 1,200 students in recent years, reducing state revenue. Federal reimbursements had not always been requested quickly enough. St. Joseph's limited growth in assessed property values also restricted local revenue. She recommended regular budget reviews, more detailed questioning from board members and better processes for seeking reimbursements.
Quinley also emphasized that SJSD was not in a financial crisis at that point, while warning that failure to improve its practices could eventually put it there.
And the financial pressure has not simply disappeared. The district's preliminary FY27 budget presented in 2026 projected another operating shortfall of roughly $3.6 million, while the district continues attempting to rebuild its reserves and restructure expenses.
The Difference Between Missing Money and Lost Trust
It would be unfair — and inaccurate — to say SJSD simply “lost another $23 million” in the same way Dan Colgan fraudulently increased his pension.
They are not the same situation.
One resulted in a federal wire-fraud conviction.
The other, based on the information made public so far, appears to involve major budgeting mistakes, falling revenue, inaccurate projections and inadequate financial planning rather than someone stealing money.
But there is a reason many people in St. Joseph instinctively connect the two.
Both stories are ultimately about oversight.
How closely is the Board of Education examining the numbers placed in front of it?
Who is questioning assumptions?
How quickly are warning signs being recognized?
And when the district tells the public its finances are healthy, how confident should taxpayers be that the numbers are accurate?
Those questions are not unreasonable in St. Joseph.
The state auditor once found a district where millions of dollars in additional employee compensation had been distributed through a system plagued by poor documentation and inadequate board oversight.
A subsequent federal investigation proved that a former superintendent's compensation had been falsely reported in a way that dramatically inflated his retirement benefits.
A whistleblower who helped uncover the problems later left the district after a bitter legal fight.
A board member who helped expose the scandal eventually resigned saying she still could not trust district information without independent verification.
And now, years later, the district is once again explaining how financial projections were wrong by millions of dollars.
SJSD Has Changed — But Trust Has to Be Earned
It would also be wrong to pretend nothing changed after the original scandal.
Policies were tightened. Personnel changed. Financial oversight improved. SJSD now maintains a public transparency section and publishes financial records, budgets, audits, purchases and other information through its website.
The people running the district today are not automatically responsible for mistakes made by Dan Colgan, Fred Czerwonka or administrators who worked in SJSD more than a decade ago.
But institutions inherit history.
And SJSD's history includes one of the most damaging public-trust scandals this community has experienced.
That means district leaders face a higher burden than simply telling residents everything is under control.
They have to show it.
They have to make financial information understandable. Board members have to ask uncomfortable questions before a problem becomes a crisis. Major changes in financial projections need clear explanations. Outside reviews should be welcomed rather than feared. And when mistakes happen, the people responsible for them should be identified and the public should be told exactly what went wrong.
That isn't hostility toward public education.
It is accountability for an institution entrusted with educating thousands of St. Joseph children and spending well over $100 million in public money every year. The district's own current financial pages emphasize transparency and responsible stewardship as core responsibilities of its business office.
The lesson from the Dan Colgan era should never have been simply that one man committed fraud.
The larger lesson was what can happen when oversight fails, questions are not asked soon enough and a culture develops where financial practices are allowed to continue simply because that is how they have always been done.
St. Joseph learned that lesson the expensive way once.
That is why, when another enormous financial problem surfaces years later, residents remember.
And that is why the real deficit SJSD continues trying to overcome may not be measured only in dollars.
It is the deficit of trust.
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