POINT PLEASANT - State Board of Education members declared a "state of emergency" in Hampshire County schools Wednesday, after an audit revealed that top Hampshire school administrators hired employees illegally and misspent state grants that former Delegate Jerry Mezzatesta solicited.Hampshire schools Superintendent David Friend and Mezzatesta, a $60,000-a-year board office administrator, were named throughout a 33-page audit report released at Wednesday's state school board meeting in Mason County.Hampshire board office employees told auditors that Friend and Mezzatesta "threatened, verbally abused and intimidated them." They alleged that Friend ordered them to do things that were "highly irregular."One board office employee broke down in tears last month when she spoke with audit team members, fearing retaliation from board office administrators, according to the report."It was a breakdown of leadership at all levels," said state schools Superintendent David Stewart.State school board members ordered him to launch investigations of Hampshire's hiring practices, grants and other "serious deficiencies" at the board office.Board members also directed Stewart to send a team of education consultants immediately to Hampshire County and report back within 60 days. Afterward, the county will have six months to fix the problems or face a state takeover.Hampshire County school board President Brenda Pyles, who attended Wednesday's meeting in Point Pleasant, declined to comment on the report."We need to show this to the rest of the board and go from there," said Pyles, a strong supporter of Friend and Mezzatesta.The team of auditors from the state Office of Education Performance Audits inspected Hampshire's central office last month.They found at least two state grants that weren't spent as intended. Mezzatesta helped to secure both grants.A $100,000 "staff development" grant from the Department of Education went to pay substitute teachers. Most of a $75,000 grant intended for special education students went to seven volunteer fire departments in Hampshire County. Mezzatesta diverted the education funds to the fire departments, letters show."I'm sitting here with a grave sense of outrage," said Priscilla Haden, a state school board member.Board members plan to demand that the grant money be returned, if investigators confirm it was misspent."It's state money. It's taxpayer money," said board member Lowell Johnson. "It's important that we send a message that when we issue a grant, it's to be used for the purpose for which it was specified."The audit team also determined that Hampshire schools improperly sent leftover federal migrant student money to a Regional Education Service Agency in Martinsburg.The auditors also targeted Hampshire schools' hiring practices.In 2003, the school board illegally hired Mezzatesta's sister, Tammy Moreland, as Hampshire High School's principal, according to the report.Mezzatesta sat on a committee that interviewed three applicants for the high school job. Moreland wasn't a candidate the first time around.The three applicants were qualified and certified for the job, but Friend readvertised the position on Mezzatesta's recommendation."The three applicants are knowledgeable, but I feel we may have to readvertise for a broader base," Mezzatesta wrote in a memo.After a second round of interviews, Moreland was hired, even though she wasn't certified as a principal. The other candidates had more experience and were certified, according to the report.Moreland privately negotiated her salary with the school board, a highly unusual practice, according to the audit team. She's paid $72,000 a year, $4,300 more than she would have received if the board followed the school system's administrative salary schedule.Mezzatesta also brought a man into the school board's office and told the personnel director, "Take care of him," according to the report. The man was hired as an after-school program assistant, even though he wasn't properly licensed. The position was never advertised.State school officials said illegal personnel practices were widespread in Hampshire County."In almost all the cases, the people with the highest qualifications weren't hired," said Kenna Seal, who directs the state Office of Education Performance Audits.The auditors also raised questions about Mezzatesta's $60,000-a-year "community specialist" job at the Hampshire school board. The report says Mezzatesta was hired under suspicious circumstances, and the school board has repeatedly changed his job title and duties without advertising the position."The day-to-day activities of the person in this position need to be reviewed to determine the need for such a cost," the report states.Last year, Mezzatesta pleaded no contest to a charge that he deleted or altered legislative computer records at the state Capitol. The nine-term delegate was removed as House Education chairman, and he lost his re-election bid to a Republican newcomer. State employees told investigators that Mezzatesta took part in an elaborate cover-up to fend off allegations that he improperly solicited state grants and lied to the state Ethics Commission.Hampshire County school board members have declined to take disciplinary action against Mezzatesta. Friend has stood by Mezzatesta throughout the investigations.The audit team found that Friend's son, D.J. Friend, was hired illegally. Friend's son works for Hampshire County schools, but gets paid through the regional education service agency in Martinsburg. The job was never posted in Hampshire County.D.J. Friend was working as an alternative education aide at the high school without a proper license, according to the report. He also was paid for three weeks in July, even though the alternative program isn't open in July.David Friend, who's out of the office on medical leave until March, could not be reached for comment. Mezzatesta also could not be reached. He has denied soliciting any grants for Hampshire schools.To contact staff writer Eric Eyre, use e-mail or call 348-4869.