Continued from page 1

The highly publicized case accused St. Hope Academy - founded by Mr. Johnson - of mishandling some of the $850,000 it received in CNCS grants, which came out during the Sacramento mayoral race. The report said Mr. Johnson used grants to pay volunteers to engage in school board political activities and to run personal errands for Mr. Johnson.

St. Hope Academy has promised to repay about half of the money.

Mr. Brow accused Mr. Walpin of overstating conclusions in his investigation, withholding information to the U.S. attorney’s office and for publicizing the case in the press when he should have keep matters confidential.

But the Senate Finance Committee’s top Republican, Sen. Charles E. Grassley of Iowa, has denounced Mr. Walpin’s termination and praised him for identifying millions of dollars in wasted or misspent grants.

“It appears he had been doing his job,” the senator said. “We cannot afford to have inspector general independence threatened.”