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A powerful Chicago alderman’s sister who failed Chicago Public Schools’ selection test for principals twice will become the new principal at Gray Elementary thanks to changes in the district’s hiring policy made in July.

Catherine Sugrue has been an assistant principal at the Portage Park school for a year. She is the sister of Ald. Patrick O’Connor, 40th, Mayor Rahm Emanuel’s City Council floor leader.

Gray’s Local School Council selected Sugrue as principal in the spring. The district did not allow the promotion to go through because Sugrue had failed a principal eligibility assessment twice in the last 12 months, making her ineligible for the position. Officials said she could retake the assessment in three years.

But under a new policy approved at the July 23 Board of Education meeting, the schools chief can appoint an interim principal regardless of whether he or she passed the eligibility assessment, if the person “has a proven record of performance” demonstrating “he or she is exceptionally qualified” to serve the needs of the school. The interim status is indefinite and at the discretion of the CEO.

District officials said Sugrue has been appointed as interim principal at Gray by schools chief Barbara Byrd-Bennett. They said the policy was not changed for her and that one other principal has already been appointed under the same policy. The district said O’Connor had no role in Sugrue’s appointment.

“With the recommendation of the outgoing principal at Gray Elementary, I appointed Catherine Sugrue as interim principal to maintain continuity and ensure that students begin the new school year without disruption,” Byrd-Bennett said in a statement. “Students will continue to succeed under her leadership based on the knowledge she gained as an assistant principal, as well as her extensive career in education.”

Sugrue, who has worked as a teacher and administrator within CPS, oversaw the closings of nearly 50 elementary schools last year as the director of school transition.

According to her LinkedIn page, she has been an education consultant, worked in CPS’ office of new schools, which creates charters, and was a vice president at EdisonLearning, which manages charters for Chicago International Charter School.

Gray’s Local School Council chose Sugrue from a pool of 12 applicants. The LSC will still need to approve the appointment, according to district officials.

Neither O’Connor nor Sugrue could be reached for comment Thursday.

nahmed@tribune.com