Don't understand how this can be a major setback.  The DOE must have money available for recruitment and hiring.  The BOE should continue with the process.  Read the bylaws for the BOE and there is nothing about someone moving from the board to the organization.  The boards I have served on stipulate that a board member must wait a year after resignation from the board, before applying for a position in the organization.  This prevents a board member from creating positions or conditions in the organization for the board member's benefit.