Correct option is C
In the given sentence, "The art history teacher was sacked after she were thought taking school supplies," the highlighted part contains a grammatical error in using "were" instead of "was" and an awkward phrasing with "thought taking."
The correct substitution should convey that the teacher was caught doing something wrong.
Option (c) "she was caught" appropriately substitutes the highlighted segment and corrects the grammatical error.