Follow the money

Audit: NYC issued $2.7 billion in noncompetitive education contracts — and often violates its own rules

PHOTO: Alex Zimmerman
City Comptroller Scott Stringer criticized the city's ability to keep track of education technology in July.

The city’s education department routinely violated state law and its own policies in issuing contracts worth billions of dollars — mostly awarded without a competitive bidding process.

That’s according to a blistering audit released Friday by city Comptroller Scott Stringer, the first major audit to scrutinize contracting by the de Blasio education department. It found that the department issued $2.7 billion contracts without a competitive process in fiscal year 2016, or roughly 64 percent of all spending on contracts.

The education department routinely failed to properly oversee its vendors, paid them late, and often directed them to begin work before proper paperwork was filed with the comptroller’s office, according to the audit.

“This investigation shows that DOE acts as though the rules don’t matter,” Stringer said in a statement which included 20 recommendations to fix the process. “When it comes to contracting, this is an opaque agency that refuses to accept responsibility, that often uses inaccurate arguments to defend backwards organizational practices.”

Some highlights:

  • Out of 521 “limited competition” contracts, the city directed vendors to begin work before filing appropriate paperwork on 85 percent of them. In one case, a contract was filed two and a half years after the vendor began work.
  • The education department did not correct sloppy oversight of vendors, despite a 2015 audit that urged them to do so. In some cases, “there was no evidence the DOE conducted performance evaluations, as required by the DOE’s own procurement rules,” the audit found.
  • The DOE spent $2 million to pay for “goods or services that had already been improperly purchased in violation of DOE’s procurement rules.”

Stringer’s findings come less than a month after the comptroller blasted the city’s management of education technology in a separate audit that found the education department has lost track of thousands of computers and failed to create an appropriate tracking system for them. Stringer’s harsh criticisms of Mayor Bill de Blasio’s education department come shortly after endorsing the mayor’s re-election bid.

The Bloomberg administration also faced sharp criticism for awarding contracts without soliciting competing bids. The administration’s critics said the mayor was inappropriately applying business practices to public spending. But Joel Klein, Bloomberg’s longest-serving chancellor, dismissed the criticism, saying he’d “never seen [an audit] that didn’t say you couldn’t follow procurement rules a little closer.”

Will Mantell, an education department spokesman, said the city’s procurement process is “rigorous” and “many of this audit’s conclusions are incorrect.”

“We perform background checks on all vendors and post them online, maintain the appropriate documentation on procurements, and recently implemented an electronic performance evaluation system,” Mantell added.

legal action

Lawsuit over poor conditions in Detroit schools gets its first day in court, as state officials seek to end it

PHOTO: Public Counsel
Attorneys behind a new federal civil rights lawsuit meet with Osborn High School college advisor Andrea Jackson and student Jamarria Hall.

A lawsuit filed nearly a year ago over the conditions in Detroit schools had its first day in court Thursday, but it could be a month before a judge rules whether it can proceed.

The suit, filed in September on behalf of seven Detroit students, argues that Gov. Rick Snyder and state education officials have deprived city students of their right to literacy by not spending adequately on local schools.

The 136-page complaint paints a bleak picture of life in the city’s schools, describing condoms strewn on playgrounds, bathrooms leaking sewage into hallways, students left to grieve without support, and classrooms without qualified teachers. The suit claims that these conditions make learning difficult in Detroit schools — a conclusion that a recent study bears out.

Snyder petitioned in November to have the suit dismissed, arguing that the condition of Detroit’s schools isn’t the state’s fault. The hearing today focused largely on that question, and the judge in the case, Stephen Murphy, said he would rule within 30 days on whether to let the case move forward.

State-appointed emergency managers ran Detroit’s schools directly for six years, until one year ago, and union leaders issued a statement Thursday laying the blame for local schools’ struggles solidly on state officials.

“The state created these poor learning conditions, and now Gov. Rick Snyder and Attorney General Bill Schuette are further abdicating their responsibility to the children of Detroit by moving to dismiss this case,” said the leaders of the Detroit, Michigan, and national chapters of the American Federation of Teachers. “All these children and families are asking for is what we owe all families — great, well-resourced public schools where parents want to send their kids, teachers want to teach, and children are engaged.”

If the case does move forward, it could take years to resolve. School funding equity cases —  currently pending in more than a dozen states, including Tennessee and New Mexico, where arguments ended earlier this month — typically take years to wend their way through the courts.

Detroit schools chief Nikolai Vitti, the first superintendent hired by the new locally elected school board, told Chalkbeat that Michigan does need to spend education dollars differently.

“I don’t think the state has recognized that simply providing equal funding or near-equal funding for all children in the state of Michigan on a per pupil basis does not go deep enough and broad enough to address the issues and challenges that children in Detroit face,” he said. “There is a need for a deeper weighted formula that recognizes [special education] status, [English Language Learner] status and poverty. That would give educators in Detroit more confidence that the state is supporting the children of Detroit differently than those throughout the state.”

But he said he found the lawsuit’s core allegation, that the state had deprived city students of a right to literacy, more complicated. “It’s not the state’s responsibility in and of itself,” Vitti said. “The school district, community partners, teachers, the faith-based community, the business community — everyone has to put shoulder to the wheel when talking about literacy.”

feeling blue

New “education quarterback” organization to invest philanthropic dollars in Denver

PHOTO: Denver Post file
Nate Easley high-fives a Denver Scholarship Foundation alum at an event in 2015.

A new education-focused philanthropic collaborative is aiming to launch in Denver this fall, and it’s hired its first leader: Nate Easley, a Denver Public Schools graduate, former school board president and current head of the Denver Scholarship Foundation.

Easley is set to begin as CEO of Blue School Partners in October. The nonprofit organization plans to act as Denver’s “education quarterback,” soliciting local and national foundation dollars to fund initiatives to grow the ranks of talented teachers and principals, increase the number of high-achieving schools, and ramp up demand from families for those schools, leaders said.

“My philosophy has always been to connect the dots,” Easley said.

The establishment of an “education quarterback” is a concept promoted by Education Cities, a national network of city-based organizations that push for school autonomy. Education quarterbacks in other cities, such as The Mind Trust in Indianapolis, have recruited teacher training programs like Teach for America to work with their districts, supported the development of autonomous charter and innovation schools, and advocated for school choice.

The Denver-based Gates Family Foundation is a member of Education Cities and was instrumental in starting Blue School Partners. (The foundation provides funding to Chalkbeat).

The name of the organization comes from DPS’s color-coded school rating system. Blue is the highest rating in the system, which heavily weights student test scores, academic growth and progress in closing achievement gaps. Last year, 12 of the district’s 199 schools were blue.

Mary Seawell, who served on the school board with Easley and who is the foundation’s senior vice president for education, said Blue School Partners was born of a desire among local funders to accelerate Denver Public Schools’ progress.

DPS is nationally known as a hotbed of education reform. It has more than 100 charter and innovation schools, and it was recently recognized as the best in the country for school choice. Innovation schools are operated by the district but have autonomy similar to charter schools.

However, the 92,000-student district also has lofty goals, including that 80 percent of students in each of the city’s regions will attend top-performing schools by 2020. Last year, those percentages ranged from a low of 35 percent in the far northeast part of the city to a high of 67 percent in the southeast region, according to DPS data.

“This started with a group of people looking at the data and seeing what the gap was … and what was the likelihood they’d get there without significant support,” said Seawell, who is on Blue School Partners’ founding board of directors.

Funders hit upon the idea that they could accomplish more if their efforts were coordinated and their investments were driven by a community-based organization, she said.

To be part of Blue School Partners, foundations must make a three-year commitment to contribute to the organization’s operating costs and fund one or more of its initiatives, Seawell said. Foundations must also agree not to give money to initiatives that are taking on the same issues in Denver as Blue School Partners, she said.

In addition to the Gates Family Foundation, Blue School Partners was founded by the national Walton Family and Laura and John Arnold foundations, with the input of other local leaders. (The Walton Family Foundation is a financial supporter of Chalkbeat). None of the foundations have made public how much money they will contribute.

Other foundations may join, as well. The national Michael and Susan Dell Foundation told Chalkbeat it is “evaluating the opportunity.” Several local foundations were interested to first know who the CEO would be before committing, Seawell said.

Blue School Partners conducted a nationwide leader search, though Seawell said the board was hoping for someone local. The decision to hire Easley, a DPS parent who has spent nearly a decade as CEO of the Denver Scholarship Foundation providing need-based scholarships to mostly first-generation college students, was unanimous, she said. Easley is a graduate of Denver’s now-closed Montbello High School and was on the school board from 2009 to 2013.

“His commitment and his passion are so real and that’s what’s going to drive him,” Seawell said. “He cares about the highest-needs kids.”

Easley said his first order of business will be to come up with a strategy for achieving Blue School Partners’ goals. While he won’t have specifics until after the launch, he said he imagines it will involve making sure existing schools have well-trained, culturally diverse staff, and ensuring promising new schools have proven leaders and access to buildings.

He emphasized that the organization won’t solely focus on charter schools, a common target for critics of DPS school reforms. However, Easley said he hopes that in talking with families about the need for high-quality schools, he’ll be able to disabuse them of the notion that charters are bad or private. (All of DPS’s charter schools are operated by nonprofits.)

“It’s getting past the noise and having a conversation with people who have the same goal that we have, and that is that their kid have a quality education,” he said.

DPS Superintendent Tom Boasberg said he looks forward to working with Easley on the evolution of Blue School Partners, especially since similar organizations have been successful in supporting innovative ideas in other cities.

“We think Blue Schools has great potential to bring additional resources and to facilitate learning and collaboration across district-run schools and charter schools,” Boasberg said.