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.

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.


More than 1,000 Memphis school employees will get raise to $15 per hour

PHOTO: Katie Kull

About 1,200 Memphis school employees will see their wages increase to $15 per hour under a budget plan announced Tuesday evening.

The raises would would cost about $2.4 million, according to Lin Johnson, the district’s chief of finance.

The plan for Shelby County Schools, the city’s fifth largest employer, comes as the city prepares to mark the 50th anniversary of the assassination of Martin Luther King Jr., who had come to Memphis in 1968 to promote living wages.

Superintendent Dorsey Hopson read from King’s speech to sanitation workers 50 years and two days ago as they were on strike for fair wages:

“Do you know that most of the poor people in our country are working every day? They are making wages so low that they cannot begin to function in the mainstream of the economic life or our nation. They are making wages so low that they cannot begin to function in the mainstream of the economic life of our nation … And it is criminal to have people working on a full time basis and a full time job getting part time income.”

Hopson also cited a “striking” report that showed an increase in the percent of impoverished children in Shelby County. That report from the University of Memphis was commissioned by the National Civil Rights Museum to analyze poverty trends since King’s death.

“We think it’s very important because so many of our employees are actually parents of students in our district,” Hopson said.

The superintendent of Tennessee’s largest district frequently cites what he calls “suffocating poverty” for many of the students in Memphis public schools as a barrier to academic success.

Most of the employees currently making below $15 per hour are warehouse workers, teaching assistants, office assistants, and cafeteria workers, said Johnson.

The threshold of $15 per hour is what many advocates have pushed to increase the federal minimum wage. The living wage in Memphis, or amount that would enable families of one adult and one child to support themselves, is $21.90, according to a “living wage calculator” produced by a Massachusetts Institute of Technology professor.

Board members applauded the move Tuesday but urged Hopson to make sure those the district contracts out services to also pay their workers that same minimum wage.

“This is a bold step for us to move forward as a district,” said board chairwoman Shante Avant.

after parkland

Tennessee governor proposes $30 million for student safety plan

Gov. Bill Haslam is proposing spending an extra $30 million to improve student safety in Tennessee, both in schools and on school buses.

Gov. Bill Haslam on Tuesday proposed spending an extra $30 million to improve student safety in Tennessee, joining the growing list of governors pushing similar actions after last month’s shooting rampage at a Florida high school.

But unlike other states focusing exclusively on safety inside of schools, Haslam wants some money to keep students safe on school buses too — a nod to several fatal accidents in recent years, including a 2016 crash that killed six elementary school students in Chattanooga.

“Our children deserve to learn in a safe and secure environment,” Haslam said in presenting his safety proposal in an amendment to his proposed budget.

The Republican governor only had about $84 million in mostly one-time funding to work with for extra needs this spring, and school safety received top priority. Haslam proposed $27 million for safety in schools and $3 million to help districts purchase new buses equipped with seat belts.

But exactly how the school safety money will be spent depends on recommendations from Haslam’s task force on the issue, which is expected to wind up its work on Thursday after three weeks of meetings. Possibilities include more law enforcement officers and mental health services in schools, as well as extra technology to secure school campuses better.

“We don’t have an exact description of how those dollars are going to be used. We just know it’s going to be a priority,” Haslam told reporters.

The governor acknowledged that $30 million is a modest investment given the scope of the need, and said he is open to a special legislative session on school safety. “I think it’s a critical enough issue,” he said, adding that he did not expect that to happen. (State lawmakers cannot begin campaigning for re-election this fall until completing their legislative work.)

Education spending already is increased in Haslam’s $37.5 billion spending plan unveiled in January, allocating an extra $212 million for K-12 schools and including $55 million for teacher pay raises. But Haslam promised to revisit the numbers — and specifically the issue of school safety — after a shooter killed 14 students and three faculty members on Feb. 14 in Parkland, Florida, triggering protests from students across America and calls for heightened security and stricter gun laws.

Haslam had been expected to roll out a school safety plan this spring, but his inclusion of bus safety was a surprise to many. Following fatal crashes in Hamilton and Knox counties in recent years, proposals to retrofit school buses with seat belts have repeatedly collapsed in the legislature under the weight the financial cost.

The new $3 million investment would help districts begin buying new buses with seat belts but would not address existing fleets.

“Is it the final solution on school bus seat belts? No, but it does [make a start],” Haslam said.

The governor presented his school spending plan on the same day that the House Civil Justice Committee advanced a controversial bill that would give districts the option of arming some trained teachers with handguns. The bill, which Haslam opposes, has amassed at least 45 co-sponsors in the House and now goes to the House Education Administration and Planning Committee.

“I just don’t think most teachers want to be armed,” Haslam told reporters, “and I don’t think most school boards are going to authorize them to be armed, and I don’t think most people are going to want to go through the training.”

Editor’s note: This story has been updated.