11/2000 State Education Roundup

School Board Minutes Changed to OK Theft

Bessemer School Board member Paul Lampkin had often questioned the Alabama school district’s mounting debt, but he couldn’t get an answer until the state released an audit of the school system in May. That’s when Lampkin found that three former employees were accused of stealing thousands of dollars from the system.

Adding insult to injury, Lampkin also discovered that he and other board members had approved some of the losses. Unauthorized purchases were slipped into the unapproved minutes of board meetings, so when the minutes were approved by the board, the unauthorized purchases also were approved.

One former employee, Jatonya Bender, was accused of stealing $130,000 from the school system. She would write checks to herself, wait for them to clear, and then alter the payee to Bessemer Utilities or board attorney Joe Tucker. Former superintendent Nick Nicholson made unauthorized purchases of $30,837, and former payroll officer Kimberly Baylor paid herself $39,191 for overtime and cash advances.

“Justice won’t be reached until all people who have been involved in the corruption have been convicted,” Lampkin told The Birmingham News.
The Birmingham News
September 6, 2000

Education Department Can’t Keep Track of Tax Dollars

After federal officials in May discovered a $1 million employee theft ring in the U.S. Department of Education, the U.S. House in June approved legislation for auditors from the General Accounting Office to study the Department’s accounts.

Some employees in the ring already have pleaded guilty to stealing equipment and filing false overtime reports. But before the U.S. Senate could review the GAO proposal, an alert auto salesman caused the exposure of an even bigger embezzlement scheme in July.

The latest scandal involves the fraudulent transfer of $1.9 million of Native American school funds to two bank accounts in Maryland, where the money then was diverted to other accounts and used to buy a $46,900 Cadillac Escalade, a $50,000 Lincoln Navigator, and a $135,000 Maryland house.

“Unfortunately, it is entirely believable that a scam of this magnitude could take place at the Department of Education, since the department’s financial records have been deemed unauditable for two years,” said Congressman Pete Hoekstra (R-Michigan), noting it may take the department several years to receive a clean audit. He said the agency was afflicted not only with criminal activity but with “general incompetence.”

Both Presidential candidates propose giving substantially more responsibility to the Department of Education despite its failure to maintain accurate financial records. Other problems have plagued the department, such as making improper Pell Grant payments, printing incorrect financial aid applications, and informing the wrong students of scholarship awards.
Congressman Pete Hoekstra’s Newsletter
September 19, 2000

Money for Poor Goes Mostly to Aides

A report issued by the U.S. Department of Education in August revealed that more federal dollars than ever are being spent on the nation’s poorest children . . . but more than half of the money designated for certified teachers goes to aides.

A congressional audit earlier this year showed that most states could not say how much improvement the annual $8 billion in Title I grants had brought to the low-income or non-native-English speaking children the grants were designed to help.
The Arizona Republic
August 12, 2000

Coaches Arrested for Creating Fake Classes

When teachers nudge up the grades of star athletes so they can maintain eligibility to compete, moralists wag their fingers and warn those teachers they are stepping onto a “slippery slope.”

Just how slippery that slope is was illustrated recently in south Florida after a 15-month investigation into the award of inflated grades to star athletes at several Miami-Dade high schools.

On September 7, five former and current Southwest High School coaches were charged with felony grand theft and official misconduct for taking the next logical step in grade puffery: awarding high grades to athletes for non-existent classes. The athletes netted higher grades without the burden of having to attend the classes, while the coaches netted more than $25,000 in overtime pay without the burden of having to teach the classes. But each coach now faces more than two dozen felony official misconduct charges and up to four felony grand theft and misdemeanor conspiracy charges.

“This is certainly not in accordance with school rules,” school district spokesperson Alberto Carvalho told the Miami Herald. “It constitutes conduct unbecoming of a teacher.”
Miami Herald
September 8, 2000

Misspending, Theft at Three Broward Schools

A 100 percent cost overrun, missing items worth hundreds of thousands of dollars, and a bookkeeper who gave herself cash advances. This trail of misspending and theft was recently uncovered in audits of three Broward County schools in south Florida.

At Coral Springs high, school officials paid almost $1 million for a running track renovation project budgeted to cost $500,000 at most, according to the auditing firm PricewaterhouseCoopers LLP. At Piper High School, an internal audit revealed that 193 items valued at $328,000 could not be located.

“This is a runaway train,” a source familiar with the situation told the Miami Herald. “This audit exemplifies what has been going on in the district. The question is, is anyone going to get fired?”
Miami Herald
September 27, 2000

Lax Controls Over Educators Cost State $336,000

Lax controls in the office of Idaho’s state school superintendent cost taxpayers more than $336,000 in unnecessary spending for the budget year ending June 1999, according to a new report from legislative auditors.

Among the problems cited was the fact that while supervisors were required to approve an employee’s request for travel, the employee’s actual expenses for the trip were not reviewed.

As a result, the employees paid more than necessary for airline tickets, charged personal side trips in rental cars to the state, and rented expensive full-size cars instead of more economical mid-size cars. In addition, rather than choosing the cheaper option of filling up the gas tanks of rental cars before returning them, employees frequently allowed the rental companies to refuel the cars.

“Airfares to Washington, D.C. and Spokane, Washington, were higher than necessary because the most economical airlines were not used; this resulted in as much as $22,000 in additional costs,” said the September 1 report.
Idaho Statesman
September 7, 2000

School Board Spending Abuses Detailed

Despite the revelation of spending abuses, a recent audit of expenses incurred by Prince George’s school officials failed to call for the removal of any board members or for a restructuring of the board.

Even after a subsequent hearing on the audit before the Maryland House Appropriations Committee in early October, state officials simply gave the school board more time to implement changes. And while school board Chairman James Henderson said board members would give up their credit cards, three board members oppose doing so.

The audit detailed overdrawn accounts and unsubstantiated expenses by board members but failed to call for repayment. However, Henderson promised board members would repay any overdrafts of their $9,800 expense accounts and also pay back any expenses deemed inappropriate.

Although state officials were curious about the school board’s high expenses, Washington Times reporter Jabeen Bhatti noted they did not ask why Prince George’s was one of few counties that even had school board expense accounts.

“It doesn’t take a rocket scientist to see something is wrong here,” observed Delegate Howard P. “Pete” Rawlings (D-Baltimore), expressing doubt the board would reform itself. But Sen. Ulysses Currie (D-St. George’s) protested, “This does not look as bad as it has been reported.”
The Washington Times
October 4, 2000

School Employees Probed for Wasting Taxes . . .

Employees of the Southern Regional School District in Massachusetts are under investigation after a recent audit revealed questionable spending practices in the district.

The audit found that employees charged lobster dinners, alcoholic beverages, and even a Christmas tree to the district’s credit card. During a “busing” conference in Key West, Florida in the winter of 1998, five school employees spent almost $3,000 each on food, hotel rooms, and other lavish expenses.

“The findings are really shocking,” Southeast Regional Superintendent James Hager told the Boston Herald. “They outline a litany of issues that are bad business practice.”
Boston Herald
September 29, 2000

. . . While Lawmakers Reject Audit of State Spending

Massachusetts taxpayers cough up almost $4 billion a year for spending on state education aid, but the state’s Educational Management Accountability Board won’t be taking a close look at how cities and towns across the state spend that money this year, thanks to inaction by the state legislature.

For three years, the board has pushed the state’s local government units to improve their schools by auditing the use and performance of state education aid. The Board not only examined financial accountability, but also looked at how the schools planned to use the money and how performance tracked against the plans.

“It sounds boring,” noted the editors of the Boston Herald, who also pointed out that “too many cities and towns are just taking the money in and shoveling it out again for additional teachers.”

For good management and for maintaining public confidence, the auditors must be kept separate from the people doing the work and the people making the rules. That’s why “big corporations must hire independent auditors,” noted the editors.

That’s what Governor Paul Celluci proposed earlier this year, breaking the Accountability Board away from the Department of Education and giving it expanded authority to report on classroom practice and preparation and use of curricula. But the legislature disagreed, provided no funding for the existing board, and gave the audit job to the Department of Education. After the Governor vetoed that proposal, the legislature went home without funding the existing board.
Boston Herald
August 9, 2000

Schools Ripe for Rip-Off, Commission Warns

Just as the New Jersey legislature and Governor Christine Whitman approved a school-construction program that could cost state and local taxpayers as much as $12 billion, a recent report from a state investigative panel indicates the state doesn’t have adequate safeguards in place to prevent unscrupulous contractors from bilking taxpayers.

In reviewing roofing contracts in a sample of 39 school districts, the State Commission of Investigation uncovered rip-offs by contractors in 23 districts totaling between $6 million and $10 million.

While the state’s Economic Development Authority oversees work done in roughly 75 of New Jersey’s poorest school districts, the remaining 500 or so have no such overseer and are free to solicit and evaluate construction bids on their own.

One common abuse found by the Commission was for a consultant to design the specifications for a roofing project with high-cost materials available from only one contractor. As sole supplier, the roofer could submit a highly inflated bid, get the job, and pay off the consultant.

“It’s easy for unscrupulous operators to come in and pull the wool over the eyes of local officials and basically rip them off,” Commission spokesperson Lee Seglem told the Philadelphia Inquirer.
Philadelphia Inquirer
September 20, 2000

IRS Probes Possible Corruption in Suburban School District

Ten Internal Revenue Service agents in October descended on the school board offices in the affluent suburban community of Wyckoff, New Jersey, to seize seven years of financial records for an investigation into possible money laundering, corruption, and budget irregularities. The agents also took school board resolutions, meeting agendas, and other materials dating back to 1993.

Benjamin Fox, superintendent of the 2,200-student district in western Bergen County, told The New York Times he didn’t know the reason for the investigation, only that the search warrant contained the name of the school system’s business manager and chief financial officer, Richard Davis. A few hours after the raid, the school board held an emergency meeting and voted to suspend Davis, who also is secretary to the school board.
The New York Times
October 4, 2000

Is Spending $9 Million Effective? Who Knows?

New York’s State Board of Education spends $9 million on programs provided by outside consultants to help students in low-performing schools, but a recent state audit showed some of the programs were not effective and students at schools without the programs performed better. Since the consultants are allowed to analyze their own performance, no one can say for sure if the programs actually work, said State Comptroller H. Carl McCall.

“These are programs that are supposed to help students,” McCall told the New York Post. “If they’re not working, we have to find better ways to make sure school kids get all the help they need to succeed.”
New York Post
September 6, 2000

Football Player’s Grades Were Changed

When an English teacher from Hillside High School in Durham, North Carolina, called Sheila Brandon-Williamson to say her football player son hadn’t completed all his work during the school year, Brandon-Williamson became concerned: The principal and other teachers had repeatedly told her Michael was doing fine.

After investigating further, Brandon-Williamson concluded that his failing grades had been changed last year to keep him eligible for the school’s football team.

In fact, examination of her son’s report card for the last year found three grade changes. A failing grade in Spanish last fall became a 70; and failing grades in Spanish and English in the spring became 70s. Her son’s transcript shows the passing grades rather than the failing grades.

“My 16-year-old son is the victim of practices that serve no useful end,” said Brandon-Williamson, calling on the Durham school board to investigate. She warned other parents about “grade-tampering, grade-changing, grade-fixing, and an institutional conspiracy to cover up wilful and malicious acts of unethical and immoral conduct.”
The News and Observer
September 29, 2000

$4.7 Million for Golfing Buddy, Not Teachers

The property value for El Paso’s Socorro School District is less than half the state average, and so it takes considerable effort for the district to raise a sum like $4.7 million for its schools, according to district superintendent Don P. Schulte.

In fact, $4.7 million could have hired 117 teachers for a year. But a former risk manager for the district, Mekeli T. Ieremia, spent $4.7 million of the district’s money on something quite different: to pay a golfing buddy for worthless background checks, at $3,500 apiece, on the worker’s compensation history of district employees.

The reports were unnecessary because the district already had the criminal history–if any–for each employee. Moreover, using worker’s compensation history in employment decisions is illegal.

In August, Ieremia was sentenced to 10 years in prison for theft over $200,000 and misapplication of fiduciary property. Ieremia’s golfing buddy, Michael Rhinehardt, faces the same charges.
El Paso Times
August 6, 2000

Not Grand Theft, But it’s Still School Money

A former Dallas Independent School District employee won’t merely have to pay back the $25,000 he stole from the district with fraudulent payroll vouchers: He’ll also have to serve prison time.

James Dayton Burch, 41, was sentenced to eight years in prison in September for the second-degree felony of theft by a public servant. Former payroll clerk Lisa Annette Johnson, who assisted Burch in the scheme, faces a charge of taking another $26,000 of school district money for herself.

“Granted, he didn’t steal on a grand scale as some people have done, but you’re going to start somewhere if you’re going to clean up the reputation of the district,” prosecutor Eric Mountin told The Dallas Morning News.
The Dallas Morning News
September 9, 2000