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.

money talks

As battle over education funding divides Democrats, New York City mayor adds $125M to city’s schools

PHOTO: Benjamin Kanter/Mayoral Photo Office
New York City Mayor Bill de Blasio earlier this year.

New York City schools are about to get a $125 million boost, Mayor Bill de Blasio announced on Wednesday.

The new money means that all city schools will soon receive at least 90 percent of the money they are supposed to get under the city’s funding formula. The change will allow 854 schools to spend more on things like literacy specialists, tutoring, supplies, and technology, de Blasio said.

Despite the extra cash, many schools will still not reach the level the city considers fully funded. Principals have said in the past that until the city reaches its goal, the neediest schools will struggle to afford crucial services, such as additional academic programs or after-school classes.

“We are fighting against a problem that, bluntly, has been here for decades, even generations,” de Blasio said, flanked by City Council leaders and advocates at City Hall. “But in this generation, we’re going to fix the problem.”

De Blasio’s announcement — the first to include new Chancellor Richard Carranza — reflects the mayor’s vow to pour more resources into education. It also injects the mayor into one of the most divisive issues in New York’s Democratic gubernatorial primary: whether the state is adequately funding schools. De Blasio’s ally, Cynthia Nixon, is pushing for more money, while his adversary, Gov. Andrew Cuomo, argues that the state is helping schools enough.

The city adopted its funding formula, or “Fair Student Funding,” in 2007 as a way to send more money to high-needs schools. Instead of divvying up money based on teacher salaries, the new formula gave schools extra money based on their students’ needs: Students who are poor, struggling academically, have a disability, or just learning English bring their schools additional dollars. The formula also provides extra money to some selective schools in the city on the grounds that their students might require additional resources as well.

But the funding formula has run into a crucial problem: City officials never allocated the total amount of money that they planned to a decade ago. The city blames the state for failing to fully fund schools according to the terms of the Campaign for Fiscal Equity lawsuit that was settled in 2006. Advocates — including Nixon — have sustained attention to the settlement’s requirements for more than a decade.

At a press conference, de Blasio repeatedly blasted state officials for not fully funding schools under the Campaign for Fiscal Equity, and took a swipe at Gov. Andrew Cuomo’s suggestion that school budgeting needs more transparency as opposed to more money.

“The city puts more and more in education and the state puts less and less in,” de Blasio said. “Of course you need more money to educate better.”

Advocates for additional school funding quickly heralded the city’s news — and criticized Cuomo.

“Unlike Governor Cuomo who has consistently blocked Campaign for Fiscal Equity funding, the mayor understands that money matters when it comes to addressing inequity in schools,” said Zakiyah Ansari, advocacy director of the Alliance for Quality Education, which formed to advance the Campaign for Fiscal Equity. Nixon is a longtime spokesperson for the group.

Carranza said he plans to continue lobbying Cuomo to increase funding for city schools. “While New York City is not waiting, we cannot do it alone,” he said. “And I look forward to being in Albany next week where I will meet with our state elected officials and I will make that case directly.”

Though schools still lag behind their funding goal, de Blasio has added more money to the system since taking office. At the beginning of his term, schools could see as little as 81 percent of what the funding formula said they should receive. That number has risen to 87 percent since 2014 and will now jump to 90 percent.

School funding in the city has remained uneven. For instance, New Design High School, which serves many needy students, got only 92 percent of what the funding formula said it should receive last year. The High School for Dual Language and Asian Studies, which enrolls a less needy population, got 112 percent of what the funding formula prescribed.

Asked about whether the city would reduce these types of inequities, de Blasio said the city did not plan to reduce school funding to promote equity.

“We have not said let’s take schools that are doing a good job and take resources away from them,” de Blasio said. “We’re in striking range — just a few years away from achieving full equity where every school is at 100 percent.”

Some schools have found other ways to supplement their funding levels. Parents in wealthier neighborhoods often raise funds to help their schools. Also, de Blasio has already committed to fully funding some of the city’s struggling schools, those in his flagship “Renewal” program. But for the rest of the city’s schools, the extra money could be crucial.

Christina Veiga contributed to this report

strike that

This Colorado bill would ban teacher strikes and hit violators with fines and jail time

Colorado teachers march around the state Capitol Monday, April 16, to call for more school funding and to protect their retirement benefits. (Erica Meltzer/Chalkbeat)

Two Republican lawmakers who have long helped shape education policy in Colorado have introduced a bill that would bar teachers from striking and strip unions that endorse strikes of their bargaining power.

This bill stands practically no chance of becoming law. House Democrats already killed a bill this legislative session that would have prohibited any union activity by public employees during work hours, and this measure goes much further in limiting the rights of workers.

However, that it was introduced at all speaks to growing concern that the wave of teacher activism that has hit other states could come to Colorado. Last Monday, several hundred teachers marched at the state Capitol for more school funding and to defend their retirement benefits. Hundreds, perhaps thousands more, are expected for more marches this Thursday and Friday.

Earlier this year, the Denver Classroom Teachers Association threatened to strike before backing off and continuing negotiations over that district’s pay-for-performance system. And Pueblo teachers voted to strike this month after the school board there voted down pay raises.

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According to numerous reports, Colorado consistently ranks in the bottom tier of U.S. states for both education funding and teacher salaries, though there is considerable variation around the state.

The reaction at the Capitol to teacher activism has fallen largely on party lines, with House Democrats joining teachers in calling for more school funding, and Republicans expressing frustration because this year’s budget already includes an increase for K-12 education. Republicans want to secure more funding for transportation projects, and lawmakers are also arguing over the final form of a proposed overhaul to the public employees retirement system.

The bill sponsored by state Sen. Bob Gardner of Colorado Springs and state Rep. Paul Lundeen of Monument would prohibit teachers and teachers unions from “directly or indirectly inducing, instigating, encouraging, authorizing, ratifying, or participating” in a strike. It also would prohibit public school employers from “consenting to or condoning” a teacher strike.

The bill authorizes public school employers to go to court and get an injunction against a teacher strike.

Teachers who violate such an injunction could be fined up to $500 a day and be jailed for up to six months. They would also face immediate termination with no right to a hearing.

Local teachers unions found in contempt could face fines of up to $10,000 a day. More significantly, they would see their collective bargaining agreements rendered null and void and would be barred from representing teachers for a year or collecting dues during that time. School districts would be barred from negotiating with sanctioned unions as well.

Courts would have the ability to reduce these penalties if employers request it or if they feel it is in the public interest to do so.

Teacher strikes are rare in Colorado and already face certain restrictions. For example, the Pueblo union has informed state regulators of their intent to strike, and the state Department of Labor and Employment can intervene to try to broker an agreement. Those discussions can go on for as long as 180 days before teachers can walk off the job.

The last time Denver teachers went on strike was 1994. A state judge refused to order teachers back to work because they had gone through the required process with state regulators. Teachers had the right, he ruled, to reject the proposed contract. That strike lasted a week before teachers returned to work with a new contract.