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CPS inspector report highlights stolen funds and deceptive employees

This article was originally published on January 5, 2015.

Nearly $900,000 stolen from two Chicago high schools.

Lying CPS employees who skirted the system to get their own kids into the best schools.

School administrators who misclassified dropouts to make their schools look better.

And a CPS administrator who “engaged in questionable conduct” when a nearly $100 million contract was in the process of being awarded.

Those are among the damning findings in report being released Monday by the Chicago Board of Education’s Inspector General Nicholas Schuler.

The annual report says that malfeasance was rampant in some CPS schools.

“Chicago Public Schools is committed to working with the Office of the Inspector General to eliminate corruption, fraud and waste across the district,” CPS spokesman Bill McCaffrey said in a statement. “The annual OIG report is a testament of our cooperation and demonstrates we do not tolerate any wrongdoing, and CPS has either addressed or is addressing all the issues in the report.”

At two high schools, the alleged misdeeds could result in criminal charges.

The Cook County state’s attorney’s office is working with Schuler to investigate the theft of $876,427 from the two schools, which are unnamed in the report. Sources identified the schools as Gage Park and Michele Clark high schools.

An unnamed school operations employee allegedly “orchestrated multiple fraudulent purchasing and reimbursement schemes” between 2009 and 2014, the report said. The scheme involved CPS staffers and vendors, according to the inspector general’s report.

In one of the scams, $581,947 was paid to two business owners for goods and services “that were never actually provided” to the two high schools, the report alleges.

Those two business owners were possibly kicking back cash to the CPS employee, the report said. The employee “made over $122,000 in cash deposits — usually in round amounts — during this scheme,” the report said.

In another scheme, a businessman allegedly kicked back more than $111,000 to the unnamed employee “in connection with $216,000 worth of purchases” from the high schools.

The employee resigned while under investigation. Five other employees who helped with the scam were fired or resigned.

The principal of Michele Clark Academic Prep “facilitated” the scheme by giving the conniving employee her computer password, the report states.

But Beulah McLoyd was let off with a “warning resolution” and allowed to keep her job, it adds. McLoyd could not be reached.

The scam came to light after an audit, officials said.

Employees have undergone additional training and CPS is evaluating its processes “to increase safeguards and adopt best practices to prevent these occurrences,” McCaffrey said.

In a separate case, the inspector general found at least 13 students were enrolled in selective enrollment high schools because their parents — some of them CPS employees — lied about their addresses.

By pretending they lived in poorer neighborhoods than they did, the parents ensured their kids jumped in front of more deserving students for the coveted spots, the report states.

In one case, an elementary school teacher got her daughter into an unnamed, top high school by lying about where the student lived.

“The teacher’s fraudulent act denied a legitimate [lower-economic tier] student of an extremely competitive and valuable seat in one of Illinois’ top-rated public schools,” according to the report.

CPS has filed to fire the unnamed teacher, the report said. The student, though, was allowed to graduate in 2014.

Applications for 12 other students in six top selective-enrollment high schools also included phony addresses in poor neighborhoods, the report said. Six CPS employees were responsible. Nine kids left their schools after the scam was exposed. But three kids were able to stay, the report said.

Three CPS employees were either fired or are in the process of being fired and another quit. Two accused employees kept their jobs.

“CPS is determining the best options to prevent any false misrepresentation on school applications in the future, and this may include future audits of students in selective enrollment schools,” McCaffrey said.

And at two neighborhood high schools, administrators allegedly fiddled with the stats to make it seem like students who dropped out simply transferred.

At one school, nearly 300 dropouts were wiped off the books since 2009, the inspector general wrote.

At another high school officials did the same thing for 18 students.

But no one has yet been disciplined at either school.

And a CPS administrator, previously identified as Leslie Fowler, CPS’ executive director of nutrition support services, was investigated for improper involvement in a $97 million contract awarded in 2013 to her former employer, Aramark.

The inspector general determined Fowler engaged in “questionable conduct” throughout the award process. For instance, she twice dined with the president of Aramark during the contract award process. But Schuler found that Aramark didn’t pay for her meals and he couldn’t determine that the contract was discussed at the dinner table.

But the “evidence was not strong enough to support a conclusion that she was favoring or attempting to favor her former employer” and no disciplinary action was recommended.

CPS, however, has an ongoing “high-level review” of the case.

Fowler could not be reached and a CPS spokesman said he could not discuss personnel matters.