Lies, lapses cost CPS $2M in pre-K tuition from parents—including CPS workers: watchdog

Nearly 80 Chicago Public Schools employees were able to send their children to district preschool programs for free or very low costs by understating their income — to their own employer.

More than 60 CPS employees, including two school principals, ignored or failed to pay pre-K bills for their children, but were never required to pay and were not punished.

A Chicago police commander with a six-figure salary never paid $8,900 in bills for two years’ worth of pre-K classes for two children, and also faced no consequences.

And an often rogue tuition-collection vendor charged other parents higher fees than allowed while operating without a written contract with the district for nearly a decade.

Those were among the findings in a scathing report released Wednesday by the city’s public schools watchdog, which detailed a wide range of pre-K billing abuses and oversights that led to a loss of $2 million for the city’s public school system over the past four years.

“The biggest issue goes to fairness,” CPS Board of Education Inspector General Nicholas Schuler told the Sun-Times. “This is the classic Chicago issue — are government employees being treated differently than other people?”

Though a shocking number of CPS employees — 138 — cheated their own employer out of nearly $215,000, according to Schuler’s office, the problem was much more widespread.

The inspector general’s report detailed abuses of two pre-K programs — one that charged $14,400 in yearly tuition for a full-day seat, and another with a need-based payment system for half-day seats.

The second option, called a “sliding-scale” program, allowed parents to qualify for lower pre-K costs based on the size of their families and their incomes. A copayment could be reduced to anywhere between $260 to $4,400. In the past year, CPS has begun to phase out this program in favor of free, full-day universal pre-K.

In one of the schemes described by the inspector general, lower costs were charged to the parents of 379 students in the sliding-scale program even though neither their family sizes nor incomes would have qualified them for a lower cost. Those mistakes, which the inspector general did not say were necessarily intentional, cost CPS $756,528.

Separately, $810,373 worth of bills from the two programs combined was simply never collected from 705 parents, including 64 CPS employees, the report said. Not a single student, including those who came from families with incomes in the six figures, was ever removed from the sliding-scale program even if parents failed to pay.

Another $114,387 was lost because 78 CPS employees understated their income on applications for a sliding-scale seat. Of those 78 CPS employees, 51 sent their children to pre-K for free, including some for two years in a row.

Though CPS keeps records of how much money its own employees earned in salary — as any employer does — the report said a lack of any oversight whatsoever allowed employees’ misstatements about their income to go undetected.

Meanwhile, the CPD commander — who was not named in the report — was among dozens of parents whose combined 63 kids were allowed to attend a second year of pre-K after not paying for the first year. Those parents racked up $138,000 in unpaid debt for the two years combined.

Police spokesman Anthony Guglielmi said the department was not aware of the inspector general report but would ask for more information and follow department protocol if any disciplinary was necessary.

Among the other notable cases: Another CPD officer owed CPS nearly $7,600 in pre-K bills; a CPS clerk owed more than $8,100 for her child’s two years of pre-K in the school where she worked; a family owed almost $15,500 for two years worth of pre-K for two children.

Schuler said the lying, mismanagement and general lack of awareness of the problem was “clearly not right.”

“CPS has to do a better job making sure the systems they have in place are holding people accountable and are being audited,” Schuler said. “This clearly wasn’t getting enough attention — it wasn’t getting any attention.”

In addition to the billing issues, the report detailed problems with a for-profit tuition-collection vendor, which often charged other parents higher fees than allowed.

CPS originally hired the vendor — which was not named in the report but was identified by CPS as New Jersey-based Smart Tuition — in 2007 after an official in the CPS Office of Early Childhood Education indicated schools were “poor bill collectors.”

For its first eight years, the vendor operated with no written contract, an oversight the inspector general called a “dangerous business practice.”

That was likely due to a “blind spot,” Schuler said, because CPS’ agreement with the vendor didn’t require the school system to pay for the service. Instead, the vendor would make its money by withholding a portion of tuition payments as “processing fees” and by charging parents late-payment fees.

Smart Tuition officials could not be reached for comment.

“The report’s significance is in the aggregate,” Schuler said. “I don’t think there’s one part that’s particularly egregious on its own. It’s a sum of the parts. This wasn’t really high on anybody’s radar at all.”

CPS officials said they created a plan to recover from the issues laid out by the inspector general, including fixing their debt policy, seeking back-pay from the CPS employees, making the online pre-K application more vigorous and seeking collection actions against non-employee debtors.

They also want to add consequences for employees who lie about their income: the report noted that under Board of Education rules, CPS employees could be disciplined for not paying city parking tickets but face no penalties for not paying CPS pre-K bills.