98% of sampled payments lacked basic proof that services were provided

Lack of quality controls in $100 million in contracts expose the DOE to waste, fraud, and abuse

(New York, NY) — In an alarming new investigation of the New York City Department of Education, Comptroller Scott M. Stringer has found that 98 percent of the New York City Department of Education’s (DOE’s) sampled payments to the New York City Leadership Academy (NYCLA) for teacher and principal “coaching” wasn’t supported by required documentation.

NYCLA, which provides professional development to educators citywide, charges DOE by the hour. To ensure that bills reflect services that were actually provided, the organization should maintain contemporaneous time records to support its tens of millions of dollars in billing. Yet, in a sample of roughly $500,000 in payments made to NYCLA by the DOE, the agency paid out over $385,000 without required evidence of the times and hours when the services were rendered. The lack of that basic information about the services billed for puts the City at risk of waste, fraud, and abuse.

“When it comes to our kids and their educators, every penny counts. Every child deserves a great classroom, and their teachers and principals deserve great professional development. But it’s the DOE’s job to ensure that taxpayer dollars are spent efficiently – and that’s just not happening. If the DOE can’t be sure whether or when the professional coaching even happened, how do we know it was effective?” New York City Comptroller Scott M. Stringer said. “This investigation is about delivering basic accountability, about preventing waste, fraud, and abuse. That’s why we’ve called for City Council hearings — since this agency plays by a different set of rules than everyone else. We’re going to keep making noise, because this is about our kids, our teachers, and our principals. They deserve better.”

Between July 2008 and July 2014, the DOE entered into three contracts with the New York City Leadership Academy — a non-profit vendor that coaches teachers, assistant principals, and principals — to purchase training and professional development services. The three contracts were not to exceed a total of $101.4 million. One of the contracts — for up to $41 million — remains active today.

Auditors reviewed $559,667 in DOE’s spending on the NYCLA contracts from 2016, which included $394,007 for “leadership coaching” services and $165,660 for miscellaneous expenses. They found:

Payments Made Without Evidence Services Were Provided – Disregarding the safeguards in its own contracts and procurement rules, DOE spent $385,612 on leadership coaches — 98% of that type of spending — without obtaining records detailing the hours and dates the coaches worked.

Lack of Progress Reports and Contract Violations – The DOE did not request or receive any progress reports from the vendor, despite its contractual right to require them quarterly. Staff from the DOE did not meet with the New York City Leadership Academy monthly, even though the contract required monthly oversight meetings.

Taken together, these failings point to a broken procurement system that allows the DOE to spend freely, with inadequate oversight. The Comptroller’s Office has previously raised concerns about how the DOE contracts and spends differently from other agencies.

In today’s audit the Comptroller’s Office made a series of recommendations, including that the DOE:

  • Ensure that NYCLA maintains and submits contemporaneous time records — as required by the contract — to properly support payments;
  • Determine whether sufficient supporting documents exist for the $385,612 in spending that was flagged in this audit, and recoup any payments for services the DOE is not able to verify;
  • Require the New York City Leadership Academy to provide progress reports, as outlined in the contract; and
  • Hold oversight meetings with Leadership Academy monthly, as called for in the contract.

To read a copy of the audit, click here.

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