Letter Audit Report On The Department Of Education’s Controls Over The Background Investigations Of Contracted Vendors’ Employees And Consultants

Executive Summary

This audit’s objective was to determine whether the Department of Education (DOE) had adequate controls over the background investigations of contracted vendor employees and consultants (collectively referred to as vendor employees).  However, restrictions on the level of access we were granted to review documentation maintained in the background investigation files due to federal regulations limited the audit objective.

DOE provides primary and secondary education to over one million students, from pre-kindergarten through grade 12, in 32 school districts with more than 1,800 schools.  DOE is responsible for preparing students to meet grade-level standards in reading, writing, and math, and preparing high school students to graduate so that they are ready for college and careers.  In conjunction with this responsibility, DOE has contracts with vendors to purchase the goods and services necessary to ensure that students receive the quality education they deserve.

According to Chancellor’s Regulation C-105, no one may be licensed, certified, employed by or work in the City Public School System without a background investigation and clearance from either DOE’s Office of Personnel Investigation (OPI), which is a unit within the Office of Employee Relations (OER), or the Chief Executive of DOE’s Division of Human Resources.  DOE uses its Personnel Eligibility Tracking System (PETS), a web-based application, to assist in its background clearance process.  This system allows vendors to record their employees in order to initiate DOE’s background clearance process, and it is used by DOE to track whether vendors’ employees are eligible to work for DOE.

For a background clearance check, each vendor employee must go through three steps: (1) completion of a background questionnaire; (2) a fingerprint-supported criminal history clearance processed by the New York State Division of Criminal Justice Services; and (3) a review of DOE employment history, if any.  Unless adverse information is identified during any of these steps, the vendor-employee eligibility status field within PETS will automatically indicate that the individual is “eligible” to work for DOE.  DOE officials informed us that key steps taken during the investigation process will be recorded in the applicant’s New York City Automated Personnel System (NYCAPS) record.  For those applicants deemed eligible to provide services to DOE, OER’s Executive Director or Deputy Director will change their eligibility status to “eligible” in NYCAPS, which is also reflected in PETS.

Audit Findings and Conclusions

The audit found that DOE does not have written procedures in place that outline the entire background investigation process, and has provided no written guidance to the OPI personnel specifying the procedures they are supposed to follow in opening, conducting and closing an investigation.  In absence of written procedures and established criteria, the ability of DOE management or an independent reviewer to determine whether DOE investigators took all appropriate steps during the investigation process and to hold them accountable for steps not performed is greatly diminished.  In addition, the audit found that DOE did not perform or obtain periodic independent reviews of its investigators’ and managers’ administrative decisions to ensure that the handling and disposition of these cases conform with DOE’s regulations.  During the audit, subsequent to the discussions with DOE about these concerns, DOE officials informed us that they introduced new forms that will be used to document the initial review of adverse criminal background information and the reason for a case being closed early in the process.

The audit also identified a payment authorized for services provided to a student by a vendor who had not been cleared at the time of the service delivery.  According to DOE, when a provider is not cleared at the time they provide services, a PETS payment exception may be granted, in a case-by-case basis.  DOE stated that it approved the above-cited payment because the provider was hired by the student’s caregiver and was unaware that clearance must be obtained prior to rendering service.  Nonetheless, this incident demonstrates that DOE incurs an increased risk that persons with disqualifying events in their backgrounds may be providing services to students before DOE considers a request for payment for their services.

Audit Recommendations

The audit made six recommendations, including that DOE should:
· Establish written policies and procedures that outline the required reviews and investigation steps;

· Document and maintain on file the reasons for actions taken in a case, including its discretionary decisions and the basis of those decisions;

· Institute a periodic independent review of the investigation process to evaluate whether all decisions, documents and steps taken during the initial review and investigation were appropriate; and

· Review its applications and letters to students’ parents/guardians to ensure that they regularly remind vendors about the clearance requirement in an effort to minimize individuals gaining access to DOE students before obtaining clearance from DOE.

Agency Response

In its response, DOE generally agreed with five of the audit’s six recommendations.  DOE disagreed with the recommendation pertaining to it informing students’ parents/guardians of DOE’s clearance process and that the selection of a service provider other than those offered by DOE may result in the parents/guardians being responsible for the cost of services provided to their children if that selected provider fails to obtain authorization before beginning services.