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Introducing a brand new perspective on why our public schools are failing and what to do about it, Lydia Segal reveals how systemic waste and corruption cripple education and offers a feasible prescription for how to tackle their root causes and reclaim our schools.
This eye-opening book exposes how embedded waste and fraud deplete classroom resources, block initiative, and distort educational priorities and explains how to remedy the problem. Drawing on extensive interviews and investigative research in America's three largest districts, New York City, Los Angeles, and Chicago, Segal argues that the problem is not usually bad people, but a bad system that focuses on process at the expense of results. She shows how regulations that were established to curb waste and fraud provide perverse incentives. Districts following rules designed to save every penny spend thousands of dollars to hunt down checks for amounts as small as $25. To fix leaky toilets, caring principals may have to pay workers under the table because submitting a work order through the central office, with its many fraud checks, could take years. Meanwhile, those who pilfer from classrooms may get away because the pyramidal structure of large districts makes schools inherently difficult to oversee.
Drawing on initiatives in successful districts, Segal offers pragmatic solutions and a detailed blueprint for reform. She calls for radically restructuring districts, empowering principals, and establishing new, less stifling forms of accountability that put a premium on performance.
As reformers grapple with the dismal state of education in America, this timely work offers a bold, far-reaching plan for improving public schools.
In this pathbreaking book, Segal shows that at least in the three largest K–12 systems in the U.S., the level of waste and fraud within schools is several orders of magnitude less than what is found in the central office. The author not only describes in detail the various types of corruption that have occurred, but also offers a solution that involves restructuring districts, empowering principals, and encouraging performance-based systems of accountability.
— F. Galloway
One of the most engrossing books of the year… [Segal] tells of nepotism, bribes, kickbacks, and sexual favors in school districts across the country… If greed, waste, and sheer slime of it all aren't enough to dismay you, Segal produces evidence that 'the most academically beleaguered districts tend to be the ones with the longest, most severe, and systemic criminal records.' Until now, school reformers have pretty much ignored the connection between corruption and low student achievement… Let's hope some honest reformers read this important book.
— Rebecca Jones
That's the radical argument put forward by Lydia G. Segal, an associate professor of law and public administration at John Jay College of Criminal Justice, in her book, "Battling Corruption in America's Public Schools."
Why would an academic in the criminal-justice field be writing about education? Not because the education that poor and minority children are consigned to in New York City is criminal, as some might be tempted to think. Rather, because many of those providing that education over the years have been real, honest-to-goodness, could-be-a-ripped-from-the-headlines/"Law and Order"-episode criminals.
Segal comes at the question of school management as a former special counsel. She was tasked for three years in the early 1990s with helping to ferret out crime and waste in the New York City public school system, particularly in the notoriously vile (and now defunct) local community school boards, where sex and money were often traded for jobs and teachers were constantly pressed into serving as campaign workers.
However, the school boards were hardly the beginning or the end of corruption in the public schools. In a tour through the nation's three largest school districts - New York City, Los Angeles and Chicago - Segal provides a number of disturbing vignettes.
There was the New York City custodian who "let his boiler-room operator store his gun collection near the lunchroom and live in the basement, where he slept, entertained women, and kept a dog."
There were the New York School Construction Authority project managers who rigged bids at public meetings by reading all of the bids aloud and then saving the pre-selected contractor's for last. When the last envelope was opened, they read "whatever price would make the favored contractors the lowest bidders."
And then there were the three custodians killed in New York in 1989 - investigators believe over stolen school supplies. Two were likely incinerated in the supply warehouse's boiler.
Outside of the sensational cases, however, Segal portrays a system wracked by corruption in every facet of its operations, from buying staplers to building schools. Some of these crimes are even committed by well-meaning employees simply trying to operate within a system that ties them up in red tape.
The solution, in Segal's view, is not more top-down control from the central office. It's far too easy for such controls to be subverted, she warns, and they create bureaucratic sloth which itself breeds corruption.
Instead, Segal argues that principals should be empowered and then held accountable, much as they are in the city's few charter schools. This would mean cutting away restrictive union work rules, giving principals wide-ranging authority over their schools' budgets and allowing them to hire and fire teachers at will. Principals could spend less time navigating the maze of the system's central administration and more time educating children.
Segal points to Edmonton, Canada, as a district that has followed her proposed model since the 1970s, reducing corruption and improving the education it provides. Houston has also set out down this road, and the early results are impressive.
New York is unlikely to embark on such a promising path - the United Federation of Teachers is here to make sure of that. But Chancellor Klein or anyone else interested in seeing the schools run more efficiently is bound to find some worthwhile ideas in Segal's short but scholarly volume.
—New York Post, February 22, 2004
Ms. Segal's research and information on the education establishment's 'dark' side outrages the reader, and incites us to demand change. Her book therefore, is much more than a book, it is a call to action. We cannot be bystanders any longer to the systemic abuse she so vividly describes, and we will never be able to listen in the same way ever again to school Principals, Superintendents, school custodians or district board members as they request more money "to help the children." The book's detailed reports on the corruption and crime in our public schools, supported by 52 pages of interview notes, references and specific examples, provide irrefutable evidence that the current failures of our nation's public schools are not due to the lack of money but the impossibility of getting the money to the children who need it and for whom the money is allocated in the first place.
Recent statistics show that students of all ages are not learning what they need to know, schools are overcome with violence, teachers are demoralized, and yet billions of dollars are literally shovelled into the system every year. The New York City school system receives $13.3 billion every year; Los Angeles, $7 billion; and Chicago, $3.6 billion. Where does this money go? We have all asked this question as we have walked through school hallways dodging the paint falling off the walls and ceilings, watching our children sitting on broken chairs, using bathrooms without running water or toilet paper, and struggling to achieve their personal best without the services and resources they are supposed to have.
Battling Corruption in America's Public Schools is the first book ever to systematically examine school waste and corruption and how to fight it. Ms. Segal, an undercover school investigator turned law professor, documents where the money goes, how waste and fraud embedded in the operation of large school bureaucracies siphon money from classrooms, distort educational priorities, block initiatives, and what we can do to bring badly-needed change. She describes in detail how only a small percentage of the money allocated to students in our public schools actually gets used by them due to corruption and waste, and how city school systems scoring lowest on standardized tests tend to have the biggest criminal records and most payroll padding. Coding problems, the procurement process, compartmentalization and opacity of information leave administrators with only two options: good corruption (which ultimately helps the kids) and bad corruption (which never helps anyone but the perpetrator and his/her allies and accomplices). Indeed, the system fights those who try the good corruption route.
Ms. Segal argues that the problem is not usually bad people, but a bad system that focuses on process at the expense of results. Decades of rules and regulations along with layers of top-down supervision make it so hard to do business with school systems that they encourage the very fraud and waste they were designed to curb. She tells us about how the "godfathers" and "godmothers" (the school board members) obtain jobs for their "pieces" in order to protect the systemic waste and fraud from being dismantled or exposed. Fortunately, she writes, there are good people involved in the corruption as well who must violate the rules in order to get their jobs done. Nonetheless, absurdities abound: school systems following rules to save every penny spend thousands of dollars hunting down checks as small as $25; it takes so long to pay vendors for their work that some have to bribe school officials to move their checks along; caring Principals who want to fix leaky toilets may have to pay workers under the table because submitting a work order through the central office could, and often does, take years. Meanwhile, those who pilfer from classrooms get away with it because the pyramidal structure of large districts makes schools inherently difficult to oversee.
What makes Battling Corruption in America's Public Schools a must-read is not only the fascinating - and depressing - details of the systemic wrong-doing but also Ms. Segal's suggestions for reform, based on the proven track records of school systems across North America that have successfully reduced waste and fraud and have pushed more resources into schools. The pathology of the corruption suggests the remedy, Ms. Segal says, which is decentralization of power into the schools and the hands of the Principals. Distilling what successful school systems have done, Segal advocates new forms of oversight that do not clog up school systems and recommends giving principals more discretion over their school budgets as well as holding them accountable for job performance. She argues for "autonomy in exchange for performance accountability" as part of a bold, far-reaching plan for reclaiming our schools. Her conclusion is logical and convincing.
Everyone who reads this book will find his or her perception of public school education changed forever. We cannot accept any longer that a generation of children has been abused by a system that is so full of greed and corruption without screaming "stop!" and "Your game is up!"
Reaching into the files of the Investigations Commission, Ms. Segal gives us a rogues' gallery of school employees. To take but one example, school custodians for many years put their wives on the payroll as virtual no-show "secretaries," and they used Jeeps purchased for incidental "snow removal" as their personal property year-round. Their union leaders, if confronted with such venal conduct, would merely shrug and say: "It's in the contract." And it often was.
One suspects that if the New York school system were a $12 billion private corporation rather than a public monopoly there would be more media and citizen outrage at such abuses. Indeed, politicians would be railing against the political party in power for failing to combat a "corporate crime wave." Unfortunately, public education has a halo of sanctity hovering over it. In the name of "the children," education officials perennially demand more taxpayer money to prop up an allegedly underfunded system. Rarely does anyone ask them to account for the bankrupting effects of fraud, pilfering and waste.
What is shocking in Ms. Segal's account is the sheer brazenness of the thievery. Those committing the misdeeds -- whether actual felonies or legal graft -- don't seem to think that they have to exert much energy covering up. With 1.1 million kids and more than 100,000 employees spread out over a vast city, it is assumed that no one will notice. Thus everything that is not nailed down is up for grabs.
Most people do not think of schools as corrupt or wasteful. In fact, scholars note that wrongdoing should be less likely in organizations that are devoted to helping society than in organizations that are not. However, the tale of public school corruption is one rich in ironies, unexpected juxtapositions, and disconnects between hope and reality. The lofty idealism that inspired early advocates of public education, for example, contrasts with the opportunism that motivated many to seek jobs in public schools. The optimistic utopianism of reformers to guarantee integrity and efficiency through central school bureaucracies belies the dishonesty and waste these structures actually generated. The ultimate irony is that today conscientious employees sometimes need to break the rules simply to do their jobs well.
Charity was the original impetus behind many urban school districts. In the early 1800s rich families donated huge sums of money to start free public schools to help immigrants and the poor. Advocates of public education during the 18oos trusted in the basic goodness of public schools with crusader like zeal and held an almost evangelical belief that these institutions would civilize and secure Christian values and democracy in America.
Yet by the late 1800s, public schools had become a trove of power, political patronage, and profit for a number of people with less-exalted motives. In those days large city school systems were often divided into local wards or regions, each run by an elected school board of trustees with broad power over school personnel and funds. Whenever trustees were voted out of office, large numbers of teachers, principals, and even school janitors could expect to be fired to make room for new staff loyal to the incoming trustees.
In some large eastern cities such as New York and Chicago, allegations of local board members selling jobs and promotions were common. In 1864, for instance, an entire ward school board in New York City was suspended together with some principals for colluding to extort payments from prospective teachers and contractors. Indeed, one of the more colorful figures of the day, William Marcy Tweed, later the famed "Boss Tweed" of Tammany Hall, launched his political career from a ward school board. By the time he rose to the mayoralty some years later, he was all too familiar with the reservoir of patronage and contracts that the school system offered. Longing to get his hands on them, he convinced the legislature to abolish the independent lay school board at the top, which New York, like most public school systems, used to separate schools from partisan politics, and to replace it with a Department of Public Instruction that answered to him.
In Chicago in the early 1920s, a former Board of Education chairman, vice chairman, board members, board attorney, and forty political cronies were indicted for school graft. Board officials would tip off their friends about land that the school board wanted to buy so that they could quickly buy it and resell it to the board at inflated prices. Some school officials would order unnecessary equipment from favored vendors and award lucrative contracts to shell companies. They would extort kickbacks from school engineers seeking promotions.
Other paradoxes emerged in public schools as the twentieth century unfolded. In the first half of the 1900s, progressive reformers embarked on a mission to stamp out waste and dishonesty from public schools with as much moral fervor as public school advocates had pursued in establishing public schools in the previous century. With avid confidence in the new "scientific management" theories of the day-that centralized bureaucracies and professional expertise would ensure better education and more integrity-progressive reformers set about redesigning schools to make them perfect. They pushed power up from the local school boards into central bureaucracies, professionalized staff, and established top-down accountability mechanisms designed to enforce compliance with rules and regulations.
But scandals continued to erupt in the 1900s. In some cities it seemed that the more inoculations against corruption a school district received, the more resistance it built up.
THE DIMENSIONS OF URBAN PUBLIC SCHOOLS
To begin to understand all this and grasp what is at stake, it is helpful to put the sheer magnitude and complexity of urban public schools in perspective. School corruption and waste are not about a missing box of staples. Even before they grew to today's massive proportions, public schools in America's great cities had long been a big business, with large sums of money at stake and considerable opportunities for power and patronage.
Urban schools in particular grew especially rapidly starting in the a 193os, when people began flooding into cities from the countryside and the little rural schoolhouses that peppered the nation. Today, 31 percent of U.S. students attend school districts with at least 25,000 pupils) America's 100 largest school districts each have at least 45,ooo students; 25 of these districts have over 100,000 students each.
The dimensions of America's three largest school districts-New York City, Los Angeles, and Chicago-are particularly staggering. As William Ouchi's and my forthcoming book, Making Schools Work, notes, New York City, the largest school system in the country, has over 1.1 million students, a budget of over $13 billion, over 1,200 schools, and 140,000 employees. Los Angeles is the second largest, with three-quarters of a million pupils, a $7-billion budget, 900 schools, and 80,000 employees. Chicago, the third largest, has half a million students, a $3.5-billion budget, 600 schools, and 45,000 employees.
The operating budgets of the New York City and Chicago school districts are each bigger than the entire amount most states spend on education. Their capital budgets are in the billions (see table 1). The size of the New York City school operating budget alone would rank seventh in the nation if it were a state. This system owns more square footage than any agency in the nation after the U.S. Department of Defense and the U.S. Post Office. It receives 45,000 work orders a year that range from requests to "build a new floor" to requests to "fix the toilet." With 74 percent of its students eligible for free or reduced lunches under federal law, it is the second-largest food provider in the country after the U.S. Army. It delivers over 850,000 meals a day during the school year and 300,000 a day in the summer at a cost of over $250 million a year.
Individual schools in urban districts also tend to be large today. Elementary and secondary schools in America's one hundred largest districts have an average of 708 students each. Eleven of these one hundred districts have schools with an average enrollment of 1,000 students.
Urban high schools, which came into existence as unique, colossal enterprises in the early a 1900s, now seat thousands of pupils and cost tens of millions of dollars to operate. The average public high school in Los Angeles enrolls 3,239 students; in Chicago, 1,370; in New York City, 1,683. As one veteran principal described it, running a high school today is "like running a medium sized corporation." His school, Edward R. Murrow High School in Brooklyn, part of the New York City system, has 3,600 pupils, 450 staff, and an $18.7-million operating budget. And that is still smaller than some other high schools, such as Brooklyn Technical High School, with 4,079 students and an operating budget of $20 million. These costs, moreover, do not include items such as electricity, gas, heat, employee pensions, and litigation costs that are paid by the city or the central school system.
THE VARIETY AND COMPLEXITY OF SCHOOL DISTRICT SERVICES
The sheer variety of tasks and categories of people involved in running a school district also gives perspective on the breadth of the terrain potentially affected by abuse. As society's expectations of schools and court mandates multiplied in the last century, schools became, as one former president of New York City's central school board noted, "a one-stop shop where parents drop kids off and ask the school to raise them."
Social workers, nurses, dentists, neighborhood workers, substance abuse prevention specialists, and truancy officers tend to students' mental, physical, and social health. Psychiatrists, physical therapists, and other specialists care for special education children. Bus drivers, bus "matrons," bus inspectors, and other specialists work on transportation. Procurement officers screen vendors, negotiate prices, draw up contracts, and oversee purchasing procedures. Lawyers with different specialties draw up, review, and negotiate collective bargaining agreements and defend schools in employee grievances and arbitration proceedings. Lunchroom workers, nutritionists, and food buyers purchase, evaluate, store, and deliver lunches and breakfasts to children below the federal poverty line. Education experts must constantly develop and administer tests to personnel such as lab technicians, lab specialists, and secretaries, whose jobs regularly require updated licenses. Experts in construction, architecture, engineering, leasing, hazardous waste removal, and real estate law tend to school buildings, many with complex heating and air conditioning systems, elevators, and swimming pools. Because of violence and vandalism, school systems must provide security and navigate often tricky relationships with city police.
The largest school districts may even need demographers to help them plan school construction. Building planners in the New York City school system, for example, hire demographers to help them anticipate how the city's ever-changing vibrant neighborhoods will respond to what is happening around the globe. A hurricane in Haiti usually translates into an enrollment surge in District 17; a political shakeup in Eastern Europe means more students in Districts 21 and 22. Why? Because today Haitian immigrants tend to flock to Brooklyn's District 17; Eastern Europeans, to Brooklyn's Districts 21 and 22. Similarly they need to know that Asian immigrants today tend to congregate in District 25 in Flushing, Queens, now known as the "new Chinatown," and Poles in District 14.
Last, as some of the most political local institutions, urban school districts, particularly in tensely multiethnic cities such as New York, Los Angeles, and Chicago, need public relations personnel and lobbyists. In New York City, at least before Mayor Michael Bloomberg took over in the summer of 2002, the top executive had a fleet of assistants and spokespeople to help manage his relationship with the central school board, the mayor, and other city and state politicians.
Schools also need staff to manage the fiercely competitive interests of local constituents. School leaders in overcrowded cities need assistance in handling demands by different groups for new schools and seats. Even a proposition as seemingly simple as moving pupils from overcrowded neighborhoods to areas with plenty of room can be fraught with political peril if not skillfully handled. In New York City, for example, executives would likely need assistance to manage the demands of districts like District 28 in Queens. The upscale end of that oblong district, Rego Park, is mostly white and 120 percent utilized. But the other end, Jamaica, is mostly poor and black and 30 percent empty. As chancellors have found, busing children from rego park to Jamaica or vice versa, no matter how logical, is simply not politically feasible.
THE FINANCIAL VALUE OF PUBLIC SCHOOL CONTRACTS AND JOBS
With all their responsibilities and requirements, large school districts offer many opportunities for lucre and power. Consider the size of contracts at stake. The Los Angeles Unified School District (LAUSD) pays about $80 million a year to just six bus companies to transport pupils. In the late 1990s it poured $160 million into a single high school, the Belmont Learning Center-and that was just to complete part of it. The New York City school system spends $2 billion a year on supplies, over $60 million on textbooks, $40 million on leases, $300 million on private preschool vendors, and, in 2000, $18 million to train parent-led school leadership teams. A contract to remove asbestos at a single school easily goes for half a million dollars. News articles suggest that one New York construction contractor raked in nearly $ 1 billion in school construction contracts from 1959 through the early 1990s. The Facilities Division pays one architectural firm $4 million to survey and rate the condition of every school building it owns once a year simply to enable it to prioritize renovation projects.
With so much money flowing through the schools, the amount they can potentially lose to fraud or questionable billing is significant. In New York City, the FBI charged that the construction company had submitted $4.5 million in inflated school construction bills over five years. In the LAUSD, investigators charged that a single vendor hired to provide special education services had billed nearly $1.5 million in questionable costs. In Chicago, a single private provider of off-site special education instruction allegedly received $115,000 by falsifying attendance records.
Cost overruns due to racketeering and mismanagement can also be enormous. Change orders to build a single school, Fiorello H. La Guardia High School near Lincoln Center in Manhattan, which prosecutors found to be ensnared in a web of corruption and mismanagement, came to over $50 million.
Simple, honest mistakes can be dear, as well, particularly if a district is mismanaged. In what was apparently an oversight, for instance, the LAUSD paid one company $14.3 million for a three-year telephone contract for nothing. Officials paid the money without having a contract in place. In the Chicago public schools before Chief Executive Officer Paul Vallas and his team started cleaning up that system in 1996-97, auditors found that the Bureau of Payroll Services had mistakenly overpaid employees $348,000 in 1991 alone. The Benefits Program, meanwhile, was allegedly paying 3,000 ineligible dependents, some of whom had been dead for years.
Although the vast majority of people who work in and with schools are dedicated and honest, those who are unscrupulous stand to rake in thousands of dollars. Some undercover operations have shown vendors kicking back between 10 to 15 percent on procurement, construction, and repair contracts in New York City. On a $750,000 contract, that comes to $75,000 to $112,500.
Excerpted from BATTLING CORRUPTION IN AMERICA'S PUBLIC SCHOOLS by Lydia G. Segal Copyright © 2004 by Lydia G. Segal. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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|List of Tables and Diagrams|
|Introduction: Corruption and the Future of America's Great City Schools|
|Pt. I||The Pathology: Laying the Record Bare|
|1||Public Education as Big Business||3|
|2||Charting Corruption, Waste, and Abuse||13|
|3||Where the Money Goes||24|
|4||The Toll on Education||28|
|Pt. II||The Remedies Tried: The Frenzied Search for Accountability|
|5||The Quest for Accountability||41|
|6||The Centralization Mess||53|
|Pt. III||The Diagnosis: Getting to the Root Causes|
|7||Toward a Theory of School Waste and Fraud||63|
|8||Watching the Pennies but Missing the Millions||73|
|9||The Cost of Managerial Paralysis||87|
|10||Creative Noncompliance: Informal Power Networks||101|
|11||When Anticorruption Machinery Breeds Corruption||109|
|Pt. IV||The Wrong Medication: How Not to Fix the Problem|
|12||Lessons from Local Political School Control||119|
|13||Lessons from Bureaucratic Autonomy||133|
|14||Lessons from Resistance to Reform||140|
|Pt. V||The Prescription: How to Fix the Problem|
|15||Establishing Independent Inspectors General||155|
|16||Removing the Dominant Coalition||164|
|17||Restructuring School Districts to Push Power Downward||170|
|18||The Model of Edmonton, Canada||177|
|19||Loosened Top-Down Controls and Trust||187|
Posted February 26, 2004
Battling Corruption in America¿s Public Schools by Lydia Segal is a true eye opener and a call to action. As a mother of two from one of the richest counties in New Jersey, my property taxes are sky-high. I had always been told that the bulk of our taxes went to public school classrooms. If true, that would have been fine. But I always doubted that it was true. It just did not jibe with the inferior conditions in my children¿s public schools ¿ the lack of essential services, absence of well-trained personnel, substandard computers,etc. After years of frustration, I finally enrolled my children in private school, even though it is financially difficult. But I never stopped wondering what really happened to our school tax dollars. It was only after reading this excellent and insightful book by Lydia Segal that I began to understand where the money went and grasp the source and the magnitude of the problem. The book filled me with outrage and made me feel that we all need to act now to stop the appalling waste and abuse that Segal so vividly describes for the sake of all our children. Anyone who is a parent, a guardian of a schoolchild, or who cares about public education should read this book. It is the only way people will know what is really going on in their school system underneath all the spin. The book covers over five city school districts in depth, but I have no doubt that the truths it exposes apply to virtually every city school system in the United States. I was lucky because I managed to muster up the money to enroll my kids in private school. But I worry about all the children whose frustrated parents cannot afford this. After reading Lydia Segal¿s book, I would tell everyone ¿ your first step must be to read this book! We need to understand what is wrong in order to be able to fix it. This book is not only an eye opener for those who wonder about the source and nature of the problems in America¿s school systems, it¿s also an eye opener for those who seek real solutions. Segal outlines how a number of school districts across North America have reduced waste and fraud and made sure the money actually went to serve children. She shows exactly what these districts did, step by step. If they can do it, so can we! Segal¿s book is a true contribution to all concerned parents and a gift to our children ¿ for which we can truly thank her. I urge everyone who cares about children to read this powerful account and join forces in pushing for the implementation of Segal¿s astute and practical solutions.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.
Posted January 31, 2004
This book is a page-turner. It is chock-full of fascinating and shocking information and insights presented in a well-organized, entertaining way. The book made me feel indignant about how money is siphoned away from the classroom through waste and abuse. The author rightly says that the problem is 'not bad people' but a 'bad system' that invites abuse. This book is a cry for help to all of us -- parents, teachers, counselors, citizens, union workers, politicians -- to support the author's recommendations and fix the problems described. I think this is a must-read for anyone who cares about our children's education.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.