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THE ANNUAL CHICAGO PUBLIC

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SCHOOLS INSPECTOR GENERAL'S

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REPORT IS RELEASED.

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NEARLY A MILLION DOLLAR STOLEN

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FROM CPS, HUNDREDS OF DROPPOUTS

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FALSELY LISTED AS TRANSFERS AND

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ADMINISTRATION GETTING COZY WITH

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POTENTIAL VENDORS AND SCHOOL

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EMPLOYEES LYING ABOUT WHERE THEY

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LIVE TO HELP THEIR KIDS GET INTO

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A BETTER SCHOOL.

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CPS SAYS IN A STATEMENT THAT IT

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IS COMMIT TO THE ELIMINATING

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CORRUPTION, FRAUD, AND WASTE AND

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ALL THE ISSUES IN THE REPORT

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HAVE BEEN OR WILL BE ADDRESSED.

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JOINING US IS NICHOLAS SCHULER

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THE CHICAGO PUBLIC SCHOOLS

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INSPECTOR GENERAL.

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WELCOME BACK TO "CHICAGO

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TONIGHT."

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SOME OF THE KEY FINDINGS OF THE

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REPORT.

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IF YOU WANT TO AMPLIFY SOME OF

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THE THINGS.

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>> HAPPY TO.

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THE MANY FINDINGS BRECK DOWN TO

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TWO CATEGORIES, OPERATIONAL SIDE

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AND WHAT I CALL THE EDUCATIONAL

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SIDE.

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INVOLVE HIGH SCHOOLS.

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ON THE OPERATIONAL SIDE, THAT IS

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LARGE STEPS, ALMOST $900,000

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WORTH OF THEFT ORCHESTRATED BY A

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OPERATIONS EMPLOYEE AND IN TWO

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SCHOOLS OVER A PERIOD OF ABOUT

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FIVE YEARS.

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>> HOW IS IT DONE?

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>> YES.

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HE BASICALLY OPENED VENDORS AND

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MES ON THE VENDOR SIDE, HE

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OPENED BASICALLY FAKE PURCHASE

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ORDERS, AND GOODS AND SERVICES

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THAT WERE NEVER PERFORMED.

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AND YOU KNOW WE HAVE HUNDREDS OF

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THOUSANDS THERE, AND ON THE

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EMPLOYEE'S SIDE THE SMALLER

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SIDE, HE BASICALLY, THEY HAD

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FALSE REIMBURSEMENTS FOR THINGS

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THAT WERE NEVER PURCHASED.

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AND A HANDFUL OF OTHER

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EMPLOYEES.

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>> LET'S GET TO ANOTHER AREA

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THAT YOU ADDRESSED.

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MISCLASSIFYING DROPPOUTS.

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HOW DOES THAT WORK AND WHY IS IT

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IMPORTANT?

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>> SO, YOU KNOW, IT GOES TO THE

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SCHOOL'S DROPPOUT RATE.

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THAT IS WHY IT'S IMPORTANT.

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POEM ARE, ALL THESE CASES OF

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PEOPLE SAYING THEY WERE

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TRANSFERED FROM THE CPS SCHOOL

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SYSTEM TO PRIVATE SCHOOLS OR

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OUTSIDE OF CHICAGO ALTOGETHER.

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THEY ARE USINGED CODE AS THAT

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TRANSFER BUT IN THE MARGINS THEY

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WERE STATING THEY WERE

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TRANSFERED TO A GED PROGRAM OR

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PLANNED TO ENROLL IN A GED

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PROGRAM.

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REALLY THEY DROPPED OUT AND

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SHOULD BE CODED AS

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APPROPRIATELY.

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>> ALL TO MAKE THE SCHOOLS

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STATISTICS ON THE DROPPOUT RATE

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LOOK BETTER?

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>> THAT IS WHAT WE CONCLUDE.

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ALSO A COMPOUNDING ISSUE, THAT

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THE TRANSFERS WERE FALSELY

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VERIFIED.

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SO THEY WERE BASICALLY, SOMEONE

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IS GOING IN THE DATA BASE AND

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SAYING THEY HAVE BEEN VERIFIED,

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MEANING THEY RECEIVED

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DOCUMENTATION WHEN THERE WASN'T

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ANY IN THE FILES.

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A PROBLEM THAT AFFECTED A BIGGER

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BRUP THAN THESE GED TRANSFERS.

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AND TELL US ABOUT THE ISSUE,

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TALKING ABOUT LYING ABOUT

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RESIDENCY TO GET KIDDED-- KIDS

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IN SELECTIVE ENROLLMENT SCHOOLS.

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>> FAMILIES ARE SAYING SOMEONE

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LIVED IN A DIFFERENT

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SOCIOECONOMIC AREA THAN THEY DID

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TO GAIN FAVOR.

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THE ENTRY SYSTEM TAKES ACCOUNT

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DIFFERENT SOCIOECONOMIC TIERS

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AND BASED ON CENSUS TRACKS AND

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PEOPLE ARE SAYING THEY LIVE

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WHERE THEY DIDN'T TO GAIN AN

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ADVANTAGE.

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SEVERAL KIDS, SEVERAL STUDENTS

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WERE ALLOWED TO SCHOOLS BASED ON

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THAT BUMP UP FOR THE CENSUS

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TRACK THEY CLAIMED WHERE THEY

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LIVED WHEN THEY DIDN'T.

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THEY SAID THEY LIVED IN POOR ARE

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NEIGHBORHOODS THAN THEY LIVED IN

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BECAUSE THAT WAS FACTOR IN

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ADMISSIONS?

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>> WRE.

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WE LOOKED AT SOME, SOME FAMILIES

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AND SOME OF THE FAMILIES WERE

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THE PARENTS WASHINGED AT CPS,

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YES.

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>> WHEN YOU LOOK AT THE RANGE OF

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MISCONDUCT WHAT WAS MOST

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DISTURBING TO YOU?

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>> I THINK THE THINGS THAT GO TO

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THE EDUCATIONAL CORE.

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THE CASES INVOLVING FRAUD,

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PEOPLE INSIDE THE SYSTEM TAKING

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ADVANTAGE OF THE SYSTEM, THAT IS

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PARTICULARLYING A REGION I

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THINK.

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ANYONE THAT WE TRY TO GAIN THE

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METRICS OF THE DROPPOUT RATE,

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THOSE ARE PARTICULARLY TROUBLING

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BECAUSE IT GOES TO THE CORE OF

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WHAT THE CHICAGO PUBLIC SCHOOLS

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IS TRYING TO DO.

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EDUCATE KIDS.

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>> SOME OF THE NUMBERS, THEY ARE

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ALL VERY DISTURBING, BUT HOW IS

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IT THAT SOMEONE CAN GET AWAY

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WITH EMBEZZLING OR STEALING

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ALMOST A MILLION DOLLARS?

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AREN'T THERE CHECKS AND BALANCES

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AND REVIEW OF PACE WORK?

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>> YES.

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YOU KNOW, IN LARGE PART IT IS

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NOT THAT IT WASN'T A $100,000

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PURCHASE TIMES EIGHT, HUNDREDS

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OF SMALL TRANSACTIONS, A COUPLE

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OF THOUSAND, IN THE AGREE GATE

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FALLS BELOW THE RADAR AND

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QUESTIONS THAT REMAIN ABOUT YOU

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KNOW, WHETHER THE ADMINISTRATORS

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WERE PAYING PROSECUTE ATTENTION.

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>> CPS SAYS THE PROBLEMS HAVE

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BEEN ADDRESSED AND THE

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INDIVIDUALS WILL BE ADDRESSED,

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ARE YOU SATISFIED WITH THE STEP

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THAT WERE TAKEN TO DEAL WITH THE

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PEOPLE INVOLVED IN WRONGDOING?

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>> YOU KNOW BY AND LARGE YES,

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ESPECIALLY IN THE CASES OF

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THEFTS.

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PEOPLE HAVE BASICALLY RESIGNED

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OR BEEN TERMINATED AND ONGOING

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CRIMINAL INVESTIGATION.

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>> AS FAR AS CRIMINAL

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INVESTIGATIONS ARE CONCERNED,

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DIAGNOSIS THAT AUTOMATICALLY

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KICK IN, IF YOUR OFFICE FINDS

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THAT SOMEONE HAS STOLEN

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SOMETHING?

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>> YOU KNOW, I THINK CRIMINAL,

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THAT IS A GOOD QUESTION,

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SOMETHING TO BE CONSIDERED.

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AND CERTAIN CASES, YOU KNOW,

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PROSECUTORS WILL HAVE TO BRING

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IT TO THE PROSECUTOR'S DESK.

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>> IS THERE A PATTERN OF THIS

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CONDUCT IN CPS?

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>> A PATTERN OF THIS CONDUCT.

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>> OR ARE THEY ROGUE EMPLOYEES?

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OR IS THERE A PATTERN OF ROGUE

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MES?

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IT'S A BIG SYSTEM AND THIS WILL

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BE CASES AND I THINK THE

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PATTERN, AMONG INDIVIDUALS AND

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YOU KNOW THERE ARE CERTAIN

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REPEAT THINKINGS THAT WE HAVE

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SEEN A LOT.

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BRINGING CASES AND VENDORS

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HAVING FAKE ALTER EGOS AND GET

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MORE SPENDING LIMITS AND

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THINKINGS LIKE THAT.

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THERE ARE CERTAIN REPEAT THINGS

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THAT TO HAPPEN FROM

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YEAR-TO-YEAR.

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THEY DON'T INVOLVE THE SAME

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PEOPLE TYPICALLY.

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>> ASIDE FROM THE CONSEQUENCES

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TO THE INDIVIDUALS WHO MAY HAVE

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BEEN INVOLVED WHAT STEPS ARE

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BEING TAKEN TO PREVENT THIS FROM

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HAPPENING?

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ANY TWEAKS TO THE SYSTEM?

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>> THAT IS ALWAYS A BIG PART OF

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WHAT THEY DID ACROSS THE WORD

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BOARD, TRY AND FUNDS WHERE THE

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SOFT SPOTS ARE AND MAKE

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RECOMMENDATIONS.

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AS FAR AS THINGS LIKE STRINGING,

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WE ARE RECOMMENDING MORE

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TRAINING.

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>> STRINGING IS WHEN PEOPLE

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STRUCTURE PURCHASES THAT STAY

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BELOW A COMPETITIVE PURCHASE

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LIMIT.

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>> WE HAVE A GRAPHIC THAT SHOWS

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SOME OF THE TOP COMPLAINTS THAT

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YOUR OFFICE RECEIVED, AND LET'S

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LOOK AT THE NUMBER OF

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COMPLAINTS.

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ON DUTY CRIMINAL CONDUCT, 95.

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CONTRACTOR VIOLATIONS, 70.

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MISAPPROPRIATION OF FUNDSES 63,

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OFFDUTY CRIMINAL CONDUCT, 61.

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HOW MANY TIPS DOES YOUR OFFICE

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RECEIVE?

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>> WELL OVER A THOUSAND A YEAR.

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LAST YEAR WE RECEIVED 1335.

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HOW MANY DID YOU FOLLOW UP ON?

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>> I THINK AROUND 280.

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JUST OVER 20%.

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>> WHY IS THAT, IN TERMS

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RESOURCES HOW ARE YOU DOING?

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>> OUR OFFICE IS LEANLY STAFF.

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WE REPORTED THAT FOR YEARS.

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WE HAVE 17 PEOPLE.

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AND OF THOSE HOW MANY DO

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INVESTIGATIONS,?

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THIRTEEN.

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>> THERE IS NOT A LOT OF BLOAT

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THERE.

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>> WE ARE VERY LEANLY STAFFED

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OFFICE.

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ARE THERE TIPS THAT ARE VIABLE

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THAT YOU CANNOT GET TO?

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>> THAT IS MY SENSE FOR SURE.

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>> I WOULD ASK YOU ABOUT A

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COUPLE OF THINGS THAT ARE NOT

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INCLUDED IN YOUR REPORT BUT HAVE

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BEEN IN THE NEWS.

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THE "SUN-TIMES" INVESTIGATION

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FOUND THE COMPANIES IN WHICH

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SCHOOL BOARD MEMBER DEBORAH WAZ

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AN INVESTOR TRIPLED THAT

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BUSINESS WITH CPS SINCE HER

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APPOINTMENT BY THE MAYOR.

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AND THEY SHOWED CHUY WANTS HER

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FIRED.

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IS YOUR OFFICE INVESTIGATING

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THAT?

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>> I FOUND THE RECORD AND WE

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ARE.

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>> YOU ARE INVESTIGATING.

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THE SECOND QUESTION WHAT IS THE

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STATUS OF THAT INVESTIGATION?

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>> ONGOING.

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>> AND ANOTHER WITHIN HAS TO DO

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WITH THE CUSTODYIAL CONTRACT.

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MANY SCHOOLS ARE IN THE GETTING

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ADEQUATELY CLEANED UP BY MALL

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STAFFS AND THESE SAME WILL HAVE

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THE CUSTODIANS WILL CLEAN UP THE

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SNOW AS WELL.

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WAS THAT IN THE CONTRACT

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IMPROPERLY AWARDED?

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>> I'M NOT IN A POSITION TO

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COMMENT ON THAT.

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>> GETTING BACK TO THE REPORT,

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WHAT DID YOU WANT PEOPLE TO TAKE

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AWAY FROM IT?

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>> I THINK IN GENERAL, I THINK

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IN GENERAL, A GREAT DETERRENT

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VALUE AND I WANT PEOPLE TO KNOW

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THERE ARE RULES.

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WE EXPECT PEOPLE TO FOLLOW THEM

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AND THEY WILL BE HELD