THE ANNUAL CHICAGO PUBLIC

SCHOOLS INSPECTOR GENERAL'S

REPORT IS RELEASED.

NEARLY A MILLION DOLLAR STOLEN

FROM CPS, HUNDREDS OF DROPPOUTS

FALSELY LISTED AS TRANSFERS AND

ADMINISTRATION GETTING COZY WITH

POTENTIAL VENDORS AND SCHOOL

EMPLOYEES LYING ABOUT WHERE THEY

LIVE TO HELP THEIR KIDS GET INTO

A BETTER SCHOOL.

CPS SAYS IN A STATEMENT THAT IT

IS COMMIT TO THE ELIMINATING

CORRUPTION, FRAUD, AND WASTE AND

ALL THE ISSUES IN THE REPORT

HAVE BEEN OR WILL BE ADDRESSED.

JOINING US IS NICHOLAS SCHULER

THE CHICAGO PUBLIC SCHOOLS

INSPECTOR GENERAL.

WELCOME BACK TO "CHICAGO

TONIGHT."

SOME OF THE KEY FINDINGS OF THE

REPORT.

IF YOU WANT TO AMPLIFY SOME OF

THE THINGS.

>> HAPPY TO.

THE MANY FINDINGS BRECK DOWN TO

TWO CATEGORIES, OPERATIONAL SIDE

AND WHAT I CALL THE EDUCATIONAL

SIDE.

INVOLVE HIGH SCHOOLS.

ON THE OPERATIONAL SIDE, THAT IS

LARGE STEPS, ALMOST $900,000

WORTH OF THEFT ORCHESTRATED BY A

OPERATIONS EMPLOYEE AND IN TWO

SCHOOLS OVER A PERIOD OF ABOUT

FIVE YEARS.

>> HOW IS IT DONE?

>> YES.

HE BASICALLY OPENED VENDORS AND

MES ON THE VENDOR SIDE, HE

OPENED BASICALLY FAKE PURCHASE

ORDERS, AND GOODS AND SERVICES

THAT WERE NEVER PERFORMED.

AND YOU KNOW WE HAVE HUNDREDS OF

THOUSANDS THERE, AND ON THE

EMPLOYEE'S SIDE THE SMALLER

SIDE, HE BASICALLY, THEY HAD

FALSE REIMBURSEMENTS FOR THINGS

THAT WERE NEVER PURCHASED.

AND A HANDFUL OF OTHER

EMPLOYEES.

>> LET'S GET TO ANOTHER AREA

THAT YOU ADDRESSED.

MISCLASSIFYING DROPPOUTS.

HOW DOES THAT WORK AND WHY IS IT

IMPORTANT?

>> SO, YOU KNOW, IT GOES TO THE

SCHOOL'S DROPPOUT RATE.

THAT IS WHY IT'S IMPORTANT.

POEM ARE, ALL THESE CASES OF

PEOPLE SAYING THEY WERE

TRANSFERED FROM THE CPS SCHOOL

SYSTEM TO PRIVATE SCHOOLS OR

OUTSIDE OF CHICAGO ALTOGETHER.

THEY ARE USINGED CODE AS THAT

TRANSFER BUT IN THE MARGINS THEY

WERE STATING THEY WERE

TRANSFERED TO A GED PROGRAM OR

PLANNED TO ENROLL IN A GED

PROGRAM.

REALLY THEY DROPPED OUT AND

SHOULD BE CODED AS

APPROPRIATELY.

>> ALL TO MAKE THE SCHOOLS

STATISTICS ON THE DROPPOUT RATE

LOOK BETTER?

>> THAT IS WHAT WE CONCLUDE.

ALSO A COMPOUNDING ISSUE, THAT

THE TRANSFERS WERE FALSELY

VERIFIED.

SO THEY WERE BASICALLY, SOMEONE

IS GOING IN THE DATA BASE AND

SAYING THEY HAVE BEEN VERIFIED,

MEANING THEY RECEIVED

DOCUMENTATION WHEN THERE WASN'T

ANY IN THE FILES.

A PROBLEM THAT AFFECTED A BIGGER

BRUP THAN THESE GED TRANSFERS.

AND TELL US ABOUT THE ISSUE,

TALKING ABOUT LYING ABOUT

RESIDENCY TO GET KIDDED-- KIDS

IN SELECTIVE ENROLLMENT SCHOOLS.

>> FAMILIES ARE SAYING SOMEONE

LIVED IN A DIFFERENT

SOCIOECONOMIC AREA THAN THEY DID

TO GAIN FAVOR.

THE ENTRY SYSTEM TAKES ACCOUNT

DIFFERENT SOCIOECONOMIC TIERS

AND BASED ON CENSUS TRACKS AND

PEOPLE ARE SAYING THEY LIVE

WHERE THEY DIDN'T TO GAIN AN

ADVANTAGE.

SEVERAL KIDS, SEVERAL STUDENTS

WERE ALLOWED TO SCHOOLS BASED ON

THAT BUMP UP FOR THE CENSUS

TRACK THEY CLAIMED WHERE THEY

LIVED WHEN THEY DIDN'T.

THEY SAID THEY LIVED IN POOR ARE

NEIGHBORHOODS THAN THEY LIVED IN

BECAUSE THAT WAS FACTOR IN

ADMISSIONS?

>> WRE.

WE LOOKED AT SOME, SOME FAMILIES

AND SOME OF THE FAMILIES WERE

THE PARENTS WASHINGED AT CPS,

YES.

>> WHEN YOU LOOK AT THE RANGE OF

MISCONDUCT WHAT WAS MOST

DISTURBING TO YOU?

>> I THINK THE THINGS THAT GO TO

THE EDUCATIONAL CORE.

THE CASES INVOLVING FRAUD,

PEOPLE INSIDE THE SYSTEM TAKING

ADVANTAGE OF THE SYSTEM, THAT IS

PARTICULARLYING A REGION I

THINK.

ANYONE THAT WE TRY TO GAIN THE

METRICS OF THE DROPPOUT RATE,

THOSE ARE PARTICULARLY TROUBLING

BECAUSE IT GOES TO THE CORE OF

WHAT THE CHICAGO PUBLIC SCHOOLS

IS TRYING TO DO.

EDUCATE KIDS.

>> SOME OF THE NUMBERS, THEY ARE

ALL VERY DISTURBING, BUT HOW IS

IT THAT SOMEONE CAN GET AWAY

WITH EMBEZZLING OR STEALING

ALMOST A MILLION DOLLARS?

AREN'T THERE CHECKS AND BALANCES

AND REVIEW OF PACE WORK?

>> YES.

YOU KNOW, IN LARGE PART IT IS

NOT THAT IT WASN'T A $100,000

PURCHASE TIMES EIGHT, HUNDREDS

OF SMALL TRANSACTIONS, A COUPLE

OF THOUSAND, IN THE AGREE GATE

FALLS BELOW THE RADAR AND

QUESTIONS THAT REMAIN ABOUT YOU

KNOW, WHETHER THE ADMINISTRATORS

WERE PAYING PROSECUTE ATTENTION.

>> CPS SAYS THE PROBLEMS HAVE

BEEN ADDRESSED AND THE

INDIVIDUALS WILL BE ADDRESSED,

ARE YOU SATISFIED WITH THE STEP

THAT WERE TAKEN TO DEAL WITH THE

PEOPLE INVOLVED IN WRONGDOING?

>> YOU KNOW BY AND LARGE YES,

ESPECIALLY IN THE CASES OF

THEFTS.

PEOPLE HAVE BASICALLY RESIGNED

OR BEEN TERMINATED AND ONGOING

CRIMINAL INVESTIGATION.

>> AS FAR AS CRIMINAL

INVESTIGATIONS ARE CONCERNED,

DIAGNOSIS THAT AUTOMATICALLY

KICK IN, IF YOUR OFFICE FINDS

THAT SOMEONE HAS STOLEN

SOMETHING?

>> YOU KNOW, I THINK CRIMINAL,

THAT IS A GOOD QUESTION,

SOMETHING TO BE CONSIDERED.

AND CERTAIN CASES, YOU KNOW,

PROSECUTORS WILL HAVE TO BRING

IT TO THE PROSECUTOR'S DESK.

>> IS THERE A PATTERN OF THIS

CONDUCT IN CPS?

>> A PATTERN OF THIS CONDUCT.

>> OR ARE THEY ROGUE EMPLOYEES?

OR IS THERE A PATTERN OF ROGUE

MES?

IT'S A BIG SYSTEM AND THIS WILL

BE CASES AND I THINK THE

PATTERN, AMONG INDIVIDUALS AND

YOU KNOW THERE ARE CERTAIN

REPEAT THINKINGS THAT WE HAVE

SEEN A LOT.

BRINGING CASES AND VENDORS

HAVING FAKE ALTER EGOS AND GET

MORE SPENDING LIMITS AND

THINKINGS LIKE THAT.

THERE ARE CERTAIN REPEAT THINGS

THAT TO HAPPEN FROM

YEAR-TO-YEAR.

THEY DON'T INVOLVE THE SAME

PEOPLE TYPICALLY.

>> ASIDE FROM THE CONSEQUENCES

TO THE INDIVIDUALS WHO MAY HAVE

BEEN INVOLVED WHAT STEPS ARE

BEING TAKEN TO PREVENT THIS FROM

HAPPENING?

ANY TWEAKS TO THE SYSTEM?

>> THAT IS ALWAYS A BIG PART OF

WHAT THEY DID ACROSS THE WORD

BOARD, TRY AND FUNDS WHERE THE

SOFT SPOTS ARE AND MAKE

RECOMMENDATIONS.

AS FAR AS THINGS LIKE STRINGING,

WE ARE RECOMMENDING MORE

TRAINING.

>> STRINGING IS WHEN PEOPLE

STRUCTURE PURCHASES THAT STAY

BELOW A COMPETITIVE PURCHASE

LIMIT.

>> WE HAVE A GRAPHIC THAT SHOWS

SOME OF THE TOP COMPLAINTS THAT

YOUR OFFICE RECEIVED, AND LET'S

LOOK AT THE NUMBER OF

COMPLAINTS.

ON DUTY CRIMINAL CONDUCT, 95.

CONTRACTOR VIOLATIONS, 70.

MISAPPROPRIATION OF FUNDSES 63,

OFFDUTY CRIMINAL CONDUCT, 61.

HOW MANY TIPS DOES YOUR OFFICE

RECEIVE?

>> WELL OVER A THOUSAND A YEAR.

LAST YEAR WE RECEIVED 1335.

HOW MANY DID YOU FOLLOW UP ON?

>> I THINK AROUND 280.

JUST OVER 20%.

>> WHY IS THAT, IN TERMS

RESOURCES HOW ARE YOU DOING?

>> OUR OFFICE IS LEANLY STAFF.

WE REPORTED THAT FOR YEARS.

WE HAVE 17 PEOPLE.

AND OF THOSE HOW MANY DO

INVESTIGATIONS,?

THIRTEEN.

>> THERE IS NOT A LOT OF BLOAT

THERE.

>> WE ARE VERY LEANLY STAFFED

OFFICE.

ARE THERE TIPS THAT ARE VIABLE

THAT YOU CANNOT GET TO?

>> THAT IS MY SENSE FOR SURE.

>> I WOULD ASK YOU ABOUT A

COUPLE OF THINGS THAT ARE NOT

INCLUDED IN YOUR REPORT BUT HAVE

BEEN IN THE NEWS.

THE "SUN-TIMES" INVESTIGATION

FOUND THE COMPANIES IN WHICH

SCHOOL BOARD MEMBER DEBORAH WAZ

AN INVESTOR TRIPLED THAT

BUSINESS WITH CPS SINCE HER

APPOINTMENT BY THE MAYOR.

AND THEY SHOWED CHUY WANTS HER

FIRED.

IS YOUR OFFICE INVESTIGATING

THAT?

>> I FOUND THE RECORD AND WE

ARE.

>> YOU ARE INVESTIGATING.

THE SECOND QUESTION WHAT IS THE

STATUS OF THAT INVESTIGATION?

>> ONGOING.

>> AND ANOTHER WITHIN HAS TO DO

WITH THE CUSTODYIAL CONTRACT.

MANY SCHOOLS ARE IN THE GETTING

ADEQUATELY CLEANED UP BY MALL

STAFFS AND THESE SAME WILL HAVE

THE CUSTODIANS WILL CLEAN UP THE

SNOW AS WELL.

WAS THAT IN THE CONTRACT

IMPROPERLY AWARDED?

>> I'M NOT IN A POSITION TO

COMMENT ON THAT.

>> GETTING BACK TO THE REPORT,

WHAT DID YOU WANT PEOPLE TO TAKE

AWAY FROM IT?

>> I THINK IN GENERAL, I THINK

IN GENERAL, A GREAT DETERRENT

VALUE AND I WANT PEOPLE TO KNOW

THERE ARE RULES.

WE EXPECT PEOPLE TO FOLLOW THEM

AND THEY WILL BE HELD