D.C. Blitzes School Records Mess

Millions of Employee Documents Sorted as Part of Fiscal Cleanup

The District government is spending $2 million to scan, catalogue and index an estimated 4.6 million records related to school system employees as part of an effort to address accounting problems that could threaten the city's overall fiscal health.

The Office of the Chief Financial Officer is paying two contractors, Document Systems and DigiDoc, a total of $1.4 million to obtain equipment and pay workers to sort through 1,426 boxes of records and match orphaned documents with the proper employee files. The school system and the city's technology office are contributing a combined $600,000.

Problems with the school system's internal controls over payroll, procurement, federal grants and Medicaid services were among the issues highlighted in January in the District's annual performance review, known as the Comprehensive Annual Financial Report.

The auditing firm BDO Seidman LLP gave the city a "clean" audit but classified the school system's problems as a "material weakness" in the District's overall financial health. Chief Financial Officer Natwar M. Gandhi has said that if the conditions cited in the report do not improve by next year, the District would be in serious jeopardy of receiving an "unclean" audit, which could prompt Wall Street to downgrade the District's bond ratings.

As a result, city leaders have been under pressure to show that they are addressing those weakness before the fiscal year ends Sept. 30.

Maryann Young, a spokeswoman for Gandhi, said yesterday that the office had entered into the contracts with Document Systems and DigiDoc to address the issues flagged in the audit.

"It is because of the material weakness problem. That is a financial reporting concern, that is critical for us to solve," Young said.

The records overhaul has been quietly underway since mid-July, but with days to go before school opens Monday, Mayor Adrian M. Fenty (D) and Schools Chancellor Michelle A. Rhee invited reporters yesterday to observe.

On the fifth floor of the school system's headquarters, in a room once reserved for school board meetings, workers hunched over rows of boxes, sorting and filing papers.

Wearing gloves to protect their hands from paper cuts, workers have sorted and electronically scanned 2 million pieces of paper, said Vivek Kundra, the city's chief technology officer. Some of them filed the records, which included information on employee benefits, recommendation letters and payroll information. On the sixth floor, about eight workers sat at large scanning machines and turned the pieces of paper into digital files.

About two weeks into the project, Gandhi's office expanded the scope of the contract after discovering that the backlog of records was three times as large as initial projections. The daily operation now involves 60 workers over two shifts. The school system has spent about $500,000 on temporary workers as its share of the project costs.

Nathan Saunders, vice president of the Washington Teachers' Union, said yesterday that over the years, teachers have complained that important papers were missing because the school system's human resources division had failed to file them.

"It's a paper-intensive system," said Saunders, who added that he has had to submit multiple records related to his teaching certification. He said that teachers have been doing the paperwork required of them but that "the information just hasn't made it into their personnel file."

Rhee has replaced the acting human resources director, Johnnie Fairfax, with Thelma Monk, who held a similar post in Montgomery County public schools. Fairfax is now working on special projects in the chancellor's office.

This month, Fenty and Rhee showed reporters a warehouse full of boxes of supplies and textbooks while discussing the system's history of failing to deliver textbooks on time. Today, Fenty and Allen Y. Lew, chief of the city's new school modernization office, plan to give an update on the condition of school facilities.

Fenty said yesterday that Lew and Rhee are addressing mistakes of the past.

"Everywhere the chancellor and our facilities director are going these days, they're having to turn around decades of a lack of urgency and a lack of attention to detail on really the basics of running a government agency," Fenty said.