Teachers Institute Contract Work Might Be Illegal, Audit Finds

By Joe Stephens
Washington Post Staff Writer
Thursday, October 2, 2008

The D.C. school system could have saved as much as $2.25 million by having its teachers conduct reading instruction instead of contracting the work to the nonprofit Teachers Institute, using an arrangement that violated city regulations and might have broken the law, an inspector general's audit has concluded.

District Inspector General Charles J. Willoughby investigated the operation for a year, uncovering what his report described as overpayments, conflicts of interest and a "serious breakdown of internal controls" in the school system. The audit questioned the effectiveness of the program and suggested the school system might have to repay as much as $2.9 million in federal funding because of contracting irregularities.

Teachers Institute officials improperly solicited funding from D.C. schools while they were still on the school system payroll, the audit found, and school officials paid millions without seeking competition or negotiating a contract. A year later, school officials improperly bypassed the mayor and D.C. Council when approving an additional $1.4 million for the institute, the report said.

The institute, a nonprofit literacy training organization founded by Washington educator Sheila Ford, was funded entirely by D.C. schools. It implemented a training program for local teachers known as the Reading and Writing Project.

Ford did not respond to a request for comment. In a written response to the auditors, she and institute Chairman Richard Spigler said they took "exception" to the investigation's length and because the probe was "based on false allegations" by a former employee. "We are proud of the work done by Teachers Institute and its accomplishments," they wrote.

In December, The Washington Post reported how the institute, which at the time had two employees and operated rent-free in the attic of a school building, had received millions in taxpayer dollars without formal competition. Ford and other district employees had arranged funding for the new group a few weeks before her retirement. In June, Schools Chancellor Michelle A. Rhee cut off funding to the organization, effectively halting its operations.

Auditors said that the institute's contract with the school system had authorized paying Ford $112,500 a year but that she received $150,000. It also said the institute improperly paid D.C. teachers and administrators about $200,000 in cash and expenses for attending classes and training sessions, performing after-school assignments and traveling to programs in New York City. School administrators stayed in rooms costing as much as $344 per night, the audit said, although the authorized per diem rate for school employees was $177.

The audit noted that, in some cases, making private payments to or on behalf of public employees can be a federal crime.

The report questioned the institute's payments to private consultants, one of whom received $156,000 in one year without records to document what work was performed. The institute paid a contractor $130,000 to place 124 computers in classrooms, then $253,000 more to maintain them.

Beyond financial concerns, the report noted that the institute's "balanced literacy" instructional philosophy conflicted with the official Houghton Mifflin program mandated by the school system. Preliminary test results from schools that worked with the institute showed no significant increase in reading proficiency scores, during a time in which the district showed an overall 8 percent increase, the report said.

Yesterday, schools spokesman Dena Iverson said officials "are working diligently to ensure that all contracts and agreements that [the D.C. system] enters follow the proper procedures and benefit our students."

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