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Children in Crisis: The Failure of Public Education in the District

District of Columbia Financial Responsibility and Management Assistance Authority
November 12, 1996

The Failure of Public Education in the District

DCPS is failing. While there are individual schools and students that have records of outstanding academic performance, excellent management by principals, and exceptional community and parent involvement, the school system as a whole is in a state of crisis. DCPS' management structure and education delivery system have failed our children.

DCPS fails to teach its pupils even the basics of education. As a result, the system's students score significantly lower on standardized academic achievement tests than their peers in comparable districts around the nation. Performance varies extensively among wards; the least affluent wards have experienced the greatest decline in test scores over the last five years. The assessment of the school system based on these statistics is frightening: on average, for each additional year that students stay in DCPS, the less likely they are to succeed, not because they are unable to succeed, but because the system does not prepare them to succeed.

Assessments of DCPS' administration and operations are just as bleak. The system does not have effective budgeting, personnel, and procurement processes in place. Because the budgeting process does not allocate adequate funds into particular accounts, hundreds of reprogrammings are required each year which limit the budget's effectiveness as a planning and management tool. Personnel management also has significant shortcomings. For example, new teachers were hired by DCPS in September, yet many had not been paid two months later. Furthermore, the lack of an adequate contract review process has allowed DCPS to develop contracts that have been questioned publicly.

In addition, DCPS lacks a comprehensive facilities plan. The children are suffering under substandard conditions that are shameful and dangerous. Even after two years of controversy, fire code violations still persist. District students often find themselves in classrooms with leaky roofs, no heat in the winter, and without the knowledge that they are secure from acts or threats of criminal violence against their personal safety.

Moreover, the public school system is mismanaged. The Superintendent even concedes his lack of control over numerous fundamental operations of the system, including not even having an accurate estimate of the number of people employed by his organization or the number of students they serve. Also, the Board of Education has failed in its responsibility to oversee the school system adequately, which includes evaluating the Superintendent and contract oversight.

By any basic category for evaluation -- such as educational, managerial, financial, and physical safety -- the school system has failed our children placing itself in a state of educational and operational crisis. Fundamental justice for the school children, their parents, and all the taxpayers and citizens who support and depend upon DCPS, requires a complete overhaul in governance structure and management systems.

Education Outcomes are Inequitable and Weak

Over the past five years, the erosion in the District's public schools has accelerated, especially for the thousands of children in the poorest wards. Since 1991, test scores on the Comprehensive Test of Basic Skills (CTBS) show a net decline in both reading and mathematics skills (see figure 1).2 Between 1991 and 1996, mathematics scores declined by an average of 6 percent for grades 6, 8, and 11, and reading scores declined by 13.5 percent in grade 6 and remain below national norms in grades 8 and 11.

Even internally, DCPS students, over time, do not show any improvement in test scores. Test scores declined from 1992 to 1994, without exception in both reading and math. The CTBS scores suggest that the longer students stay in the District 's public school system, the less likely they are to succeed educationally. This failure is the result not of the students -- for all students can succeed -- but of the educationally and managerially bankrupt school system.

Figure 1: Comprehensive Test of Basic Skills Test Scores, 1991 -1996

Mathematics
Grade 1991 1992 1993 1994 1995 1996 National Norm
6 67 65 62 61 63 62 50
8 48 44 46 44 44 44 50
11 42 44 43 41 40 41 50
Reading
Grade 1991 1992 1993 1994 1995 1996 National Norm
6 52 49 46 47 48 45 50
8 40 39 39 39 41 41 50
11 32 39 34 35 36 34 50
Source: DCPS Office of Educational Accountability

While test scores in wards 1, 3, 4 and 5 have remained the same or slightly improved, scores in wards 2, 7, and 8 have declined significantly. Several schools in wards seven and eight have seen startling declines in test scores of 15 to 20 percentage points or more. Ward 7, for example, declined 12 percentile points between 1991 and 1996. The low achievement levels attest to the fact that thousands of children, especially in wards 2, 7, and 8, are not being taught the fundamental skills necessary to succeed after they leave DCPS.

The CTBS is not the only standardized test on which District students underperformed the national average. On the Scholastic Aptitude Test (SAT), District students performed well below students nationwide. While SAT scores can be skewed because the population is self-selecting, they show that DC students performed well below the national average by close to 100 points (see figure 3). Such poor performance is not the result of the inability of District students to excel -- the Authority believes that every child can learn and that every student can succeed -- but of the school system's failure to fully prepare them for test taking and teach them critical thinking and analysis skills.

Figure 3: Scholastic Aptitude Test Scores, 1991-1995
Verbal Mathematics
Year DCPS National Avg. DCPS National Avg.
1991 334 422 368 474
1992 336 423 369 476
1993 338 424 373 478
1994 333 423 373 479
1995 342 428 375 482
Source: DCPS Office of Educational Accountability

On the National Assessment of Educational Progress (NAEP) Trial State Assessment, the performance of District students also has declined. In the latest assessment, fourth graders' reading progress declined by 6 points (see figure 4; use your browser's Back button to return) between 1992 and 1994. Seventy-eight percent of District 4th graders, performing below the basic reading level,3 were unable to demonstrate that they understood the overall meaning of passages they read, nor could they relate the text to their own experiences.

Of the 39 states that reported proficiency scores to the National Center for Education Statistics, DCPS' 180 was the lowest average score of any state -- well below the national average of 216. DCPS was the only jurisdiction that had an average score under 200.4

Violent Behavior Persists

Not only has educational achievement declined in the District's schools, but both students and teachers are subjected to levels of violence that are twice the national average, according to the National Education Goals Panel. The following comparisons show how DCPS measures against national averages:

  • 16 percent of DC public high school students reported carrying a weapon on school property during the last 30 days, compared to the national average of 12 percent
  • 11 percent of DC public high school students reported they were threatened or injured with a weapon in the past 12 months, compared to the national average of 8 percent
  • 11 percent of DC public high school students reported avoiding school because they felt unsafe in the past 30 days, compared to the national average of 6 percent
  • 18 percent of DC public high school students reported they were in a fight on school property during the last 12 months, compared to the national average of 16 percent5
In addition, nearly two-thirds of the District's teachers say that violent student behavior interferes with teaching (see figure 5). Nationally, the percentage is less than half.

Although there are a variety of ways to deal with discipline issues, one way that is measured nationally is suspensions. Interestingly, despite the systemic problems with crime, violent behavior, and discipline in the District's schools, substantially fewer students are suspended in DCPS than in other school systems around the country. Figure 6 shows that the District suspends just 24 students per thousand, compared to a peer district average of 123 students per thousand. Some systems, including Cleveland, Milwaukee, and New Orleans, suspend eight times as many students as DCPS.

Graduation Rates Remain Poor

Between 1989 and 1995, 40% of high school students either dropped out or left the District's public schools. Over the last three years, students dropped out or left DCPS at an increasingly faster rate. In 1995, only 53 percent of the students who entered DC high schools in 9th grade remained to graduate four years later -- a decline of over 10 percent from the 1993 statistic. The greatest migration out of DCPS for the classes of 1993 to 1995 occurred in grades 11 and 12. In 1995, the total number of students in DCPS fell from the previous year by over 27 percent in 11th grade, and by 24 percent in 12th grade. Figure 7 (not included in this HTML version) depicts this attrition in the student population.

A System of Mismanagement

Although the Superintendent and the President of the Board of Education have argued that more dollars are needed to support the District's schools, it remains to be determined whether or not additional operational funding is needed in the light of an assessment of per capita spending. Funding for DCPS comes from local funds, and federal and private grants. Funding peaked in Fiscal Year (FY) 1994 and has declined slightly since then. Figure 8 (not included in this HTML version) shows funding over the past ten years in constant dollars.

Comparisons of the District's school expenditures with other jurisdictions are difficult because ofthe many ways in which expenditures are reported. However, the District's average cost per student clearly exceeds the national average, and it is also substantially higher than many comparable urban school districts and neighboring districts. Figure 9 depicts these comparisons.6

By examining DCPS budgets from previous years, reviewing expenditure.pattems, and comparing funding with similar school districts, it is clear that a contributing factor to the deficits that have arisen is inadequate oversight by management and the Board. For example:

  • Personnel mismanagement results in a large numbers of teacher and educational staff employed by DCPS who have no direct interaction with students
  • Lack of an overall facilities plan results in ineffectively targeted facilities funding
  • Weak procurement controls result in large numbers of dollars misspent on questionable contracts
  • Poor overall budget and financial processes make it difficult to develop adequate budgets and effectively monitor expenditures
These are management failures that clearly have a direct impact on the DCPS' educational mission and ability to perform.

The following sections outline the condition of DCPS' critical management components and how those management failures directly and indirectly affect the learning mission.

Personnel Management: DCPS lacks controls over personnel

DCPS' personnel operations are in disarray. Every aspect is problematic: the inability to identify the total full-time equivalent (FTEs) positions, lack of adequate administrative controls, incomplete planning, and the inability to understand or relate the impact of personnel on the educational mission.

DCPS is also not focusing its resources at the educational level. Hundreds of personnel do not directly serve the students in schools. For example, two executive assistants working in the Superintendent's Office are shown in the personnel records as assigned to the Elementary Education function. Because of poor data, it is impossible to determine the location and number of personnel on a timely basis. There are numerous indications of educational personnel not working in the schools despite a personnel database that indicates otherwise. Such error-prone information makes it impossible to know how many and which personnel are directly serving the District's students.

There are numerous examples of DCPS' ineffective management of its personnel. The following are some examples:

  • Although DCPS officials claim that they reduced the number of personnel over the past several years, payroll does not support this assertion

    According to the information available, between October 1993 and April 1996 DCPS only managed a net reduction of 112 FTE positions. During this period, both the Superintendent and President of the Board of Education claimed that hundreds of personnel had been cut from the budget. For the pay period ending September 30, 1996, payroll data does show a substantial reduction in DCPS personnel to 9,800 FTEs from 11,460 in October 1993. If this data is accurate, this represents a substantial personnel reduction. However, according to information provided by the DCPS Chief Financial Officer (DCPS-CFO), there were hundreds of recently hired teachers and other personnel whose personnel documents were not processed in the September 30 payroll -- therefore the number of FTEs was undercounted. Figure 10 (not included in this HTML version) shows DCPS personnel levels since 1993.

    DCPS' inability to manage personnel is demonstrated by efforts to reduce personnel during early FY 1996. In August 1995, the Authority recommended that DCPS reduce its FTEs by nearly 1,400 positions to 10,167 FTEs.7 Instead of an orderly reduction in personnel, DCPS officials elected to make all the reductions during the last quarter of the fiscal year. Moreover, instead of reducing personnel, DCPS hired hundreds of additional staff at the beginning of the FY 96, increasing its FTE totals from 11,091 in October 1995 to 11,616 in February 1996.8

    Figure 11 (not included in this HTML version) illustrates the magnitude of the early FY 96 hirings. Over the course of the school year, DCPS hired scores of personnel and did not perform the necessary staff reductions. Furthermore, most of these hirings were not school-based personnel. As seen below, between October 1995 and May 1996, DCPS' FTEs far exceeded the Authority's recommended personnel ceiling adding a drain upon the school system's limited resources.

    When questioned by Authority staff about the hirings, the DCPS personnel director said he authorized the hirings because positions were vacant.9 While technically true, DCPS' budget had been reduced from $594 million in FY 95 to $575 million in FY 96. These hirings put additional fiscal stress on a system that was already bending under the weight of previous financial pressure. Because few personnel were eliminated, the budget reduction was financed out of non-personnel funds, taking away from textbooks funds and facilities maintenance.

    Overall, DCPS does not have reliable data on the number of employees that work in the school system. As recently as October 3, 1996, the Superintendent of Schools was quoted as having stated that he did not know how many employees work for the system.10

  • DCPS has circumvented personnel ceilings by hiring hundreds of employees through staffing agencies, personal service contracts, or purchase orders

    FTEs are not the only positions that DCPS has difficulty controlling. For example, DCPS contracted with Potomac Personnel for 100 food service workers in addition to those it had already allocated to food services. In addition, many of the school nurses were hired under a contract with National Nurses, Inc. In yet another example, DCPS has hired more than 100 bus drivers and drivers' aides under contract. Such practices allow DCPS to circumvent the personnel ceilings established by the District government to manage DCPS' expenditures and to prevent the hiring of more personnel.

  • DCPS employs hundreds of unauthorized personnel

    Overhiring and failing to control personnel expenditures are not new phenomena in DCPS. Historically, the system has had difficulties managing its personnel expenditures. The reports of the District of Columbia City Council (Council) Education and Libraries Committee on DCPS budgets have documented similar problems. The FY 95 report outlined the way in which millions of dollars have been diverted from critical maintenance and textbook funds in order to pay for personnel.11 Despite this acknowledgment, little was done by DCPS to rectify the problem. The pattern continued into FY 96, when millions of dollars were reprogrammed to cover the deficit caused by uncontrolled personnel expenditures.

    One reason for the deficits in the personnel budgets is the existence of hundreds of unauthorized individuals on the school system's payroll. Data provided by DCPS in August 1996 shows that at least 200 people were paid every pay period without a required Personal Control Number (PCN).12 According to testimony by the DCPS CFO at the Authority's September 4, 1996 public hearing, these unauthorized personnel have cost over $30 million over the last three fiscal years.13

    In addition, data maintained by the District's Personnel Office shows that more than 2,300 positions in DCPS do not have the required Unified Personnel Payroll Systems (UPPS) numbers.14 Such a number is required to document that the position is officially sanctioned by the government. Each pay period, exception reports are generated that list all employees who do not have an UPPS number. These reports are routinely forwarded to DCPS, but no action is ever taken to rectify these information omissions. These same individuals appear on exception reports from one pay period to the next without DCPS verifying said employees' status.

The problems within DCPS' personnel operations are exacerbated by the fact that many personnel records are incomplete, missing, and/or out-of-date

Staff position listings are error-prone. In August 1996, in preparation for the Authority's public hearing on school readiness, the DCPS Personnel Office provided information on the status of school staffing, including teaching, administrative, and maintenance positions. This data indicated that less than 100 positions were vacant as of mid-August. However, the data was replete with errors. In one instance, the data included the staffing needs of four schools that had been closed.15 Staffing problems have continued into this school year. As of late September 1996, teachers who were hired and working for a month have not been paid, timesheets are being submitted for personnel who have retired, and staff who retired in June have not yet received their retirement checks.

"Sometimes we don't know exactly where they [DCPS employees] are . . . but we know who they all are." -- Jim Daugherty, DCPS Director of Personnel
Payroll reviews indicate that employees are not in assigned locations. A payroll review conducted by the Authority estimates that one-third of DCPS employees are not at the locations assigned to them in the personnel files. Several principals have reported to the Authority staff and to private auditors that the timesheets they receive have names of personnel who have transferred several years earlier or who they do not know at all.

Similarly, there are employees in DCPS who are listed under the wrong responsibility centers (RCs).16 Even the members of the Superintendent's executive management team are not listed within the correct RCs. Of the top 25 executives and leaders associated with DCPS, only one is listed as an Executive Service employee. However, the individual listed is actually a kindergarten teacher responsible for overseeing the Mathematics, Science, and Technology Initiative. The remaining executive leadership team, including the Superintendent, Vice-Superintendent, and other management/ administrative personnel, are improperly listed as either Career Appointments or Education Service Appointments.

Updating this information would be difficult in the current system because hundreds of personnel folders cannot be located. Efforts to follow up on the recent payroll audit were hampered by DCPS' inability to find 25 percent of the persormel folders requested. Even if the files could be found, the information included might not be informative or substantive. Hundreds, if not thousands, of personnel files are incomplete and replete with errors. The DC Auditor, who serves as the watchdog for the City Council, recently outlined numerous examples of file irregularity, including a personnel file showing that a teacher who had retired more than a decade ago was still receiving regular paychecks. The auditor also observed thousands of personnel documents stacked in boxes that needed to be filed.

Teacher qualifications are not updated regularly, resulting in substantial back payment adjustments. Data on qualifications of teachers is not updated in a timely manner, resulting in large back payments because of changes in the compensation rate (that is, a teacher earning an advanced degree qualifies for higher pay). Every pay period scores of DCPS employees receive back pay adjustments because the personnel records were not updated in a timely manner.

DCPS' Certification Office and Personnel Office have poorly coordinated functions with respect to teacher certification. In a separate survey commissioned by the Authority, review of personnel records and observation of nearly 300 classes found that 32 percent of classroom teachers do not have required teacher certifications.17 No records of certification could be found at DCPS' Certification Office or in DCPS ' Personnel Office for 13 percent of the teachers observed. In addition, another 15 percent of the teachers observed appeared to have an expired certification, and 4 percent of the teachers observed were apparently ineligible for certification.18 Finally, the staff observed throughout the survey that DCPS' teacher certification records are poorly organized and haphazardly maintained, and appear to be substantially incomplete.

All these problems, collectively, illustrate a personnel operation that does not function efficiently or effectively. These problems in personnel would be alarming enough in and of themselves. However, they have a significant impact on the other areas of DCPS' operations. Since personnel constitute over 80 percent of DCPS' costs, personnel mismanagement has a significant impact on the budget. While DCPS, as of October 1, 1996, is under the FTE cap by 356 positions, the margin for error is non-existent. Many of the teachers that have been hired this fiscal year are not yet entered into the payroll system and therefore do not show up against the FTE cap. As these employees are entered into the system and the true number of employees becomes known, DCPS' success in separating employees will become clearer.

The group most affected by personnel mismanagement are the students that the system serves. Currently, DCPS cannot determine whether all of its teachers are qualified and certified to instruct students. Furthermore, the lack of personnel records makes it just as difficult to determine if principals possess the necessary qualifications to manage the schools. These types of occurrences result in the reduction of the quality of education being delivered to some, if not all, students in the system.

Facilities Management: buildings are in disrepair and underutilized

DCPS has also mismanaged the repair and maintenance of its facilities. Throughout the system, buildings are old, in disrepair, and underutilized.

  • Fire code violations are abundant

    For the last two years, many District schools have been unable to open on time because of fire code violations. At the beginning of this school year, several schools were closed, disrupting classes for over 3,000 students at all grade levels. Students were taught in churches and other non-school properties. The logistical difficulties associated with the massive shift in educational sites contributed to an atmosphere harmful to the educational process. Students did not have access to their textbooks, supplies, or adequate educational facilities. These make-shift sites also lack the equipment necessary to provide standard food services.

  • Aging buildings seriously hamper the District's learning environment

    The recent problems with fire code violations are only symptomatic of the overall state of facility disrepair. The average school in the District is more than fifty years old, and the availability of capital funds to improve them has been limited. A report by the Superintendent's Task Force on Education Infrastructure for the 21st Century estimated that $ 1.2 billion would be needed to upgrade all schools to current standards. This estimate was based on a 1995 Project Resources Inc. (PRI) study that had updated a 1992 facilities assessment through the use of a representative sampling technique. The General Services Administration (GSA) has now updated that information and estimates that over $2 billion is required. With every rain storm, students are subjected to leaking roofs. With every cold spell, many students must put on overcoats to keep warm. This is clearly unacceptable when it comes to our children and their education.

  • Capital funds have historically been poorly managed

    Although it is clear that there are not enough funds to address all the facility needs, it is also clear that the available funds have been poorly managed. Since 1985, DCPS has had more than $ 130 million in capital funds, yet DCPS has not spent all of the capital or operating funds available. For example, funds were set aside in the FY 96 budget to move and install equipment from closed schools to temporary facilities. Although equipment was moved, DCPS failed to obligate funds for installation. In one instance, students taking specialized trade classes at Chamberlain High School could not continue their studies because of DCPS' failure to provide proper educational supplies to Chamberlain's temporary facility. This failure may delay granting degrees and licenses for these students. Furthermore, in FY 96, DCPS lost $3 million for facilities maintenance because it failed to spend the funds.

  • The District may have too many schools

    Benchmarking against peer school districts also suggests that the District has too many schools. For example, like the District, New Orleans also has approximately 80,000 students enrolled in public schools, yet New Orleans operates only 122 schools while DCPS, with the closure of six schools this year, has 158 sites.

    Many observers see a link between DCPS' problems of dilapidated facilities and its problem of excess capacity. The Rivlin Commission and the Committee on Public Education (COPE) have proposed closing unneeded schools and using the proceeds from the sale or lease of these properties to fund capital improvements.19 At the same time, closing the most dilapidated properties would allow the schools to concentrate capital and operating dollars on a smaller number of schools.

  • Lack of a facilities plan has resulted in largely underutilized schools

    Despite the existence of facilities problems for years, DCPS has never developed a strategic plan for how to address facilities management. This is especially important because DCPS currently has substantial excess facilities capacity. In fact, DCPS has nearly two million more square feet of school space today than in 1970, when enrollment was 150,000 students, or about twice as many as today. Based on capacity data from the Superintendent's Task Force for the 21st Century and enrollment as of October 3, 1996, the average DCPS elementary school is at 74 percent of capacity, the average middle or junior high school is at 57 percent of capacity, and the average senior high school is at 69 percent of capacity. Figure 13 (not included in this HTML version) depicts the utilization rates of a sample of 10 schools. In fact, 23 schools are at 50 percent capacity or less. The Task Force's estimates for facilities repair includes nearly $349 million to upgrade these 23 schools.20

While the overall school utilization rate for DCPS is 68 percent, there is a wide variation among wards -- ranging from 101 percent in ward 3 to 57 percent in ward 5. Figure 14 depicts these variances.

Figure 14: DCPS School Utilization Rates by Ward
Ward Enrollment Capacity Utilization Rate
1 7,737 9,450 82%
2 7,706 9,158 84%
3 5,312 5,259 101%
4 9,768 12,006 81%
5 10,470 16,258 64%
6 8,096 12,007 67%
7 12,194 21,516 57%
8 11,998 20,280 59%
Source: District of Columbia Public Schools

Fixing all of DCPS' 180 used and vacant facilities would not be an efficient expenditure of DCPS' limited resources. But, DCPS has never developed a strategic facilities plan that prioritizes the use of its limited resources. Such a plan must consider educational needs, demographic characteristics, real estate factors, and building needs. According to GSA, such a study can be completed in 90 days.

Indicative of the problems caused by the lack of a facilities plan is the haphazard method of choosing priorities for facilities repair. For example, Noyes Elementary School submitted a roof repair request two years ago. This was deferred until a District Judge closed the school citing the roof as a fire code violation. Only after attention was drawn by the closure did the school system act to replace the roof.

Clearly, facilities need to be closed, and alternative methods of providing quality classroom space, including new construction of modern facilities if cost effective, need to be considered. The Task Force report that produced the $ 1.2 billion estimate recommended development of a strategic plan, but the plan has not been produced. Without such a plan, DCPS funding is spent on short term concerns such as the next leaky roof or missing fire door, irrespective of long term needs, priorities and thought to which schools should remain open. In managing its facilities, DCPS has failed to undertake repairs proactively and has not maximized the value of its resources, either of space or capital.

Budget and Finance: systems are flawed and error-prone

DCPS budgets are unrealistic and controls over expenditures are inadequate. These problems make it difficult to accurately determine the cost of various operations on a timely basis and make it impossible to hold managers accountable for budget ceilings. With such poor budget processes, DCPS managers can not assure that limited funds are focused on areas that directly impact the educational mission.

  • Operations are flawed by unrealistic budgets

    Historically, budgets have been put together with little planning, oversight, or forethought. For example, in FY 96, the Budget Office allocated $75,000 for garbage pickup for the entire year. However, in prior years, the actual cost of this service exceeded $1 million and there was no justification for such a major reduction. In order to create a balanced budget on paper, the real numbers were ignored.

    Providing appropriate funding is not a consideration in preparing the DCPS budget. As a result, later in the fiscal year as funding runs out, it becomes necessary to reprogram funds from other line items that still have money remaining in them. As was noted under the personnel management function, the largest continuing unrealistic budget item has been for personnel. Each year, the personnel function is underbudgeted by millions of dollars.

  • Hundreds of funds are reprogrammed annually

    Because of unrealistic budgets, hundreds of reprogrammings are required each year. A reprogramming of funds becomes necessary when adequate funds are not available in a particular account. Some reprogrammings are necessary for unforeseen events -- such as a colder winter driving up utility costs. However, DCPS constantly reprograms funds during the year to compensate for unrealistic budgeting or unforeseen spending. With the large number of budget reprogrammings, it is evident that the current budget documents are useless as management and planning tools.

  • In some cases, significant amounts of funds are moved without being reprogrammed

    In other instances, funds have been shifted without any required reprogramming. A significant example of this occurred in the food services program. Over the past three years, more than $ 12 million from the food service program has been used to fund non-food service operations. Specifically, in FY 94, $2.4 million in food service funds was spent on programs not related to food service operations; in FY 95 $5.4 million was spent; and in FY 96 $4.5 million was spent in non-food areas.

    Frequently this shifting of funds occurs without the knowledge of the managers overseeing the program. In one instance, the Facilities Maintenance Division lost $2 million in the process of balancing budgets without any prior warning. In other examples, funds budgeted for supplies were taken from school principals to fund underbudgeted items. For example, last spring numerous principals complained that the loss of supply funds would result in fewer supplies for this school year. The results of the school readiness survey confirmed this prediction: as many as 20 percent of the selected sites said that adequate supplies were not available.

  • The focus of short-term savings precludes budget planning

    DCPS budget problems include the lack of planning. Like other District agencies, efforts to keep within the overall budget focus on short-term, one-time savings, such as furloughs, rather than structural improvements. For example, at the beginning of FY 96, DCPS knew they had to reduce budgeted expenditures by $32 million to stay within the budget. In February 1996, DCPS submitted a gap-closing plan. According to the DCPS-CFO, an analysis of this plan showed that 80 percent of the reductions were one-time measures. Only 20 percent were permanent structural changes in the District's budget or spending.

The overall state of DCPS' financial management is best summarized by DCPS' appointed CFO. On September 4, 1996, the CFO testified before the Authority and stated that:

"The current financial condition and financial management of the District of Columbia Public Schools is in disarray. The budget process is lacking fundamental attributes of sound financial management and budgetary principles. There is little planning that sets a road map for the preparation, formulation and implementation of the budget. The lack of accurate and timely financial information generally, and the absence of accurate student enrollment numbers specifically, are impediments to establishing a credible funding formula and space utilization plan. The Capital Improvement budget for the District of Columbia Public Schools is generally ignored."
Efficient and effective budgeting is critical to long term stability for DCPS. Educating children becomes difficult if budgets are not effective planning and management tools because resources will not be allocated adequately. Our children only suffer more when the systems does not properly plan its spending on education.

Procurement: questionable and costly practices

Like other DCPS management areas, the procurement office exhibits clear indications of mismanagement. Contracts have been entered into with unqualified vendors that have not provided adequate service in the past. Other contracts have been executed without required competition. These practices have resulted in overpayment for some services and payment for other services that have been substandard. For example, a contract with an unqualified food service vendor resulted in cold breakfast cereal being served to students for lunch, and a contract with an unqualified firm resulted in seriously deficient conditions for some special education students.

There are several aspects of DCPS' contracting operations that raise concerns:

  • The quality of contract files is poor

    The Authority consistently receives contracts from DCPS that are incomplete, incorrect, and filled with miscalculations. Such poor quality contract files are not abnormalities, but the standard for the system. In one instance, a textbook contract was miscalculated, resulting in a contract value that was incorrect by several hundred thousand dollars.

  • Inadequate procurement planning forces DCPS to issue emergency contracts

    The lack of adequate procurement planning by DCPS results in an atmosphere of crisis management. For example, in many instances, contracts arrive at the Authority without a significant amount of time available for review and approval. These contracts have an "emergency" status and must be approved quickly to prevent service stoppages. In the most egregious case, the Authority received a food services contract on July 14, 1996 with an execution date of July 16, 1996. Had the Authority approved this contract, it would have unnecessarily increased DCPS' financial liability by several million dollars. In another case, DCPS submitted for review a contract extension for the rental of vans to transport special education students. Immediate approval was requested since this contract was needed to comply with a court order. In yet another example, DCPS submitted a contract for a tutoring services provider on September 30, 1996, the end of the fiscal year, and wanted approval that same day in order not to disrupt the provision of services. Such last minute procurement efforts make it difficult for DCPS to ensure that contractors will provide quality goods or services at the lowest rates. Furthermore, it typifies an organization that does not have a long-term planning process to ensure that all required services will be delivered without disruption.

  • Lack of performance measures makes it difficult to determine efficiency rates

    The lack of performance measures within the procurement Office makes it impossible to measure its efficiency rates. No data exists about the percentage of error-free contracts, cycle times to bring a contract to completion, contractor compliance rates, or average procurement costs.

  • Mismanagement permeates DCPS' procurement function
The following examples of mismanagement further illustrate the poor quality of the DCPS procurement function.

Food services contracting. The Authority rejected DCPS' proposed food services privatization contract on August 9, 1996. The contract was rejected because the procurement process used was neither normal, fair, nor efficient. In the Authority' s view, the regular process was circumvented in order to expedite the contract's award. Controls did not exist in the contract to cap costs for DCPS. In fact, the costs may have been fixed at amounts greater than it would have cost DCPS to provide those services internally. The DCPS Food Services Branch estimated that providing food services would cost $ 17.4 million; however, DCPS decided to contract out this service for $21 million. In summary, DCPS ignored standard practices in order to expedite the award of a contract that did not contain a dollar limit, potentially costing DCPS millions of dollars in unforeseen financial liability.

"My concern with the food service contract was why only three board members, including myself, thought fit to. . .get every conceivable question answered." -- Karen Shook, School Board President
The poor quality of contract administration in the food service area is also affecting the ability of other offices to perform their missions effectively. In one case, the food services director levied fines totaling almost $91,000 against a food vendor. However, the contract administrator in the Procurement Office failed to notify the vendor of these contract violations and the resulting fines. As a result, the vendor is liable for significantly less than the total sum of the fines.

Facilities maintenance contracting. DCPS currently has a custodial services contract, including several amendments, with a janitorial services provider. The initial consulting contract turned into a $5 million contract for cleaning services and basic repair (termed "Level 1 maintenance") that the company has held since 1993. The second amendment, effective October 1, 1996, expanded the company's responsibilities, at an additional cost of $8.6 million, to include Level 2 maintenance which includes plumbing, carpentry, equipment repair, electrical and mechanical work, masonry, roofing, and other services. The contract gave the janitorial company responsibility for the bulk of services provided by DCPS' Division of Facilities Management. A more detailed description of facilities maintenance contracting follows.

In 1992, when the service provider won a competitive bid to study and develop a comprehensive plan to improve DCPS' custodial and maintenance operations, the contract was worth $ 105,100. The Request for Proposal (RFP) indicated that a prime purpose was to evaluate the "Offeror's ability to conduct a guaranteed performancebased program that will provide for improved management of custodial services, and a significant enhancement of the quality of the school building environment." Impressed by the company's study, DCPS then negotiated an amendment to have the provider plan and manage Level 1 maintenance. The maintenance workers remained DCPS employees. This multi-million dollar contract was executed without any competition.

Last May, DCPS proposed expanding the contractor's role in repair by contracting out all Level 2 maintenance. Under this contract, the entire Level 2 function would be contracted out and the approximately 250 DCPS Level 2 maintenance employees began working for the company. The annual cost of the amended contract was $8.6 million. Again, this contract was not bid competitively.

In July, the Authority agreed to allow the Level 2 amendment to be executed. DCPS officials had argued that the amendment was needed to assist with fire code violations. The Authority conditioned the approval on the fact that DCPS must, as soon as possible, prepare and send out a RFP for competitive bids on the provision of Level 1 and 2 maintenance of DCPS facilities. Contrary to the agreement, more than three months later, DCPS has yet to advertise the RFP.

Effective October 1, 1996, Public Law 104-208 provisions gave the Authority control over DCPS' operational funds for maintenance and capital funds. The Level 2 contract comprises most of the operational funds. The Authority enlisted the support of the GSA to review the Level 2 contract.

Special education services contracting. Another contract that raises serious concerns about DCPS' ability to manage its procurement functions is the Kedar School contract which allowed an unqualified individual to operate an $875,000 special education program. At no time did the procurement office raise any questions about the responsibility and responsiveness of the bidder to adequately provide those services.

In 1995, DCPS awarded contracts to several vendors to provide special education services to the school system. One of the awards was an $875,000 contract to operate a school for severely emotionally disturbed students. The contractor had no qualifications to operate such a school. Almost from the start, the school had problems -- with few qualified staff, scarce materials, and only a handful of the proposed 30 students. Over the course of the year, the Kedar School, as the program was known, failed to provide adequate staff, teaching supplies and textbooks, and school lunches to these students.

"I would imagine that, for this contract, the persons who recommended it and were with my staff who work with special education didn't do the background check on that individual They were very much familiar with the people who had the resumes attached who were going to provide the service in our school system . . . Background check, again, probably should have been done, but I doubt seriously, based on what I 'm now reading and I still don 't know for a fact what I am now reading -- probably was not done for that one individual." -- Franklin L. Smith, Superintendent
Textbook contracting. DCPS' poor procurement processes have also hampered one of the most basic school procurements -- textbooks. In past years, textbooks have not arrived at the various schools before the beginning of the academic year. This year, a school readiness survey conducted by an independent auditor found that twelve percent of the school classrooms observed in September 1996 did not have the required textbooks. Significant differences appeared to exist between schools with respect to the availability of textbooks. While some schools appeared to have the textbooks required to begin instruction, others were poorly prepared. These differences occurred regardless of whether the schools' students had been relocated to another building during the first days of the school year due to fire code violations.

DCPS performs little analysis to determine how many textbooks will be needed from a particular publisher. In fact, textbook contracts have been executed for as little as $200 and then are expanded through modifications to over $ 1 million. Furthermore, procurement officials typically do not have the latest price lists, rendering accurate estimates impossible even if the number of textbooks are projected correctly.

In addition, textbook purchasing is further complicated because textbooks are ordered centrally, but received locally. Thus, DCPS officials frequently cannot determine how many textbooks have been ordered and delivered, or how much money has been expended.

"Unfortunately, in our system, we are operating with a process that requires more emergencies than anything I have ever seen." --Franklin Smith, Superintendent

Planning and Implementation

The failure to adequately plan is the most significant trend running through DCPS' management problems.

  • In the educational area there may be overall plans; however, no one is held accountable for their implementation

    For example, in special education, DCPS is required to submit a three-year plan according to a U.S. Department of Education (DEd) requirement. DEd rejected the latest plan submitted earlier this year, calling it inadequate. Several conditions were placed on DCPS before the DEd agreed to fund its special education plan.

    In another example, the District's failure to adequately plan and implement a math and science program was a key reason that the National Science Foundation (NSF) rescinded a $13.5 million mathematics and science grant awarded to DCPS last year. NSF revoked the grant not because the funds were misspent, but simply because DCPS was unable to properly implement the program it had promised to create in its application for the grant.

  • Few strategic plans exist in the management area

    Although the School Board president and the Superintendent continue to admit that many DCPS management functions are beset with problems, neither the Superintendent nor the Board have developed plans to address these issues. There is no overall plan or strategy as to how each operational unit (facilities maintenance, personnel, budget and finance, transportation, and procurement) contributes to the educational mission of the school system, what their goals are, what level of quality services they should be providing, or how they add value to the operations of the public schools.

    In facilities maintenance, while capital assessments exist, there is no strategic facilities improvement plan as discussed earlier in this report. As a result. DCPS wastes significant sums of money repairing facilities that probably should be closed rather than redirecting funds to other sites. In personnel, the lack of a staffing plan prevents DCPS from efficiently hiring personnel prior to the start of the school year. Year after year, DCPS waits to hire teachers, custodians, and other personnel one month into the school year when funds are finally available to pay them. Most recently, the lack of a strategic staffing plan, in conjunction with the previous year's reduction-in-force (RIF), has created a situation where educational staff believe the RIF was discriminatory, biased, unethical, unprofessional, and vindictive in nature. A strategic plan can be useful to DCPS in acting as a guide to setting goals, measuring performance, and planning staff needs.

    The lack of planning in DCPS also is clearly evident in the procurement office. The procurement office does not engage in any type of planning that could potentially reduce its workload or improve the quality of its services. Because DCPS has little purchasing foresight, it operates in a mode of constant crisis. The lack of planning and the subsequent procurement actions most likely cost DCPS more money than if these services had been competitively bid.

    These examples of poor planning and implementation illustrate some of the management problems plaguing the District's public schools. Even in the formulation of a guiding vision and implementation plan, there is a clear inability to deliver upon the promises made to students. The Chamberlain students that may experience delays in receiving their degrees and licenses (as described earlier in this report) as a result of DCPS' poor planning and implementation are only one group of individuals that had to suffer as a result of the DCPS' leadership's inability to create and implement a guiding plan in every major functional unit.

Information and Documentation

Poor planning and implementation, as well as mismanagement of daily operations in the school system, are due in part to poor data upon which to base policy and management decisions. Within DCPS, three kinds of data problems exist:

  • Data may exist, but is difficult to obtain

    This condition is a result of constant restructuring. The school system has reorganized itself in each of the past five years. The constant reorganization blurs the relationship between the organizational units from year to year. It becomes difficult for anyone, inside or outside the system, to gain a clear understanding of spending within a particular RC or Agency Reporting Category21 from year to year. This increases the difficulty of tracking actual spending for a given function on a comparative basis. Furthermore, it makes the budget less useful as a planning tool, since making year-to-year comparisons becomes impossible. The lack of useable data in the financial area is not unique to the system. DCPS restructures constantly, engaging in what the City Administrator calls "bureaucratic subterfuge."22

  • Data exists but is often conflicting, thus lacking credibility
  • DCPS provides conflicting information about how the school system operates. Organizationally, there is a lack of reliable data coming from DCPS. For example, data indicates that some schools that are closed still have teachers and students assigned to them. A closer inspection of the food services expenditures leads to a conclusion that food services did not actually cost $25 million as was stated in a previous year. In addition, the $21 million proposed food services outsourcing contract was overstating the true cost of providing food services. Personnel figures, FTE calculations, budgetary numbers, and student enrollment and facilities assessments -- many of the major areas reviewed in this report -- contain the most inconsistent data. This creates a problem for individuals and organizations attempting to analyze DCPS' expenditures, budgetary priorities, and spending needs for any given year.

    One of the most serious data problems is the lack of credible information on the number of students. DCPS does not have an accurate count of its students. Estimates vary between 72,000 and 81,000. The 1990 federal census estimated that 72,810 students attended District schools, yet DCPS' Student Information Management System (SIMS) has 80,978 student records. Although a 1995 sample student enrollment count authorized by the Superintendent identified 80,450 students, its usefulness for validating enrollment was "limited because of mistakes made in selecting the sample" according to a 1995 GAO letter report. GAO estimated that SIMS may contain approximately 5,000 obsolete or duplicative student records.

    Despite significant declines in the population of the District over the last five years, DCPS reports that there are still approximately 80,000 students in the system. Demographers and other experts have questioned the accuracy of these counts. The number of students is obviously one of the most critical factors in assessing staffing, facilities, supplies, and textbook needs, as well as budgetary priorities and other functions of DCPS.

    The end result is a lack of credibility in the information provided by the school system in terms of what they have accomplished, what type of resources they need, and what can be expected in the future.

  • Data does not exist

    The final data problem is simply a lack of data. When asked for historical data, DCPS is unable to provide a great deal of detailed data going back more than five years. The data systems within DCPS are not capable of providing the level of detail that researchers, analysts, and other experts would expect if they were doing a historical analysis of DCPS. Furthermore, in the areas of performance measures, activity based costing,23 or cycle time, data simply does not exist. Thus, it becomes difficult to establish criteria upon which to gauge performance improvements in DCPS.

    The combination of these data problems makes sound planning and policy decisions difficult, if not impossible. The data problems all suggest that the system is unable to measure its performance against either baselines or benchmarks, internally or externally, and therefore cannot undertake continuous improvements in their processes, either incrementally or through radical change. The challenge then becomes recreating transactions and systems in order to be able to understand what DCPS has done in the past, rather than using quality data to plan for the future.

Impact on Educational Quality and Services

Collectively, these management failures establish the DCPS central administration as an organization with little managerial competence. Site visits to 20 schools in September 1996 found many shortcomings in regard to the readiness of the schools to open.24 Figure 15 is a result of the findings.
Figure 15: Percentage of Classrooms Reporting Materials Unavailable
Item Percentage unavailable
Textbooks 12
Instructional Supplies 20
Teachers' Supplies 12
Office Supplies 17
Instructional Equipment 11
Source: KPMG Peat Marwick LLP, September 10, 1996
Note: Significant differences existed from school to school

The management failures of the support functions of DCPS are evident in the number of classrooms and schools not ready on September 3, 1996 for the start of the 1996-97 school year. While individuals familiar with DCPS might not be surprised at these results, and perhaps expected even more classes not to be ready for the start of school, the expectation should be 100 percent readiness. Not having textbooks, supplies, and equipment necessary for the educational process to begin is inexcusable. For the Board of Education and the Superintendent to allow this situation to even arise, let alone persist, is unpardonable. As the report states, "The best prepared schools perceived themselves (not DCPS' central office) to be responsible for both placing and following up with vendors on textbook order status."25 The current condition of educators not trusting central administrators is a result of the support services' inability to meet the needs of students, teachers, and principals.

Impact on Students

All of these operational and systemic failures within DCPS hurt the students more than any other group in the educational process. The failures result in an unsafe educational environment that is detrimental to learning. Furthermore, the learning process is hampered by a lack of basic educational materials. It is difficult for students to learn under conditions when textbooks, supplies, facilities, and food services are inadequate and safety and violence concerns distract students' thoughts from learning.

At the same time, it appears that the school system has lost sight of its educational mission. The constant reorganizations have not improved the quality of education in the District. In fact, they may have impeded the educational process by requiring employees to learn new organizational relationships. Unfortunately, the confusing and contradictory data prevents closer scrutiny of the educational system. As noted, the actions of the school system suggest that it is interested only in alleviating the current crisis rather than engaging in any constructive long-term planning. The crisis framework in which DCPS operates creates tension, anxiety, and an "under siege" mentality that prevents it from addressing systemic problems.

Parents, teachers, educators, and the community all lose as the system continues to degenerate. However, it is the children -- our children -- that lose the most as a result of the District's substandard educational service delivery system. Many leave the District's public schools disappointed, disenchanted, confused, even angry at what they have had to endure in their schools and classrooms. We, as parents, educators, policymakers and concerned citizens, have made a promise to them that we will provide a first class education. We can still keep that promise. The District must make education reform its highest priority if it is to save itself. More importantly, however, we must act to improve education to save our children.

Our children's futures depend on it.

Continue on to Part 3 of this report.

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