Found this gem while researching the $100 million that Zuckerberg gave the Newark School System: Chicago School Problem
An employee of a small Chicago education-focused newsmagazine was reviewing the transcripts of the Chicago School Board meeting. She found the School Board had voted to approve a $20.5 million no-bid contract. She knew no-bid contracts were rare and investigated further. When it turned out the head of the school board that approved the contract was a former consultant to the company that got the contract, she dug deeper.
The reporter found the contract was for a consulting firm to conduct professional training for Chicago school system principals. Attendance at the training was mandatory. Almost immediately, the principals complained they were frustrated with the training and it was ineffective. Attendance was not good even though it was mandatory.
Long story short, the school board member was eventually named in a 23 count indictment. It was determined that she accepted a $2 million kickback, trust accounts for her grandsons and the promise of a job when she left the Chicago school system. She had also been under investigation for a similar $40 million contract with the Detroit school system, but was never charged.
At the time this contract was awarded, the Chicago school system was and still is, in dire straits. Currently the system is facing huge budget deficits resulting in cuts, massive teacher layoffs and the possibility of closing up to 50 schools.
How does this stuff happen? It seems to be a combination of two things: dishonest, greedy people in high places and lack of transparency. Why does a person who is being paid $250,000 a year feel the need to steal $2 million from the financially strapped organization that employees her? Of course this theft could only take place because of lack of transparency. No-bid contracts can be hidden from the public deep in the minutes of school board meetings. Unfortunately for this school board member, someone read the minutes that knew what to look for.
How do we keep this stuff from happening? I proposed in The Disaster That is the IRS that the Income Tax be replaced with the Fair Tax and the IRS be done away with. The employees of the IRS would become auditors and audit EVERY Federal government budget and post the findings on the internet for all to see. Budget managers wouldn’t be able to spend a million dollars on a training session held in a lavish Las Vegas hotel without the public knowing about it.
State and local governments may not be able to afford a stand-alone auditing department but posting budgets on the internet would serve the same purpose as long as the budgets had sufficient detail. Local investigative reporters will do the rest. If local taxpayers knew the top fifty school system employees received take-home vehicles with gas credit cards, they may be a little more vocal when the next tax increase to support the school system is requested.
It’s well known in the Federal system that if you don’t spend all of the money you are given, your budget will be reduced the following year. Instead of giving huge bonuses to managers that spend all of the money they are allocated, shouldn’t we give them a bonus for returning unused assets?
As long as bureaucrats can hide what they are doing from taxpayers, it will continue to happen at our expense. This one person was brought to justice. But the money wasted on the useless training was not recovered. And taxpayers will foot the bill for her seven and a half years of incarceration.
Link to a good article on how reporters dug into the Dallas Independent School District budget and uncovered spending abuses: Reporters Dig Into DISD Spending