Detroit School Woes Deepen

[Bono]

http://online.wsj.com/article/SB125012223083427629.html

Detroit School Woes Deepen
By ALEX P. KELLOGG

DETROIT -- Five employees of the Detroit public school system were charged Wednesday with multiple felonies as part of an investigation into alleged corruption and the loss of tens of millions of dollars in school funds.

The charges come as the Detroit Public Schools is struggling with an estimated budget deficit of $259 million and weighing a potential bankruptcy filing.

Kym Worthy, the prosecutor for Wayne County, announced the charges Wednesday. If convicted, the accused could face decades of jail time because Michigan law allows harsh penalties for public officials found guilty of wrongdoing.

The allegations include eight felony embezzlement charges against a district administrative staffer and a high-school teacher's aide who together allegedly embezzled more than $50,000. Another clerical worker at an elementary school was charged with writing checks and withdrawing roughly $25,000 of the district's money. The smallest alleged crime was related to a food-services employee accused of stealing more than $400 of lunch money at another elementary school.

The losses alleged in the charges represent only a fraction of the improper expenses uncovered since the state sent an emergency financial manager, Robert Bobb, to straighten out the city's ailing school system.

A probe launched by Mr. Bobb uncovered paychecks going to 257 "ghost" employees who have yet to be accounted for. He said that approximately 500 illegal health-care dependents he uncovered have cost the district millions. A separate Federal Bureau of Investigation probe in May led to the indictment of a former payroll manager and another former employee on charges of bilking the district out of about $400,000 over four years.

"We can not allow people to use DPS as their personal welfare system," said Keith R. Johnson, president of the Detroit Federation of Teachers, which represents 7,700 teachers and is currently negotiating a new contract with the district. But he also said there has been a "tendency to over-dramatize the level of corruption and the financial impact."

Mr. Bobb is expected to decide this month if the school system will seek protection under Chapter 9 of the bankruptcy code, which, though rarely used, allows public entities like utilities, cities and counties to restructure debt and even tear up contracts.

A filing would be unprecedented: No other large school district in the country has ever gone through with bankruptcy proceedings.

Earlier this year two icons of Detroit, General Motors Co. and Chrysler Group LLC, went through Chapter 11 bankruptcy organizations.

Mr. Bobb, who was been running the district since March, faced scrutiny himself this week when it came to light that he has awarded a no-bid contract worth nearly $1 million to a firm he used to work for. He has said he informed Michigan Gov. Jennifer Granholm that he planned to offer the contract to his former firm, Public Financial Management Inc., based in Philadelphia.

A spokesman for Mr. Bobb didn't return several calls for comment Wednesday.

In an effort to narrow its budget deficit, the district plans to close 29 schools, allow private companies to take over 17 of the districts 22 high schools and lay off more than 2,500 of its 13,000 employees.

Plagued by poor test scores and occasionally by violence -- including multiple shootings near the locations of the district's biggest-ever summer-school program this year -- the district has lost about half its students since 2001. Partly due to attrition, the district only graduates around one in four students who enroll in ninth grade, according to some estimates.

Write to Alex P. Kellogg at alex.kellogg@wsj.com

[dead0man]

Stealing money from poor kids with little/no hope?  Wow, that's low. 

I wonder who they voted for.

[Queen Mum Inks.LWC]

Doesn't surprise me at all.

[Torie]

I thought this school district had been taken over by the state.  So much of Detroit has reverted to empty space, maybe it should be made some kind of habitat reserve. If you don't believe me, do an aerial photo google of Detroit. You will see waste swaths that are near empty with maybe one or two houses of zero in a block.  The rest have been torn down as safety hazards.

[Queen Mum Inks.LWC]

I thought this school district had been taken over by the state.  So much of Detroit has reverted to empty space, maybe it should be made some kind of habitat reserve. If you don't believe me, do an aerial photo google of Detroit. You will see waste swaths that are near empty with maybe one or two houses of zero in a block.  The rest have been torn down as safety hazards.

No - they (meaning the State I think - but I'm not sure exactly who) put in a new guy in charge of DPS, but DPS is still running the show, but as always, people complain about him too, just like the last person who was head of DPS.

[Ban my account ffs!]

They should file for bankruptcy, lay off all of their employees and rehire them based on qualifications and experience, but eliminate the 2500 positions.

Close older schools in areas with lower enrollment.

In a big city like that, it's also probably better to focus on having smaller elementary and middle schools.  By keeping the middle schools smaller, you're giving teachers a chance to get to know the students better. 

As far as privatizing the high schools... I don't think it will really work.  The vast majority of cases where private companies have taken over schools has not saved money at all, and in fact has caused the companies to take a loss every time.

Otherwise they could split the district up into several smaller districts and give some level of autonomy to each individual school operating on a K-8, 9-12 model.  Make each district around 10,000-15,000 students.

[Queen Mum Inks.LWC]

They should file for bankruptcy, lay off all of their employees and rehire them based on qualifications and experience, but eliminate the 2500 positions.

I don't think you really understand the fight that the union would put up against that.  And the board is too corrupt to do that - there's too many union ties and too much money involved.

I honestly don't think Detroiters can fix the Detroit school system - every year there's another story about more corrupt people in the DPS system.  And whenever they bring in an outsider, they're criticized so much.  It's a mess.

[Ban my account ffs!]

They should file for bankruptcy, lay off all of their employees and rehire them based on qualifications and experience, but eliminate the 2500 positions.

I don't think you really understand the fight that the union would put up against that.  And the board is too corrupt to do that - there's too many union ties and too much money involved.

I honestly don't think Detroiters can fix the Detroit school system - every year there's another story about more corrupt people in the DPS system.  And whenever they bring in an outsider, they're criticized so much.  It's a mess.

Well, people will continue to send their kids to charter schools and private schools and new charter schools will open up until there aren't any students left in DPS. 

Besides, it says in the article that if they file for bankruptcy, they'd be able to terminate contracts.

I'm a big supporter of unions... but when it comes to kids' education, I think quality of education is more important than union happiness.  There are simply too many teachers and not enough students.. something has to give.

[Queen Mum Inks.LWC]

They should file for bankruptcy, lay off all of their employees and rehire them based on qualifications and experience, but eliminate the 2500 positions.

I don't think you really understand the fight that the union would put up against that.  And the board is too corrupt to do that - there's too many union ties and too much money involved.

I honestly don't think Detroiters can fix the Detroit school system - every year there's another story about more corrupt people in the DPS system.  And whenever they bring in an outsider, they're criticized so much.  It's a mess.

Well, people will continue to send their kids to charter schools and private schools and new charter schools will open up until there aren't any students left in DPS. 

Besides, it says in the article that if they file for bankruptcy, they'd be able to terminate contracts.

I'm a big supporter of unions... but when it comes to kids' education, I think quality of education is more important than union happiness.  There are simply too many teachers and not enough students.. something has to give.

Yes, they'd be able to, but I don't think you realize the incredible amount of bad blood that would be left over from that.  My point is that it's easier said than done.