For Immediate Release: March 2, 2000

San Francisco, CA – Two audits and a Department of Justice investigation into possible criminal conduct reveal that the California Department of Education (CDE) is failing to ensure that billions in education funds are spent on student achievement rather than being wasted on fraud, abuse, and political payoffs. The details appear in "On No Account: The Accountability Crisis in California Education," a new briefing by the Center for School Reform of the Pacific Research Institute for Public Policy (PRI).

"The California State Auditor found that performance measures were virtually nonexistent during its review of the CDE’s overall monitoring process. That’s unacceptable in an agency that is responsible for the state’s nearly six million children," assert K. Lloyd Billingsley and Thomas Dawson, authors of the briefing. "The CDE crisis is grave enough that the U.S. Department of Justice is investigating the agency for possible criminal and civil violations."

The Auditor found that many of the organizations receiving federal funding, through the CDE, for child nutrition, child development, and adult education money had not been reviewed to see how they were spending their designated funds. When the CDE did review the organizations, many of them could not account for how the money was spent. Rather than penalizing the organizations for mismanagement, the CDE, under State Superintendent of Public Instruction Delaine Eastin, fired, demoted, and transferred those who had brought the misconduct to light.

"If corrective action is not taken and deep reforms not made, the accountability crisis will worsen, diminishing the prospects for the state’s students, already among the lowest achievers in the nation," conclude Billingsley and Dawson.

Billingsley and Dawson agree with the California State Auditor that the CDE needs to:

 

• Restore the jobs of those whom the leadership fired or demoted for calling attention to the fraud.
• Identify and take action against those who transferred money to ineligible recipients.
• Perform analysis of the risk in distributing funds.
• Schedule start and completion dates for monitoring activities.
• Comply with auditing schedules set forth by the federal government.
• Make on-site visits to groups receiving both federal and state money.
• Establish a central database to track the status and results of audits.
• Borrow personnel from the Department of Finance and use more overtime hours to complete monitoring assignments.
• Improve the funding model, making it necessary for organizations receiving money to demonstrate student gains, monitor benchmarks such as attendance rates, and submit audit reports.

Billingsley and Dawson challenge legislators to use the crisis to launch deeper reforms. "Expanding school choice, deregulation, and local control in California would make massive misconduct less likely and improve student achievement."

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For a copy of the "On No Account: The Accountability Crisis in California Education," contact Laura Dykes by phone at 415.989.0833 x113, by fax at 415.989.2411, or by e-mail at ldykes@pacificresearch.org, or visit PRI’s web site at http://www.pacificresearch.org.

The Pacific Research Institute for Public Policy is a non-profit organization dedicated to the promotion of the principles of individual freedom and personal responsibility. The Institute believes these principles are best encouraged through policies that emphasize a free economy, private initiative, and limited government. By focusing on public policy issues such as health care, welfare, education, and the environment, the Institute strives to foster a better understanding of the principles of a free society among leaders in government, academia, the media, and the business community.