No. 28
September 7, 1999
By Thomas Dawson*

California’s pervasive education woes are the subject of much discussion. Ongoing investigations suggest they may be traced to weak, irresponsible, and politicized leadership.

A recent report conducted by the State Auditor found that the California Department of Education (CDE) has diverted millions of state and federal dollars to various "community based organizations" (CBOs) in southern California. The money was supposed to be used for English and citizenship classes but no one, including the CDE, knows how the money was spent.

The problem captured the attention of federal authorities in 1996, when one of the CBOs, Hermandad Mexicana Nacional, was implicated in voter fraud following the defeat of Republican Congressman Bob Dornan. The federal Department of Education and the FBI are currently investigating ten similar organizations.

When Assistant Superintendent Robert Cervantes complained that the department was doing a poor job of tracking the money, he was promptly demoted for reasons unrelated to the incident, according to State Superintendent Delaine Eastin. One of his fellow investigators also received a reprimand from the State Controller’s office, even though the State Auditor’s review of the CDE’s adult education programs found a long trail of abuse.

The report claims that "as a result of ineffective monitoring practices, the department has paid CBOs for services that they cannot substantiate." In total, the legislature earmarked $35.6 million in federal education funds for adult immigrants between 1994 and 1998. The CDE in return awarded 49 percent of these funds to CBOs.

The State Auditor’s report found that eight CBOs visited were unable to document the hours of instruction for which they received federal funding. Several CBOs lacked both summary documents and daily attendance records for certain periods, as required by law. Records for one CBO show students attended class on Labor Day, Thanksgiving, Christmas, and New Year’s Day. One student in this particular CBO apparently was in class for 3,406 hours, equivalent to nine hours each day of the year.

Despite the obvious and massive fraud, the state Department of Education maintains it only found irregularities in two CBOs. Even in these instances, however, the report finds "the department did not follow up adequately or its reviews came too late to rectify noncompliance."

The Department defends itself by crediting the CBOs for good intentions and saying that certain legislators "strongly encouraged [the department] to support the CBOs in their efforts to provide federally-funded education services." Defenders also charge that the Department of Finance forced the Department of Education to allocate funding in this manner. The Department also claims that the State Auditor was remiss in only reviewing CBOs that served a disproportionate number of Hispanics. On the other hand, 80 percent of the students served by CBOs are Hispanic.

In short, anyone but the California Department of Education was to blame. Both insiders at the Department and those still investigating the CBOs regard the response as a joke, the equivalent of social promotion.

The Department has assured the public that it has taken steps to ensure the funding process is more accountable. But it has failed to recover any of the more than $4 million from Hermandad Mexicana Nacional. And according to investigators, when some of the smaller CBOs owned up to the problem and tried to give money back, the Department refused to accept it. The scandal remains a huge embarrassment but has at least resolved some ongoing questions.

While Superintendent Eastin criticizes many innovative charter schools and proposals for educational choice as irresponsible, her Department is unable to perform basic tasks. A Department that cannot ensure that taxpayers’ dollars are properly spent, and which punishes those who uncover massive misconduct, can hardly be relied on to accomplish the more difficult task of educating the state’s children.

Governor Davis, who has made education reform a priority, has been silent on the funding scandal. So has his education secretary, Gary Hart. Perhaps the time has come for the pair to speak out and make some changes.

* Thomas Dawson is a public policy fellow of the Center for School Reform at the California-based Pacific Research Institute. For additional information, contact Thomas Dawson at (916) 448-1926.