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CORRUPTION CPS: How the Board wasted more than a billion dollars -- and proved once again that the 'deficit' is a lie... Chicago schools vendor spending has gone wild -- a 122% Increase since 2004... so now the missing $1.4 billion budget deficit found...

In a page out of "Bizarro World", where everything is opposite of what it seems, Substance News research into Chicago Public Schools vendor spending has uncovered 1.4 billion dollars of increased spending. During the recent corporate media dust up over an FBI investigation of Chicago Schools CEO Barbara Byrd Bennetts no-bid $20 million contract to SUPES, a company she has direct ties to, it became apparent that there needed to be a history check on CPS spending and public statements of the need for austerity.

Just because the Sun-Times headlines scream doesn't mean they are true, accurate, or honest. The Chicago Board of Education has been creating phony "deficits" in its annual budget projections for at least 23 years by overestimating expenses and underestimating revenues. The Chicago Board is not even required to present its proposed budget for the 2015 - 2016 school year (FY 2016) until June, when it is also required to hold three public hearings. The screaming from both the state's reactionary governor and the city's more reactionary tabloid newspaper at both, as of April 2015, bullshit. But if they can combine to create hysteria over a phony "crisis," they may still get away with their attack on Chicago teachers' pensions and the contract of the Chicago Teachers Union.In light of the assertions that the Board of Education of Chicago is claiming a billion dollar (plus) "deficit" and the newly elected reactionary Republican Governor Bruce Rauner is declaring that Chicago schools should declare "bankruptcy", it was curious to see how Chicago schools was actually spending money on outside vendors. Vendors means everything extra outside of paying staff to teach kids. And a closer look at the vendor situation shows that during the past four years, spending on vendors has exploded, while spending on teachers and other staff has actually gone down!

With the long history of corruption and prison sentences for Chicago politicians over the years there have been many laws passed to make public spending "transparent" to the taxpayers, not that it seems to be slowing down any sticky fingers or golden gooses.

So what has been happening to Chicago's massive (between $5 billion and $6 billion) school budget. For a decade, the Board of Education has been spending less and less on the people who do the teaching and other work in the schools -- and more and more on outside vendors that, like the SUPES "Academy", get little or no scrutiny once the contracts are given away.

And, the problem has gotten worse since Rahm Emanuel was sworn in as mayor in May 2011 and appointed the seven members of the Board of Education that approved the hiring of Barbara Byrd Bennett and dozens of her cronies to top executive positions. During those same four years, the Board has also been increasing even more the spending on outside "vendors." To note just the dramatic example that's been in the headlines in April 2015 -- at the June 26, 2013 meeting of the Board of Education, there were 52 "Purchasing" items on the agenda (all of which were approved by the Board in a quickie vote without discussion or debate). The SUPES scam was number 51. In other words, it was buried in the Board's 300 page public agenda that day.

One such ordnance (2-156-475) in Chicago mandates that public school vendor spending is published for everyone to see. Interestingly it is difficult to navigate to this area directly for a website but there is a way to get to the information through a backdoor search method. Going through each years list of vendor spending and manually copy and paste into excel spreadsheets for tabulation and comparison that information was condensed into one table.

Suppliers Doing Business with Chicago Public Schools.

This information is being provided in compliance with the city ordinance number 2-156-475

Year Total CPS payment to vendors

Difference year to year

% yearly increase

2004

$1,149,718,824.00

2005

$1,316,394,784.00

$166,675,960.00

14.50%

2006

$1,470,137,627.00

$153,742,843.00

11.68%

2007

$1,519,942,966.00

$49,805,339.00

3.39%

2008

$1,722,517,499.00

$202,574,533.00

13.33%

2009

$2,034,022,943.00

$311,505,444.00

18.08%

2010

$2,201,650,678.00

$167,627,735.00

8.24%

2011

$2,198,301,411.00

($3,349,267.00)

-0.15%

2012

$2,378,648,052.00

$180,346,641.00

8.20%

2013

$2,404,985,347.00

$26,337,295.00

1.11%

2014

$2,546,677,086.00

$141,691,739.00

5.89%

Note. Data compiled from Chicago Public Schools Department of Procurement http://csc.cps.k12.il.us/purchasing/default.html

From the figures gathered over a ten-year period it appears rather cutting spending Chicago Public schools has increased spending on outside vendors by a total of $1,396,958,262 in ten years. Calculating the percentage increase of spending over that same period (2004 to 2014) comes out to be an astonishing 121.50%.

What is shocking is the veracity of the attacks on the Chicago Teachers Union. We are hearing the continuous cry of "deficits!" and need for austerity. But in fact what is clear is that in ten years the Chicago schools have increased spending tenfold to private vendors rather than invest that money into more teachers, staff, or making available a library in every school, a nurse in every school or a social worker in every school in Chicago. Instead the public schools have decided that lining the pockets of private business is more import than serving the children of Chicago to the tune of $1.4 billion! The SUPES Academy privatization of principal training is just, as the cliche goes, the "tip of the iceberg."

These are the years of austerity and privatization lead by now US Secretary of Education Arne Duncan. Who incidentally is now promoting the same austerity and privation scheme under the Obama Presidency across the entire United States.

Here are the direct links to each data page used for the calculations in this report:

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2004.xml

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2005.xml

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2006.xml

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2007.xml

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2008.xml

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2009.xml

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2010.xml

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2011.xml

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2012.xml

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2013.xml

http://www.csc.cps.k12.il.us/purchasing/supplier_report_2014.xml

Governmental Ethics Ordinance Chapter 2-156 (Prior Code 26.2) of the Municipal Code of Chicago

2-156-475. Access to List of Current Contractors. (a) No later than March 1, 1998, the Department of Business and Information Services shall compile a list of all current contractors and former contractors, who had business during the preceding four reporting years as set forth in Section 2-164-040 of this code, of the City, Chicago Transit Authority, Board of Education/Chicago School Reform Board of Trustees, Chicago Park District, Chicago City Colleges and the Metropolitan Pier and Exposition Authority. The list shall be updated on a monthly basis. The list shall be made available to all aldermen by way of computer network. The list shall be made available to other officials and employees, and to the public, by: (1) the provision of a computer terminal that is placed in a readily accessible location; and (2) the provision of a telephone number which such persons may call with inquiries. (b) There shall be a presumption that any person who reasonably relies on the aforementioned list to comply with chapters 2-156 and 2-164 of the Municipal Code is not in violation of those chapters if the purported violation is related to the identity of any contractor.

References

"Gov. Rauner 'afraid' CPS Is Heading toward Bankruptcy - Chicago." Chicago Sun-Times. Web. 14 Apr. 2015.

"Emanuel Scoffs at Rauner Suggestion That CPS Declare Bankruptcy."Chicagotribune.com. 15 Apr. 2015.

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Comments:

April 20, 2015 at 7:48 AM

By: Kim Scipes

Board spending on vendors

Congratulations to John Kugler for an excellent piece of research and writing! It is this kind of careful reporting that keeps Substance's work among the forefront of reporting on pro-union public education efforts. Thank you!

April 21, 2015 at 9:36 AM

By: Rod Estvan

How does vendor payments make te deficit not real?

Dr. Kiugler's depiction of vendor expenditures is as he well knows only part of the fiscal woes of CPS, including swap deals, debt owed to pensions, the lowest property tax rate in Cook County, and more. The projected deficit was real enough for ISBE at its last meeting to award CPS a disproportionate percentage of the $97 million dollar fund to help school districts that were in fiscal distress. To see their report go to http://www.isbe.net/board/meetings/2015/april/packet1.pdf the relevant section begins on page 5.

Rod Estvan

April 21, 2015 at 6:28 PM

By: John Kugler

No Accident

Strange how vendor spending has increased by one billion dollars and we have a billion dollar deficit. I am not a rocket scientist but these figures seem to have a causal effect on the financial projections and media messaging of reactionary and neo-liberal politicians. I will be writing up a story on how this is not an accident but planned years ago. In one respect we let this happen and hopefully we can organize better to stop this train from going off the cliffs edge.

April 23, 2015 at 11:50 AM

By: Maureen Cullinan

Board overspending on charters, testing

Great work. During the CTU strike, a group of teachers and parents sat down with Maloney and Cunningham and made clear that they knew CPS was overspending on charters and testing, while blaming deficits entirely on the union. They said that attempts to weaken the union and dictate corporate ''reforms' would eliminate a good career path for their children. But it doesn't seem to have made much of a difference.

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