Comptroller Stringer Releases Agency Watch List Report: Department of Education

To ensure spending gets results, Stringer calls for increased transparency at DOE

Agency Watch List report to be released quarterly on City agencies that raise the most budgetary concerns

   As the New York City Council Committees on Education and Finance hold a hearing on the Executive Budget for Fiscal Year 2019, Comptroller Stringer released the first “Agency Watch List” report on the City’s spending at the Department of Education (DOE), calling for greater transparency from the agency on its spending and results.

The Comptroller’s report finds that while agency spending has risen rapidly in the last few years, the availability of data to monitor progress in achieving the goals set out by the Administration, and oversight of the agency’s several billion dollar procurement budget – which Comptroller Stringer has audited for waste and mismanagement – are insufficient for real accountability.

Such a massive agency, which educates over 1 million New York City children and will spend more than $25 billion this year, requires a particular level of oversight and accountability to ensure that resources are being deployed effectively and efficiently.

“The investments we make in education have long lasting impacts not just on our children – but on our city. That’s why we have a responsibility to ensure efficiency with every dollar. This is money that should be going to kids in the classroom, and not the bureaucracy at Tweed,” said New York City Comptroller Scott M. Stringer. “When it comes to our kids, every penny counts. But the DOE has a history of losing track of its spending, at the expense of our children. That’s why we’ve audited DOE extensively and are paying close attention to the agency’s budget with our Agency Watch List. There is nothing more important than making sure we keep our promises to our children, and that means making sure that spending gets results and programs are being run efficiently and effectively. All students deserve a strong education, so we’re speaking out and paying close attention to make sure they’re getting the opportunity they deserve.”

The Agency Watch List, first announced in the Comptroller’s Preliminary Budget Presentation, spotlights City agencies – the Department of Correction (DOC), Department of Education (DOE), and Department of Homeless Services (DHS) – that raise the most budgetary concerns due to rapidly increased spending without sufficient transparency around results. Reports, to be released on each department quarterly, will review trends and recommend indicators that should be reported and monitored to evaluate the effectiveness of agency spending in achieving the Administration’s stated goals.

Lack of Procurement Oversight Remains a Risk for Waste

• The Department of Education is budgeted to spend $9.5 billion on non-personnel services (known as OTPS) in FY 2018, including a contractual services budget of $6.95 billion which itself is projected to rise to $7.16 billion in FY 2019;
• Although the DOE’s OTPS spending constitutes fully one-quarter of the total citywide OTPS budget, and its contractual services budget constitutes 44% of the entire City Contract Budget, these expenditures are not included in the annual Agency Procurement Indicators report published by the Mayor’s Office of Contract Services (MOCS); and
• This is of particular concern for waste, as numerous audits and analyses by the Comptroller’s Office have documented deficiencies in management and accountability in DOE’s procurement practices, including the overuse of non-competitive and emergency procurement methods, retroactively evaluated contracts, and lack of review systems for vendors.

Renewal Schools Show Moderate Improvement but Actual Spending Not Reported

• Reporting on spending and outcomes at Renewal Schools as a group is not provided, inhibiting adequate oversight and evaluation;
• Renewal schools have demonstrated moderate progress among some important and reported indicators such as declining chronic absenteeism and improved graduation rates, although about two-thirds of high schools in the program still failed to reach their targeted graduation rates;
• However, students at most Renewal Schools still struggled to perform up to standards on State reading and math exams in 2017, as only 15.9 percent and 9.4 percent of Renewal School students in grades 3 through 8 passed the 2017 reading and math exams respectively, in comparison to Citywide average rates of 40.6 percent in reading and 37.8 percent in math.

Investment in Other Important New Programs Expands, But Reporting on Progress is Not Systematically Reported

DOE projected spending $372 million in FY 2019 on programs and initiatives to improve student outcomes. These investments are crucial in helping to level the playing field for all students, but must be monitored to ensure the spending is going to benefit the students as promised. To determine whether these investments are working for students, the DOE should provide clear reporting on the programs’ progress and that of the students who participate in them.

• The Equity and Excellence initiatives were budgeted for $149 million in spending in FY 2018, rising to $221 million in FY 2019;
• Progress in the Equity and Excellence initiatives, such as Universal 2nd Grade Literacy, AP for all, and Algebra for all, are not routinely reported;
• A series of other initiatives, including expanded Career and Technical Education (CTE), summer programming, mental health access and guidance counselors, were budgeted for $136 million this year, rising to $151 million in FY 2019; and
• Actual spending and results for these initiatives should be reported separately by DOE.

Key Indicators Currently Not Reported

A number of key indicators regarding the Department of Education spending on critical programs are not currently publicly reported. As part of the Agency Watch List report, the Comptroller’s Office is calling on the Administration to immediately make these statistics publicly available, and incorporate them into the Mayor’s Management Report.

• Number of active Renewal Schools and spending;
• Measure of 2nd grade literacy;
• Percentage of students with access to AP classes;
• Percentage of students with algebra instruction;
• Number of graduates enrolling in college.

To read the Comptroller’s full report, click here.