Audit finds widespread fraud, abuse of 'extra pay' in Chicago Public Schools

Chicago Public Schools spent 77% of the $1.49 billion in federal COVID-19 relief money on employees' salaries and benefits and the district has seen "extra pay" skyrocket during the pandemic, according to a 2023 report from the district's Office of Inspector General.

The report provides many critical conclusions, including a concern over abuse of extra pay for employees in the form of overtime or stipends for taking on extra duties. The cost of extra pay for district employees increased from $42.5 million in 2017 to $73.9 million in 2021.

There was also widespread fraud by "deliberately miscoding" truant students as transfers in an effort to "mask chronic absenteeism" that the Office of the Inspector General said called into question the district's reported attendance and graduation rates.

The report gave examples of a practice called "buddy punching," where one school district employee clocks in an absent colleague as working.

"At one school, colleagues punched in a teacher’s ID number on days when the teacher stayed home from summer school," the report stated.

In another example, one school district employee received nearly $150,000 in extra pay and other forms of supplemental pay over four years while clocked in at his school while casino records indicate he was visiting a casino. That same employee was paid for working two different types of supplemental pay jobs simultaneously.

A clerk paid herself more than $15,000 in unauthorized overtime and other extra pay over 13 months by using the principal’s password to enter and approve her own extra compensation.

"Paper timesheets that are supposed to be maintained by schools to document Extra Pay mysteriously disappeared during OIG fraud investigations," the report stated.

School district officials say they have not had the staffing to check if the corrective action policies were actually implemented due to a lack of staffing, according to the Office of Inspector General.

The Office of Inspector General stated that on June 28, 2022, the OIG outlined 10 findings and 10 recommendations on how to address abuse of the Extra Pay Rules and requested a corrective action plan from Chicago Public Schools by August 9. On that date, Chicago Public Schools sent a memo "promising various actions, most of which it said would be explained in a November 30 Integrity Memo. However, the OIG later found that the November 30 Integrity Memo left several areas of concern unaddressed."

The district responded to the report.

“Chicago Public Schools greatly values our partnership with the Office of the Inspector General (OIG) and we support the work to investigate all issues of misconduct among our 40,000 team members," Chicago Public Schools' spokeswoman Mary Fergus told The Center Square in an email. "As a District, we take seriously our responsibility to serve our families with integrity and to address individuals who breach CPS policies and the public’s trust and hold them accountable. CPS will continue to ensure our District policies and procedures support the highest ethical standards to ensure our valued team members act in the best interest of our students.”

The district stated the Office of Inspector General report "also notes that the District has committed to making several policy improvements to help prevent future misconduct. CPS has informed the OIG that it is creating a team within the Office of Student Support and Engagement that will address the improper use of leave codes and the documentation of transfers and dropouts."