Unreported $55M Paid For Tutoring
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The city comptroller’s office is probing why the Department of Education didn’t report paying $55 million to a private tutoring company that has been investigated for questionable business practices.
The company, Platform Learning, estimated it would need $7.6 million to provide tutoring services required under No Child Left Behind regulations for children in failing schools. Instead, the Education Department paid the company $63 million, according to the deputy comptroller for audits, contracts, and accountancy, John Graham. He said the department should have registered the change in the city’s financial management system, noting that the company, which is now bankrupt, was investigated last year for allegedly bribing principals and offering gifts to students to steer them to use its services.
“There should have been bells going off,” Mr. Graham, said. “There’s not diligent oversight on the part of the DOE when it comes to its contracts.”
The money is drawn from the city’s pot of federal funds set aside for educating low-income students, a percentage of which must go to tutoring services. A Education Department spokesman, Andrew Jacob, said the contracts must be flexible because parents are allowed to choose among the tutoring services, known as Supplemental Educational Services, year by year.
“The city offers contracts to all state-approved SES providers and pays them based on the number of students they serve,” he said. “Because our payments are based on demand, the contract values the comptroller’s office cites are irrelevant.”
The CEO of Platform, Eugene Wade, said the first year the company’s estimate was intentionally low — about 2,000 students — at the direction of the Education Department because there was no way to predict the number of students who would sign up for its service. In two years, it served more than 40,000.
He added that the company had paid for “marketing ” to entice people to use its services before it was paid by the Department of Education, and that the money paid to it by the department went solely to operating costs.
Mr. Jacobs said the Department of Education is working with investigators to develop a monitoring agreement for future contracts with Platform.
