In the article Chicago Schools’ Financial Controls Assailed in Report, Caroline Porter discusses how mismanagement and inefficiencies are draining the cash strapped Chicago Public Schools (CPS). This is evidenced by the financial report that had been released for the fiscal year 2013. According to the Chicago Board of Education’s oversight office, there were a number of deficiencies in internal controls and a number of cases of detrimental employee misconduct. In a particular instance, the report showed how a former technological worker had been suspected of embezzling more than $400000 from the schools. Consequently, Porter set out to identify the failure of management to establish sound financial controls to ensure that the budget and other resources are used in an ethical, regular, economical and efficient manner to meet the set goals and objectives.
Porter notes that the Chicago School District serves close 400, 500 students in grades kindergarten all the way to 12th grade. This makes it one of the largest school districts in the country only behind New York and Los Angeles. General James Sullivan, the inspector general of the Chicago Board of Education oversight office, wrote in the report that the deficiencies in internal controls coupled up with employee misconduct were mainly responsible for the anomalies in the financial reports. In one obvious instance, a high school technological coordinator had set up fake vendor accounts that were used to steal cash from the system illegally. In the fiscal year 2013, the inspector general’s office received 1460 complaints out of which 22% were investigated. This figure represented a drop from the previous year where 1650 complaints were received and 28% of them were investigated. Porter identifies that there is no one solution that would be efficient in addressing the issue given that a number problems had been identified as the root causes. Chicago Public Schools has about 450 schools and has about 40000 employees and although a number of problems with regards to financial controls had been identified, there are many other things that the system is doing thoroughly and efficiently. Porter notes that most of the system is honest and ensures the wise spending of the tax payers’ money. It’s only a small systemic issue that leads to the flaws that had been reported.
Among the complaints received, 18% were related to residency issue in that the school district requires that the employees hired to reside in Chicago. 13% of the complaints related to inattention to duty by the employees and 8.5% was alleged to criminal misconduct. According to Mr. Sullivan, a rampant issue was the problem of vendor abuse. A case in point is the instance whereby the employees allegedly received and accepted products from the vendors while they paid the original price. As a result, there was almost a $100000 extra budget spending. Joel Hood, the Chicago Public Schools spokesman, said that the district school had created a strategic source supplier list for the employees of the public school to use when searching for the board-approved vendors on good terms with the district. This was one of the ways of solving the problem of vendor abuse. Hood went on further to indicate that the Chicago Public School district takes seriously abuse of school resources and has taken the relevant steps and created rigorous safeguards in its process of procurement. He went on further to state that the district does not hesitate in debarring vendors, disciplining its personnel and bringing any criminal events to the law enforcement agencies.
Caroline Porter does an excellent job in highlighting the problematic issues in the financial controls of the Chicago Public Schools District. She clearly pinpoints the systemic issues that result to the flaws of the system. Porter identifies mismanagement and inefficiencies of the system as the main problem. However, she only highlights the problems but does not offer concrete solutions. The solution she highlights is those that the CPS board has put in place. Focus on the solutions to the mismanagement and inefficiencies problem would have made her article appealing and better. Nevertheless, the article provides insight on how mismanagement and lack of efficiency in the financial controls can bring down an organization.
Works Cited
Porter, Caroline. "Chicago Schools' Financial Controls Assailed in Report." The Wall Street Journal. N.p., 3 Jan. 2014. Web. 20 Nov. 2014.
