Thousands of dollars in gift cards stolen or misused by Chicago school employees, report contends

In his annual report, the inspector general for Chicago Public Schools says the gift cards were supposed to be used as incentives for students and families.

Chicago public school employees “stole or misappropriated” thousands of dollars worth of district-purchased gift cards that were intended to be used as incentives for students and families, the district’s inspector general says.

The Chicago Tribune reports that the misuse of gift cards was among a long list of alleged wrongdoing by teachers, principals and district families in Inspector General Nicholas Schuler’s annual report, which was released Wednesday.

Dozens of schools, offices and departments spent slightly more than $250,000 on 7,462 gift or cash cards between January 2013 and December 2016, according to Schuler’s office. Employees at five schools examined by the inspector general used some of those cards to make more than $10,200 in “personal purchases,” Schuler says.

[READ the entire Inspector General's Annual Report for Fiscal Year 2017 (75 pages)]

In one case, a principal stole presents of at least $500 in gift cards that were donated to special-needs students. The same principal gave an acquaintance 30 donated backpacks filled with school supplies, the report asserts.

Among other findings of the report, which does not identify schools or employees by name:

• An elementary school principal spent at least $22,000 in school funds for personal purchases at Costco and Apple stores. 

• A district agricultural program employee used his meat processing company to sell for a profit eggs produced at the school.

• A principal used school funds to pay for a “teachers’ lunch club” featuring lobster, shrimp and steaks.

• Families continued to use false addresses to get their children into highly competitive selective-enrollment programs.

According to the report, a principal and clerk at a program for vulnerable students used cards to spend more than $3,000 on items that “at best, were only somewhat related to educational purposes or, at worst, were clearly for personal reasons.” That included wedding favors, several purchases from an Iowa casino and “repeated expenditures at restaurants.”

Schuler says his office also discovered the school’s principal and other employees stole hundreds of dollars worth of gift cards that were donated to students, as well as hundreds of dollars in school funds. The former employees also tried to intimidate a teacher at the school into lying to investigators, Schuler contends. The principal and clerk resigned in light of the investigation, Schuler said. Two additional employees were fired.

Staff members at four other buildings used school-purchased gift cards to pay for a range of expenses that included telephone bills, car detailing at a BMW dealership, Kmart layaway payments and meals.

In addition to the misuse of the gift cards, Schuler criticized the extra expense the district incurs because of the processing and service fees.

Schuler’s office wants the Chicago Board of Education to create a new policy that specifies when schools can use gift cards, sets out how the cards would be tracked and limits their purchase to one competitively selected vendor. The district  says it is developing a broader policy for gift cards.

During the year covered by the report, the inspector general’s office received 1,457 complaints. Schuler said his team opened investigations into 276 cases; those investigations included more routine examinations of residency cases, purchasing or improper uses of sick time.

In a statement, school district spokesman Michael Passman says administrators have worked to address the incidents outlined in the report.,

"We are reviewing the Inspector General's recommendations to determine whether they will strengthen district operations and prevent misconduct,”  Passman says.

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