01/05/2012 03:44 pm ET

Chicago Schools Investigation Uncovers Multiple Instances Of Fraud, Employee Misconduct

A new report released by the Chicago Public Schools' inspector general has uncovered a host of misconduct allegations against CPS employees and officials, including improperly disbursed benefits that resulted in a loss of over $1 million in district funds.

The 38-page report published on the school system's website Wednesday details repeated incidents of employee misconduct. Numerous school employees and two law enforcement officials were found to have falsified documents to add their children to free or reduced-price lunch lists reserved for low-income families. Other falsified records were found to misrepresent employee attendance and residencies, and improper invoicing practices were uncovered that violate district-wide consulting policies.

CPS spokesperson Marielle Sainvilus called the report's findings "both serious and disappointing," and said that the district plans to use recent leadership changes as a platform to launch more far-reaching adjustments to current oversight and enforcement practices.

“The new leadership team at CPS will not tolerate any activities of this nature that compromises the integrity of our district," she said. "We are already taking necessary corrective actions and additional steps to implement accountability measures throughout the system to ensure that proper protocols and procedures are met."

Spot checks of employee criminal backgrounds found several current staff members had previous drug-related convictions, including an elementary school cook who was charged with possessing cocaine, and an elementary school teacher and a volunteer assistant basketball coach cited for possession and intent to deliver cocaine. Multiple cannabis possession charges were found in employee backgrounds, as was a sexual offense committed against a minor by an elementary school security guard. An investigation into an elementary school teacher's arrest revealed that the charges stemmed from unlawfully-obtained video recordings of males undressing in a water park changing room, including minors.

Inspector General James Sullivan also reports offenses committed on school grounds, including two instances of staff members downloading or distributing pornography on school computers and one employee who solicited sexual partners on Craigslist using a CPS email account.

Financial problems were also rampant. The OIG found several incidents of financial agreements made in spite of interest conflicts, including a large-scale sale of athletic wear facilitated between a Local School Council member and his wife's clothing company, and an assistant principal who failed to disclose that he was a corporate officer of a travel agency that had received more than $30,000 in purchase orders from his high school, from which he received a direct economic benefit. A single teacher was charged with felony theft after the inspection uncovered more than $56,000 in misappropriated funds from an after-school program, and more than $40,000 missing from an elementary school's PTA checking account.

Additionally, holiday, vacation and sick time pay was found to have been allocated to retired teachers working as substitutes in violation of a 2007 agreement with the Chicago Teachers Union that classifies a per diem rate for substitute teaching. Inappropriately distributed benefit pay between 2007 and 2011 resulted in $1.13 million in improper payouts. Sullivan's report recommends efforts to recover some of that money as the school system faces massive budget shortfalls.

Sainvilus says the school system will respond to the OIG report's findings aggressively in an effort to reclaim the trust of the citizens it serves.

"We have a responsibility to maintain public trust and as we continue to work towards providing every student with a high quality education that prepares them for college and career," she said. "We will hold everyone accountable in that process who do not work in the best interest of our students."