Voucher fraud? Maybe, but John White doesn’t care

By Robert Mann

Imagine if an audit of Louisiana’s Head Start schools came back showing that almost every one of them kept sloppy records, so much so that the schools could not demonstrate that the government money they received was being “spent only on ‘educational purposes.'”

Louisiana Education Superintendent John White

Louisiana Education Superintendent John White

Imagine if almost every one of those schools could not produce any records to prove that their expenditures did not constitute “gross irresponsibility or gross individual enrichment.”

What do you think would be the reaction of Louisiana Republican leaders?

What if the audits of these Head Start schools were littered with the following statements: “We were unable to perform the [investigative] procedures because the school did not have a separate checking account or other procedures to account for [government related] expenditures separate from other expenditures.”

Can you imagine the outrage we’d hear from Gov. Bobby Jindal and state Education Superintendent John White?

Well, what if similar audits turned up showing the same kind of sloppy record keeping at almost every private voucher school in Louisiana? What do you imagine the reaction would be to that?

Well, we don’t have to imagine.

We have the reaction in the form of a letter by White to the Times-Picayune in response to my column in Sunday’s Picayune about two audits of the voucher schools that taxpayers will fund to the tune of about $45 million this fiscal year.

As I wrote:

And of the audits (basically internal investigations conducted by two Baton Rouge accounting firms), White trumpeted them as proof that his voucher program – save for New Living Word – is an unqualified success. The headline on a Department of Education press release proudly declared, “99 Percent of Schools Show No Violation.”

There’s just one problem with that statement: It’s patently false.

The audits were conducted to ensure that, “Scholarship funds shall be spent only on ‘educational purposes,’ as defined in the most recently approved Minimum Foundation Program formula. Any expenditure of scholarship funds constituting gross irresponsibility or gross individual enrichment is prohibited.”

In fact, the audits revealed that the afore-mentioned standard “could not be completed for forty-nine of the fifty-one private schools reviewed.” One audit is littered with the following statement, concerning the records of dozens of voucher schools: “We were unable to perform the procedures because the school did not have a separate checking account or other procedures to account for scholarship expenditures separate from other expenditures.”

Most of the schools were also unable to verify that their “expenditures do not constitute gross irresponsibility and are not individually enriching.” These are not insignificant findings except, apparently, to White. The state will spend about $45 million in the current fiscal year on vouchers for about 8,000 students.

To suggest that the audits uncovered “no violations” is a bit like saying that since I didn’t file my taxes for the past five years, and because the IRS can’t yet determine if I actually paid any taxes, there’s no problem.

In his letter today, White defends the voucher schools this way:

[Mann] manipulates the language of audits to disparage private schools that offer students in struggling public schools an alternative, when the facts of the audits are clear: of 117 schools offering scholarships to Louisiana families, 116 showed no violations of law. In the one case that did, government did the right thing and ended the school’s participation in the program.

An even more comical defense of these audits was offered in The Hayride yesterday by Jeff Sadow:

In particular, [Mann’s] piece tried to con the reader into accepting the selective shortcomings of a process as indicative of the failure of the policy’s substance. In the two audits, only one deviant school was found, and interestingly enough because it was one of the few that actually followed procedures correctly. Absence of the ability to definitively determine the status of others does not mean they also have problems. In fact, it seems to suggest the real problem was that the Department of Education did not instruct well in what kind of recordkeeping was expected on this particular issue, so endemic was the problem, also likely because of the several other criteria used in the audits (some were informational only), in most cases this information was available and showed few problems.

Sadow and White’s defense of the audits is that since only one school properly followed procedures, the rest of them must be fine. I certainly hope the IRS adopts that philosophy if it ever audits my tax returns.

“Mr. Mann, you have produced no receipts for your home mortgage deduction nor for your real estate tax deduction. But that’s not a problem. We’ll just take your word for it. Here’s your refund.”

Read the audits at the links provided in my Times-Picayune column and decide for yourself.

But also ponder, as I first asked, what would be the reaction by White and Jindal to similar findings about any other government-financed program in Louisiana?

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7 Responses to Voucher fraud? Maybe, but John White doesn’t care

  1. John Bel Edwards says:

    Bob:
    Great points.
    John Bel

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  2. Superintendent White claims that 116 of the 117 audited schools complied with “Bulletin 133.” Quoting directly from Bulletin 133 (see, specifically #2):

    1. Such audit shall be accompanied by the auditor’s statement that the report is free of material misstatements and fairly presents the participating school’s maximum tuition or actual cost of educating a student pursuant to R.S. 17:4016.
    2. The audit shall be limited in scope to those records necessary for the department to make scholarship payments to the participating school and shall be submitted to the legislative auditor for review and investigation of any irregularities or audit findings.
    3. The participating school shall return to the state any funds that the legislative auditor determines were expended in a manner inconsistent with state law or program regulations.
    4. The participating school shall pay the cost of such audit unless funds are appropriated by the legislature for such purpose, in which case the department shall pay the cost of such audit.

    And then, later in the document:

    Use of Funds⎯
    Scholarship funds shall be spent only on “educational purposes,” as defined in the most recently approved Minimum Foundation Program formula. Any expenditure of scholarship funds constituting gross irresponsibility or gross individual enrichment is prohibited.

    And finally:

    iii. tuition and fees may not be higher than those charged to non-scholarship students.

    So, 107 of the 117 schools were not in compliance, because there’s no possible way to determine how, exactly, they spent voucher funds. More than 90% of voucher schools were not effectively audited. At least 13 of those schools are also not in compliance because they overcharged voucher students.

    And this is just scratching the surface. They’re trying to put lipstick on this pig, but it just won’t stop squealing.

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  3. deutsch29 says:

    My fact-based, point-by-point rebuttal of White’s letter against Mann:

    http://deutsch29.wordpress.com/2013/07/10/john-white-ill-just-tell-them-reforms-are-working/

    –Mercedes Schneider

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  4. I think that John White and Gov. Jindal have only one plan for to public education in Louisiana – privatize.

    It is clear with the unregulated systems that charter schools and now vouchers operate, there is no evidence that neither White nor Jindal have any concern about any of these schools fiscal integrity. The same holds true for the quality of education for the children of Louisiana, the state (Recovery School District) promotes failure by allowing failing charter schools to operate without any real chance of closure. To make matters worst, several of the politically correct failing charter operators are awarded more schools each year.

    To say that White doesn’t care is a understatement.

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  5. Pingback: Does John White Care About Voucher Fraud? | Diane Ravitch's blog

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