City inspector general gains control of school district fraud

The Philadelphia School District has given up in-house investigations of corruption, fraud, and waste, turning that job over to the city Inspector General.

Bill Green, chairman of the School Reform Committee, said the move would modernize and professionalize the office.

John F. Downs, the former police captain who originated the district's Inspector General's Office and staffed it for the last 11 years, retired Friday.

With a $2.6 billion budget, much of that in contracts, the schools needed more robust oversight of their operations, Green said.

The city will provide the services at no cost to the district through the end of June, according to a recently executed memorandum of understanding. But Green, who said he had long admired the work of Philadelphia Inspector General Amy Kurland, said he hoped the arrangement would become permanent.

In the last six years, the city office has recovered about $40 million in misused funds.

"It's one of the most professional inspector general's offices for any city in the country," Green said.

The district budgeted $431,688 for the Inspector General's Office this fiscal year - including Downs' salary of $100,406 - and Green said that total would remain steady. The employees who now work in the district's office will continue to do so but will report to and be evaluated by Kurland's office.

Kurland said she believed the city and school system had many similar issues to watch for, and that the move would allow the district to "build up [its] own IG's office in the mode we have."

"We have found that people have more confidence in city government when we police ourselves," Kurland said. "That's the kind of thing we're hoping to build in the School District."

Downs was chosen in December 2003 to be inspector general by James Nevels, the SRC's first chairman.

"It was a tremendous opportunity that was offered to me - to create the office and to serve five chairpersons," Downs said Friday.

Downs said he felt his office had a number of successes during his tenure.

Among the achievements he counted were investigations of charter schools that resulted in several former officials' being sent to prison.

The former board president and the CEO at Philadelphia Academy Charter School in the Northeast and the CEO and founding board president of New Media Technology Charter School in Stenton all pleaded guilty to defrauding their schools.

The Inspector General's Office also uncovered embezzlement by a former president of the district's Home and School Council, who admitted stealing nearly $138,000 in scholarship money.

And Downs noted his office had worked with federal investigators on cases involving charter founder Dorothy June Brown and Chaka Fattah Jr., who had worked for a company that ran two alternative schools for the district.

A hearing is set to begin Tuesday to determine whether Brown is competent to be retried on charges she defrauded the charter schools she founded of $6.3 million.

Fattah, who has been charged with bank fraud, tax evasion, and stealing government funds, is scheduled to go to trial in March.

Downs said he had met with Kurland and briefed her on the status of current internal investigations, as well as those in which his office has been working with state and federal agencies.

"My hope is that the staff remains in place to continue these investigations," Downs said.

The current staff consists of two investigators and a secretary. He said Kurland was expected to meet with them next week.

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