Officials Unraveling Woes of Texas Schools
By LAURA GRIFFIN, NY TIMES, August 29, 2004

HUTCHINS, Tex., Aug. 26 - While other pupils around the state settled into the routine of classes, many Wilmer-Hutchins High School students spent their first week back at school sitting idly in the cafeteria, playing dominoes and taking naps.

Their long-dilapidated school, unusable since it was flooded in summer storms, has become a symbol for what is being called the worst school district in the state. Five of the district's seven schools are in such bad shape that a state report recommends tearing them down.

Now, Texas education officials are trying to determine how the district's financial situation deteriorated to the point that even with a $500,000 loan this summer, it could not afford to meet payroll for some of its teachers and staff members this week.

A grand jury looking into allegations of corruption in the district, which serves a mostly disadvantaged area five miles from the gleaming Dallas skyline, returned no decision this week but left the case open for further inquiry.

Cedric Davis, the Wilmer-Hutchins school district police chief, took the accusations of wrongdoing and graft to the Dallas County district attorney's office this summer.

"They've mismanaged funds, and they're in the hole," Chief Davis said. "Where'd that money go? It's not in the buildings or the students or the teachers." On Monday, the Texas Education Agency will begin an audit to determine what it will take to save the district. In connection with that audit, state health officials will inspect the schools for environmental and safety concerns, including air quality.

"They receive sufficient funds for operating a fairly well-achieving district," said Dr. Ed Flathouse, associate commissioner for finance and compliance at the education agency. "But when you look at other districts, on the whole Wilmer-Hutchins comes up short every time."

Most agree something has to be done.

No matter what happens, education officials say the 2,902 children in Wilmer-Hutchins schools are paying the price.

"Teachers and others may lose jobs, but a whole generation of youngsters in that district may be lost," Dr. Flathouse said. Superintendent Charles Matthews did not return repeated phone calls, but the Wilmer-Hutchins school board president, Luther Edwards, said the problems were caused more by decades of racial inequity and a lack of growth in the area than by the actions of the board or the administration.

Ninety-five percent of the students are black or Hispanic and 63 percent are economically disadvantaged.

"When they talk about mismanagement and poor leadership, why is it that it always happens in predominantly minority school districts?" Mr. Edwards asked. "It's a shame that in 2004 we're still grappling with the same thing - racial tension - but indirectly now."

But using race as an excuse offends some other African-Americans in the district. All along, they say, it has been a leadership issue. Chief Davis says that district money has paid salaries of people who did not work, contracts that should have been put out for bid but were not and for improper travel and phone expenses by trustees.

He also claims that the district illegally used federal money intended for instruction to pay bills, and he hopes to get the Justice Department involved.

When Chief Davis took his accusations to district officials, he said, they retaliated by disbanding his department. He and officers have sued for wrongful termination, and a judge, granting a temporary injunction, reinstated the entire department.

"I'm angry that the kids have to go through this mess," said Chief Davis, who graduated from Wilmer-Hutchins in 1985 and whose daughter is a senior there. Mr. Edwards, the board president, also blamed a lack of financing from the state for the district's woes. But Wilmer-Hutchins gets more state and federal money than any other district in Dallas County.

Mr. Edwards also said he hoped voters would pass a $68 million bond package in September so work on the schools can begin.

Turmoil in Wilmer-Hutchins goes back decades. In the 1990's, the district had four superintendents in less than five years and the state stepped in for two years in the latter part of the decade because of low student scores and money problems.

Johnny Brown, now DeKalb County superintendent in suburban Atlanta, ran the district during part of that time when test scores, school ratings and finances improved.

"All children can learn and excel, given the proper environment," he said. "What's required of the adults is not rocket science - it's to provide a quality education. I believe in local systems taking care of their own, but there are times, and this is one of them, that the state needs to step in."

It is not that easy, according to the state education agency. A school district must receive the lowest performance rating for two consecutive years before the agency can take it over. Wilmer-Hutchins is currently rated "acceptable" over all, despite low test scores among middle school and high school students.

"This district has a record of having the lowest to next-to-lowest rating,'' said Debbie Ratcliffe, a spokeswoman for the state agency. "Right now, they're O.K. on that front, so that makes it difficult. But we can impose sanctions if there are financial problems."

Across the country, good school districts share a commonality - their communities demand accountability and results.

That has not happened in Wilmer-Hutchins. Historically, few people have participated in matters concerning the schools, local and state educators said.

This time it is different, said Brenda Duff, P.T.A. president for the high school and Chief Davis's mother.

"They haven't demanded anything in the past, but I do see some changes coming," Ms. Duff said. "The community's upset."

Many parents are trying to figure out ways to change districts, short of moving. And students say they are embarrassed.

"I'm afraid to claim this school, since it's the worst," said Reavis Skinner, 14, a freshman.

A week before school was to start, the district announced that storm cleanup of the high school would delay classes for a week.

To Chief Davis, that storm was heaven sent - without it, the problems may have gone unnoticed.

"The storms just enhanced a problem that has existed for a long time," he said. "I think it was an act of God to bring this thing down."

Federal agents investigate troubled school district
LIZ AUSTIN, Star Telegram, September 10, 2004

LINK

DALLAS - Federal prosecutors and the FBI have joined a burgeoning investigation into corruption allegations at an impoverished North Texas school district that already is facing a possible state takeover.

Investigators are trying to determine how the Wilmer-Hutchins Independent School District went from having $1.6 million fund balance to a deficit in just over a year. Other allegations include document shredding, double payments for expenses and the illegal use of property tax revenues to pay off a $500,000 loan.

FBI agents and Texas Rangers seized documents and served subpoenas at the district's administration building Thursday, expanding an investigation by the Dallas County District Attorney's office. A federal grand jury investigation also is under way.

Superintendent Charles Matthews did not return telephone messages left by The Associated Press on Friday. But he repeatedly has said he welcomes the scrutiny.

"Once they clear us of wrongdoing, we can move ahead," he told The Dallas Morning News. "If somebody's guilty, they'll pay the price."

The district just south of Dallas has been scrutinized since early August, when administrators announced that storm damage would delay the start of classes at the dilapidated, roach-infested high school.

Two weeks later, the district's business manager said Wilmer-Hutchins was "pretty much broke." The district failed to meet payroll that week, and three-quarters of its 400 employees had to wait 15 days for their first paychecks.

"Every school district in the state of Texas makes payroll, and this kind of mishap is just not understandable," said Tom Canby with the Texas Education Agency, which is investigating the district's finances. "That's why we need to be there: to restore financial accountability at the local level."

A Dallas County grand jury hearing the case decided on Aug. 26 to issue no indictments but agreed to keep the case open.

Prosecutors later received more information and asked federal officials for help in the investigation, said Rachel Horton, a spokeswoman for the Dallas County District Attorney's office.

She wouldn't confirm that the grand jury was hearing the new information and declined to discuss what charges were being considered. Grand jury proceedings in Texas are secret.

"The proof is in the pudding, I guess, if there end up being any indictments down the line," she said.

FBI and Texas Rangers officials declined to discuss specifics about the seizures or subpoenas.

Two Texas Education Agency auditors have been combing through Wilmer-Hutchins' financial records since Aug. 27, said Canby, managing director for the TEA's division of financial audits.

Wilmer-Hutchins, where 63 percent of the district's 2,900 students qualified for free or reduced-price lunches in 2002, has faced scrutiny in the past.

The state has shuttled financial monitors in and out since the early 1980s and in 1996 took over the district for two years. FBI and IRS agents raided the administration building shortly before the takeover, but that investigation returned no indictments.

Ed Flathouse, the state's associate commissioner for finance and compliance until his Aug. 31 retirement, has said the TEA is laying the groundwork for another takeover.

Canby declined to discuss a potential takeover, but he said he was pleased with the district's decision on Tuesday to hire an outside financial consultant.

Wilmer-Hutchins also has hired consultants to oversee the building of three schools and the renovation of several others pending voter approval of a $68 million bond project.

The proposal that will go before voters Sept. 18 would fund an $18 million renovation of Wilmer-Hutchins High School, where years of accumulated maintenance problems have forced students to attend classes elsewhere.

School board member Joan Bonner said she is outraged about the district's financial struggles and thinks all the board members should be replaced for letting the problem get this bad.

"Out of sheer compassion and respect for this district, we need to leave," Bonner said. "We have failed."