|Mayor Bill deBlasio|
Mayor de Blasio’s office arranged for a nonprofit fund to loan $1.36 million to four private pre-kindergarten programs too troubled to get city contracts. Now it wants to use taxpayer money to repay the loans.
Education watchdogs say the mayor side-stepped procedures that guard against waste and abuse by asking the Fund for the City of New York to finance the faulty pre-K vendors.
“It’s like using a slush fund to avoid their own procurement rules,” said Patrick Sullivan, a former member of the Panel for Educational Policy, which votes on Department of Education contracts.
The moves come amid charges that the mayor created another nonprofit, Campaign for One New York, as a political slush fund to finance his agenda. In a probe revealed Friday, the state Board of Elections found that de Blasio and his top aides used the nonprofit to illegally raise money for fellow Democrats.
The 50-year-old Fund for the City of New York created an interest-free-loan program in 1976 to provide cash to nonprofits waiting for money from approved government contracts. In this case, the city gave a green light for pre-K programs to accept kids last school year despite problems including tax evasion, misspending public funds and failure to hire sufficient qualified staff — a move Sullivan called “irresponsible.”
Other critics agreed.
“It puts the taxpayers’ money at risk and it puts vulnerable children at risk,” said Leonie Haimson, an education advocate with Class Size Matters and a DOE budget watchdog.
In a rush to expand de Blasio’s signature Pre-K for All initiative in 2014-15, the Mayor’s Office of Contract Services asked the Fund for the City of New York to give “bridge loans” to the four vendors to pay teachers and other expenses pending the background stamp of approval:
· Church Avenue Day Care in Brooklyn, whose program cost $768,676, did not file city corporate tax returns from 2010 to 2014, which disqualified the vendor. Phone numbers listed for the company were out of service Friday.
· B’Above WorldWide Institute in Richmond Hill, Queens, loaned $330,050, failed to fix problems with oversight, staffing, records management and curriculum, records show. A representative did not return a call.
· Footsteps Childcare in Brooklyn, loaned $133,840, was accused in 2008 of “numerous instances of failure to demonstrate that it had spent monies properly” under a former contract with the state Office of Children and Family Services. It reimbursed $64,000 of $100,000 the state found misappropriated. “I don’t want to talk about it,” Footsteps Director Monica McDonald said Friday.
· West Harlem Community Organization, loaned $130,000, owes state and federal taxes and has not yet settled with the IRS. In addition, the city Health Department shut down a pre-K class it was running under the Administration for Children’s Services for failure to hire qualified teachers and do background checks on some staff. The issues were fixed and the program reopened last July 1, representatives said.
The DOE has since dropped all four pre-K providers. Now it plans to ask the city Comptroller’s Office to retroactively approve contracts with the vendors so taxpayer money can repay the Fund for the City of New York for its bridge loans.
Experts called the unusual request an end-run around the rules.
“We will review these contracts when they are submitted,” said comptroller spokesman Eric Sumberg.
The DOE says taxpayers should foot the bill even though it found the vendors “nonresponsible” and lacking the required integrity to win contracts.
All pre-K providers undergo a “rigorous review process” and strict oversight, said DOE spokeswoman Toya Holness, adding that performance or safety problems can result in immediate suspension or eventual termination.
“All families can rest assured their child is in a safe and supportive learning environment,” Holness said.