The I-Team investigation, "The Desk Job," found evidence that the Chicago Public Schools overpaid for desks and other classroom furniture that was less quality than ordered.
The I-Team has finally learned what actions CPS took against the vendor and some of its own employees-- actions that took over a year.
"I would say it's potentially fraudulent and that is why the inspector general is looking into it," Tim Cawley, CPS chief administration officer, said in November, 2011. It was then that the I-Team investigation triggered an across-the-board audit of all school furniture contracts after evidence of bait-and-switch.
We found inconsistencies in what school officials ordered from the Frank Cooney Company and what Cooney delivered. Cooney had supplied the majority of CPS' new furniture since 2008. Headquartered in Elk Grove Village, the company has been run by Kevin Cooney for more than 20 years.
After pouring through CPS contracts, this was just one example of the questionable furniture deals: custom-designed computer tables from a manufacturer called KI.
"No it is not our furniture. Our table, as specified, meets the Chicago electrical code," Dave Fairburn, KI Manufacturing, said in November 2011.
The I-Team found that instead of the state-of-the-art, pre-wired tables CPS ordered and paid for, Cooney provided schools with plain tables from a different manufacturer worth half the price-- and those had to be wired by CPS electricians.
At just one school, Westinghouse High on Chicago's West Side, this report by the CPS inspector general says more than $90,000 was wasted when the school accepted and paid for these lower quality tables lower.
CPS then had to order higher-quality replacement tables from the Frank Cooney Company, costing taxpayers another $90,000. After buying twice as many tables as needed, CPS was then overbilled nearly $9,000 for the replacements. That finding is in this CPS Inspector General report which answered many of the questions the I-Team raised. School officials now say they have implemented changes to eliminate discrepancies including:
- Allowing only one department to place product orders
- Better accounting of deliveries
- The double checking of invoices
- And all substitutions must be approved by operations
A few months after our report, the Board of Education sought to prohibit Cooney from doing business for "allegedly engaging in conducted that violated board rules and policies."
Instead, they settled. The Frank Cooney Company must pay the district $225,000 and may not do business with CPS for 18 months.
We asked company CEO Kevin Cooney to discuss the settlement. Instead, his lawyer sent us this statement: ". . . The Frank Cooney Company entered into a voluntary exclusion for a short period of time, namely, eighteen months . . . there was no admission of guilt by Frank Cooney Company."
CPS officials also say they found "improper conduct" in the Cooney deal by three school district employees. The three, who no longer work for CPS, are also banished from doing business with the district for three years.
One of those former employees, Greg Victor, refutes the allegations, and showed this notice that states he was part of a budget layoff, and had no idea he was banned by CPS until told by the I-Team.
"I was a scapegoat to be perfectly honest with you. No one from the IG office talked to me or called me or any of that to say what the reason was. Now I still don't know what the reason was," said Greg Victor, banned ex-CPS employee.
In a statement Monday night, Chicago Public Schools officials say as a district, it is committed to ensuring that all third-party relationships, contractual agreements and employees are dutifully adhering to the expressed terms of all contracts and operating in full compliance with the law.
Chicago Public Schools' statement to the ABC7 I-Team:
"Following a thorough investigation, conducted by the Office of the Inspector General, of Frank Cooney Company and three CPS employees, the Chicago Board of Education took decisive actions to debar all subject parties from doing business with CPS for a period of 18 months and implemented strict procurement and tracking procedures, designed to increase accountability and transparency.
As a District, we are committed to ensuring that all third-party relationships, contractual agreements and employees are dutifully adhering to the expressed terms of all contracts and operating in full compliance with the law."
The District has implemented changes to procedures in tracking, and accountability of all purchases, including classroom and office furniture. These changes are designed to eliminate any discrepancies in the orders and ensure that all receivables are properly recorded. Changes include:
- Furniture orders can only be initiated by the CPS Operations Department. This allows for oversight of contract compliance. Previously, individual departments, including schools, were allowed to purchase directly from the furniture vendor.
- Strict adherence to approved budgets. The Operations Department will determine if a school's furniture budget should be amended and, if so, Operations requests the increase in funds from the District's budget office.
- Only core items as defined by Operations can be ordered. Any non-core or off-contract orders have to be approved by the District's Chief Operating Officer and Chief Procurement Officer.
- Product substitution is allowed only with the approval of Operations and Procurement. Where substitutions occur, a purchase order is reissued or revised to match the actual product ordered. Previously, product substitutions were often made after orders were placed and were not reviewed by Operations to verify that the substituted equipment would meet core standards.
- All items must be accounted for at the time of delivery. When a delivery is made, the driver must present the school representative with a delivery ticket to be signed, indicating a delivery has taken place and the products have been received. New procedures mandate that the school representative must ensure that all furniture listed on the delivery ticket matches what was actually delivered.
- The Operations Department will check invoices against delivery tickets that were signed at time of delivery, verify for accuracy against the purchase order and the receipt for payment. Invoices with errors or with incomplete supportive information will be returned to the vendor for corrections.