How did a contact for leasing Xerox machines that was supposed to cost the Department of Education one million dollars end up jumping by more than 6,700 percent?
How did a company that was supposed to deliver restaurant supplies to school cafeterias for $15,000 end up billing the city more than $800,000?
How did the city spend a million and a half dollars on ballroom dancing lessons for kids?
It’s these kinds of questions that have been occupying Comptroller Bill Thompson’s mind lately. On Wednesday, he chastised the Schools Chancellor Joel Klein for going on “an insane spending spree.” (He did this in a letter and a press conference, and, of course, on his YouTube channel). Thompson said he had been investigating how the education department spends money, and found that around 20 percent of contracts awarded balloon past their estimated cost.
Over the past two years, the department has estimated that its contracts will cost just over 325 million. In reality, they cost around a billion dollars, says Thompson.
Now that Thompson is running for mayor, he rarely does things quietly. A spokeswoman, Ann Forte, said the education department only found out about the contracts when Thompson put on a press conference in front of City Hall.
Forte says the comptroller is picking and choosing numbers to suit his point, without looking closely at what is really happening, or even bothering to talk to them about it. In one instance, the DOE said it was going to spend about $500,000 on “ballroom dancing instruction.” But then, Forte explains to the Voice, the movie Mad Hot Ballroom came out and kids started going crazy for ballroom dancing, and then department had to spend nearly a million dollars more to help them satisfy their obsessions. Was that so bad, she wanted to know?
In the case of the Xerox contract, she says the numbers are just misleading. The contract, signed in 2002, was always supposed to be in the range of 20 million, she says. A few years later, the department tacked on another ten million, and then another one million, and somehow, the whole thing grew to 67 million. Meanwhile, the comptroller’s office decided that the initial contract was for one million and ballooned 6,700 percent from there. “We didn’t say we were going to spend one million and then go and spend 67 million,” she told the Voice. “That’s just inaccurate.”
This whole things seems like a lot of bureaucratic wrangling, and both agencies still have a lot of explaining to do. We know, for example, that both the comptroller and the education department have spent millions of dollars on contracts to hire fancy consulting firms, such as Deloitte and Touche, whose consultants have billed the city more than $400 per hour. There is still not a ton of transparency.
One issue behind all this is the fact that the Department of Education, unlike other city agencies, says Thompson, does not assign contracts with fixed dollars amounts. The department gives estimates, but is allowed to up the amount at the discretion of the chancellor.
And the real question — whether this actually a case of runaway contracts, or whether the comptroller is just trying to set himself up to look like the number one do-gooder in the City of New York — has yet to be answered.