It struck some as absurd that the city was keeping positions like parent ombudsmen and student advisers — both funded by SIG — while it was cutting teachers and not paying for textbooks. Massive teacher layoffs, which by contract were to be conducted according to seniority, led to a lawsuit when the district sought to exempt the mostly young Promise Academy teachers in order to preserve the program in those schools. After a lengthy court battle, the district lost, and the staffs the academies had carefully assembled were decimated.
Adding to the bitter taste left by the episode is a study performed by Research for Action, a Philadelphia-based nonprofit, which found that the academies performed better than a matched control group on every academic indicator measured. The state, however, is skeptical that the district can sustain those gains and is leveling a more serious charge — that Philadelphia is using SIG funds to back-fill the extraordinary cuts to state and local budgets.
The first major sign of trouble came when federal monitors visited the city last spring. The U.S. Department of Education challenged the expenditure of $9.2 million — 73 percent of the district's first-year SIG budget — on summer school, according to a report of their findings. The monitors said the district could be running afoul of a federal law that forbids the use of federal funds to supplant state and local funds. In November, the state responded that Philadelphia had been unable to provide documents to support the summer-school expenditures from 2009, adding that it "had little confidence in the ability of [Philadelphia] to provide accurate information."
The state's suspicions grew after a subsequent monitoring visit this February. "We started to delve into things and ask, 'Where's this teacher? Where's this program? You said you were going to do this — where's the results?' And they simply can't produce them," said Renee Palakovic, division chief for federal programs at the state education department. "They can't produce a body and say, 'This person is the school-based instructional leader.' They can't maintain their extended-day programs because they have no money, so they've started to shut them down."
More troubling, at least one school altered its SIG grant mid-stream to allow for the hiring of a science teacher whose position Palakovic said was eliminated due to the cuts. Philadelphia explained that the new hire was necessary to keep class sizes small. Under the law, reducing class-size is a proper use of SIG funds, but the state suspects this represents another instance of the district using federal funds to supplant state and local funds, a violation of federal law.
The visit left Palakovic deeply skeptical about SIG's chances for long-term success in Philadelphia: "I just wrote an e-mail to my superior saying, 'The results in Philadelphia are going to be slim to none because they're not really offering anything additional in these schools. There's nothing new. There's no reform. It's just keeping the boat afloat.' "
Fernando Gallard, a district spokesman, said Philadelphia was working to address the state's concerns, but denied that Philadelphia was using SIG funds to back-fill cuts. Feather Houstoun, a budget specialist on the School Reform Commission — the city- and state-appointed body that governs the district — acknowledged that "successive belt-tightening had reduced the ability of the school district to track and monitor" its grant funding.
Federal officials said they were unaware of any other suspicions regarding the use of SIG funds for back-filling. Jason Snyder, who heads the turnaround office at the U.S. Department of Education, reported that at least 12 schools had their grants terminated or not renewed for performance reasons.
"Some states and districts have taken the courageous and rare step of terminating grants where the money is not being used well," he said. "It's important that the funds go to those schools committed to using them effectively to help their students and to doing things differently than they have before."
Nonetheless, Philadelphia's conundrum may underscore the importance of a finding from a March report by the Center on Education Policy (CEP), an independent education think tank. While more than half of 46 states that responded to a survey indicated they had adequate levels of staff expertise to help SIG recipients, only slightly more than a third felt their state had adequate amounts of staff and time to assist with program implementation, including monitoring.