Category Archives: Studies/Reports/Audits

Report: NYC Private Waste Hauling Industry Unsafe

Source: John Herzfeld, BNA Daily Labor Report, May 16, 2016 (Subscription Required)

Commercial waste work is among the most dangerous jobs in the city, according to a report released May 13 by the New York Committee for Occupational Safety and Health, a coalition backed by unions and public interest groups. The report contrasted conditions at private waste carters, which handle commercial trash in the city, with unionized city Sanitation Department operations for collecting residential trash. Non-union commercial waste companies, it said, “routinely violate legal requirements with impunity,” with high injury and fatality rates. Private-sector solid waste collection operations account for 85 percent of U.S. fatalities in the industry, versus local government sanitation agencies, the report said. … The report called for the city to take steps to encourage collective bargaining in the commercial waste sector. Included in the report were eight case studies of recent worker fatalities, chemical exposures or amputations in the city’s commercial waste sector, which the authors said showed employer failures to address hazardous conditions with required or recommended measures. Among the policy steps recommended by the report were pursuing criminal prosecution of waste operators where evidence indicates that a fatality was caused by willful disregard of a legal requirement or an employer’s plain indifference to employee safety. …

Campus insources workers after ongoing plans

Source: Kimberly Nielson, The Daily Californian, May 16, 2016

After seven months of protests by campus employees and students, UC Berkeley finalized plans to insource 69 campus workers from three private contract companies last week. The decision to insource workers was part of the Fair Wage/Fair Work Plan, a broader university movement aiming to support campus employees and raise their salaries, campus spokesperson Janet Gilmore said in an email. She added that campus officials have coordinated with AFSCME, a labor union representing UC workers, to work out appointment details since March. The campus has offered employment to all formerly contracted night shift and athletic custodians, as well as campus parking attendants contracted through LAZ Parking, according to Gilmore. She also noted that workers from ABM and Performance First were also given priority employment with the university. … Campus officials will also discontinue contracting additional parking or custodial workers for the remainder of the existing service agreement, extending their efforts to remedy “grotesque injustice” endured by contracted workers on campus, according to Stenhouse. …


Opinion: Union calls for reasonable reform at UC
Source: Katherine Lybarger, President of AFSCME Local 3299, Sacramento Bee, May 8, 2016

As a widening scandal involving misuse of public funds and other ethical breaches by its top brass grips the University of California, The Sacramento Bee’s editorial board criticized UC’s largest employee union for advocating greater scrutiny of potential conflicts of interest at UC (“Let’s step back from UC Davis turmoil”; May 1). The board also criticized AFSCME Local 3299 for legislation that would encourage UC elites to stop squandering public funds on private contractors that exploit low-wage workers. There are thousands of contract custodians, landscapers, food service workers and others who do the same full-time jobs as direct UC employees for a fraction of the pay and no benefits. Instead of bringing these workers in-house, UC has fought to ensure its well-connected contractors continue to profit by condemning legions of these workers to lives of poverty and second-class status. … UC has recently told the Legislature that providing livable wages and direct employment to contract workers affected by Senate Bill 959 wouldn’t cost UC a dollar more. In fact, they’ve said it might even save money since $138 million of the $345 million that UC spends on such deals is squandered on overhead and contractor profits. In other words, the editorial board’s assertions about SB 959 simply do not add up. …

Campus sheds light on rationale for insourcing formerly subcontracted workers
Source: Ericka Shin, The Daily Californian, March 30, 2016

The campus already had plans in the works to insource or fill vacant positions for at least 55 custodians prior to the recent agreement, but the March 18 decision has resulted in the campus offering jobs to an additional 14 custodians and 24 parking attendants, according to an email from Mogulof. Among these newly insourced employees are the 69 workers employed by ABM, PerformanceFirst and LAZ Parking who are being officially insourced as UC employees, according to Kristian Kim, a member of the campus’s Student Labor Committee. The agreement also stipulates that the campus will not contract out regularized parking or custodial work through June 30, 2017, Mogulof said in an email.

UC Berkeley Agrees to Hire Subcontracted Workers After Threats of Boycott
Source: Josh Lefler, The Guardian, March 27, 2016

The University of California hires at least 45 different private companies to fill staffing positions across the UC campuses in the areas of custodial work, food services, landscaping, security, parking and more, according to an AFSCME 3299 report. The same report concluded that these workers are paid as little as 53 percent less than workers who are employed directly by the University of California and do not receive the same benefits. The nearly 100 subcontracted workers, who were just recently hired by the university, were described as having “more than 440 years of combined experience working at UC Berkeley,” but were paid below the wage of an official UC employee, according to Stenhouse.

UC Berkeley reaches labor agreement on contract workers
Source: Tom Lochner, Contra Costa Times, March 18, 2016

UC Berkeley, in what one of its unions hailed as a “historic victory for contract workers,” has agreed to offer direct employment to all regular night shift and athletics custodians currently working at the institution through private contractors, the university announced Friday. As part of the agreement, the American Federation of State, County and Municipal Employees Local 3299 will end its “speakers boycott,” the university said. Under the boycott, AFSCME objected to speakers with engagements at the campus. … The union said 93 custodial and parking workers fall under the agreement. The university said it will offer to hire all campus stack parking attendants currently employed through LAZ Parking. …

Subcontracted campus workers insourced as UC employees, ending speakers’ boycott
Source: Adrienne Shih, The Daily Californian, March 18, 2016

After nearly seven months of campaigning, 69 previously subcontracted workers have officially been insourced as UC employees, ending an ongoing campus speakers’ boycott. The workers — employed by ABM, PerformanceFirst and LAZ Parking — were previously a part of the University of California’s two-tier employment policy. The campus employs some individuals directly, or in-house, while others who do temporary or seasonal work are employed as subcontracted workers, receiving reduced pay and fewer benefits than their directly employed counterparts.
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Audit finds defunct Akron charter school mishandled records, took state overpayments

Source: Doug Livingston, Akron Beacon-Journal, May 12, 2016

A state audit released this week cited Next Frontier Academy, a defunct West Akron charter school, for shoddy record-keeping and taking money for students it couldn’t prove existed. … Auditors could not quantify the cost of misleading enrollment figures but did ask that the shuttered school repay $47,688 in money for career education. Where the other $450,000 in state aid went remains a mystery as the state adds the misspending to the more than $25 million in penalties yet to be repaid by Ohio charter schools. Next Frontier opened three years ago in a Copley Road church; it failed to find success teaching farming to city students and sparked a state investigation. … The charter school encouraged hard work and promised to pay students for washing dishes and cooking food, which they grew through partnerships with local farms. The food was subsequently sold in area stores. But students who were promised compensation received no pay. The Ohio Department of Education approved extra tax funding to pay for the “Career-Technical Education” program. ODE began docking some of that funding in December 2015 when enrollment records didn’t add up. But auditors could find no indication that the school’s board or sponsor, Tri-County Educational Service Center, was made aware. … State auditors did discover that student records lacked birth certificates or proof of residency — items essential to ensuring students exist and that state funding is being diverted from the right local school district. …

Success Academy documents point to ‘possible cheating’ among challenges

Source: Eliza Shapiro, Politico New York, May 10, 2016

Success Academy CEO Eva Moskowitz did not approve of the finding — made by an “ethnographer” she hired to study her rapidly expanding charter school network — that some teachers at the high-performing network might be responding to the enormous pressure placed on them by cheating. … Germano’s reports and memo, along with a trove of other documents obtained by POLITICO — a separately commissioned internal draft risk assessment report, a compilation of exit interviews, and internal Success staffing records, among other documents — paint a picture of a growing enterprise facing serious institutional strain in the form of low staff morale, unusually high turnover, and the kind of stress that could drive teachers to exaggerate their students’ progress. … While Germano did not conclusively prove that teachers were cheating, he reports multiple incidents of Success staffers informing him that Success teachers may have prepared students for specific questions on internal tests, allowed students to copy answers from each other, scored their own students higher than students in other classes, and pointed to incorrect answers on exams and warned students to rethink their answers.

CIA Watchdog Finds Abuses in Use of Independent Contractors

Source: Project on Government Oversight, May 2, 2016

The Central Intelligence Agency (CIA) broke the law in its use of independent contractors, according to a four-year-old internal review that was declassified and approved for public release in March. The contents of the June 2012 CIA Inspector General (IG) audit report were revealed last week by VICE News reporter Jason Leopold. … The IG found that “a significant number” of independent contractors were being utilized in a manner that made them appear to be government employees, a big no-no under CIA and federal regulation. Additionally, the CIA acquired their services under labor-hour contracts. The IG noted that this type of contract is “least preferred,” because it provides no incentive for cost control and furthers the perception of an employer-employee relationship. …Lastly, the IG determined the CIA was not adequately documenting the reasonableness of the prices paid for independent contractors’ services. As a result, the CIA could be paying independent contractors—many of whom are former CIA employees—more for their services than it should.


The CIA Illegally Let the Wrong People Do Intelligence Work, Declassified Report Finds
Jason Leopold, Vice News, April 27, 2016

The CIA violated federal laws and its own internal regulations by hiring independent contractors for a wide variety of intelligence and national security-related work that was supposed to be performed by government employees, according to a CIA Office of Inspector General (OIG) audit report obtained by VICE News in response to a Freedom of Information Act lawsuit. The report said the CIA “relies heavily on independent contractors to accomplish important facets of its mission,” particularly at the National Clandestine Service, the covert arm of the agency responsible for clandestine operations around the world. The report, dated June 22, 2012 but only declassified last month, raised numerous red flags about the CIA’s use of independent contractors throughout all divisions within the agency, and for work performed work in areas that included covert operations and protective security services overseas. By law, that work must be done by CIA employees. … The use of independent contractors by US intelligence agencies exploded after 9/11. At the CIA, the number of contractors working for the agency at one point surpassed the number of actual agency employees. … The OIG report singled out two of the offices within the CIA for using independent contractors to perform tasks that should have been carried out by federal employees — the National Clandestine Service and the CIA’s Human Resources/Recruitment Center. The report said the latter entered into contracts with a redacted number of independent contractors “in part, to conduct phone and in-person interviews of applicants for employment within the [National Clandestine Service’s] Professional Trainee (PT) and Clandestine Service Trainee (CST) Program, which is not in compliance with applicable federal laws” or the CIA’s own internal regulations. Federal law explicitly prohibits “the use of contractors for ‘the selection or non-selection of individuals for federal government employment, including the interviewing of individuals for employment.'”

Civilian Intelligence Community: Additional Actions Needed to Improve Reporting on and Planning for the Use of Contract Personnel
Source: U.S. Government Accountability Office, GAO-14-692T, June 18, 2014

From the summary:
Limitations in the intelligence community’s (IC) inventory of contract personnel hinder the ability to determine the extent to which the eight civilian IC elements—the Central Intelligence Agency (CIA), Office of the Director of National Intelligence (ODNI), and six components within the Departments of Energy, Homeland Security, Justice, State, and the Treasury—use these personnel. The IC Chief Human Capital Officer (CHCO) conducts an annual inventory of core contract personnel that includes information on the number and costs of these personnel. However, GAO identified a number of limitations in the inventory that collectively limit the comparability, accuracy, and consistency of the information reported by the civilian IC elements as a whole. For example, changes to the definition of core contract personnel limit the comparability of the information over time. In addition, the civilian IC elements used various methods to calculate the number of contract personnel and did not maintain documentation to validate the number of personnel reported for 37 percent of the records GAO reviewed. GAO also found that the civilian IC elements either under- or over-reported the amount of contract obligations by more than 10 percent for approximately one-fifth of the records GAO reviewed. Further, IC CHCO did not fully disclose the effects of such limitations when reporting contract personnel and cost information to Congress, which limits its transparency and usefulness.

The civilian IC elements used core contract personnel to perform a range of functions, such as information technology and program management, and reported in the core contract personnel inventory on the reasons for using these personnel. However, limitations in the information on the number and cost of core contract personnel preclude the information on contractor functions from being used to determine the number of personnel and their costs associated with each function. Further, civilian IC elements reported in the inventory a number of reasons for using core contract personnel, such as the need for unique expertise, but GAO found that 40 percent of the contract records reviewed did not contain evidence to support the reasons reported.

Collectively, CIA, ODNI, and the departments responsible for developing policies to address risks related to contractors for the other six civilian IC elements have made limited progress in developing those policies, and the civilian IC elements have generally not developed strategic workforce plans that address contractor use. Only the Departments of Homeland Security and State have issued policies that generally address all of the Office of Federal Procurement Policy’s requirements related to contracting for services that could affect the government’s decision-making authority. In addition, IC CHCO requires the elements to conduct strategic workforce planning but does not require the elements to determine the appropriate mix of government and contract personnel. Further, the inventory does not provide insight into the functions performed by contractors, in particular those that could inappropriately influence the government’s control over its decisions. Without complete and accurate information in the inventory on the extent to which contractors are performing specific functions, the elements may be missing an opportunity to leverage the inventory as a tool for conducting strategic workforce planning and for prioritizing contracts that may require increased management attention and oversight.

The Long-Run Effects of Privatization on Productivity: Evidence from Canada

Source: Anthony E. Boardmana, Aidan R. Viningb, David L. Weimerc, Journal of Policy Modeling, May 10, 2016


From a public policy perspective, the social value of privatization depends on the aggregate efficiency benefits over the long term. However, most privatization studies that examine the efficiency impacts of privatization employ relatively short time frames: usually 3-years before and 3-years after the privatization. In contrast, this study examines the long run effects (up to 24 years) of privatization on productivity based on an examination of major, mostly federal, share-issue privatizations in Canada. We control for factors that might affect productivity apart from privatization by including panels of Always-SOE firms and Always-Private firms, and estimating difference-in-difference models. The major finding is that the productivity of privatized SOEs increases relative to SOEs at a decreasing rate, peaking at 14-16 years. Despite this improvement, the productivity of privatized firms continues to lag that of Always-Private firms. We consider some of the policy implications of these findings.

Do new charter schools really cost L.A. Unified more than $500 million a year? Charter and district leaders respond

Source: Sonali Kohli, Los Angeles Times, May 10, 2016

The growth of independent charter schools pulls at least $500 million from the Los Angeles Unified School District annually, according to a report the teachers union commissioned. District leaders want to respond to its findings but said Tuesday they need time. … Board members said that they and district staff had just received the report Monday or Tuesday. Charter schools are publicly funded but can be privately run. Like district schools they receive funding based on the number of students enrolled. So if students leave the district for charters, the district loses money. … The report states that the district has “a higher proportion of special education students than the charter schools (13.4% vs. 8.1%, as of December 2013).” Angel said a special education program type called Option 3, a type of funding agreement the district and charter schools created in 2011, has increased the share of Los Angeles students with disabilities in charter school. …


Union-commissioned report says charter schools are bleeding money from traditional ones
Source: Howard Blume, Los Angeles Times, May 10, 2016

A teachers union-funded report on charter schools concludes that these largely nonunion campuses are costing traditional schools in the Los Angeles Unified School District millions of dollars in tax money. The report, which is certain to be viewed with skepticism by charter supporters, focused on direct and indirect costs related to enrollment, oversight, services to disabled students and other activities on which the district spends money. … The study calculates that services to charters encroach on tax money the district intended to use for traditional schools, adding up to at least $18.1 million a year and growing. … With more education tax dollars going directly to charters, the result is a decline of more than $500 million a year — about 7% — in the district’s core budget, the researchers say. The effects of this drop are difficult to quantify because fewer students in traditional schools also means a reduced need for teachers and other personnel. But even with reduced staffing, the district faces a net loss of about $4,957 per student, the study says. That amount accounts for fixed costs, such as maintaining buildings. …

Mendocino County spent $46.8 million for mental health contracts in three years

Source: Adam Randall, Daily Journal, May 7, 2016

Mendocino County has spent $46.8 million for its contracted adult and children’s mental health services in the three years since going to a privatized system, according to a report compiled by Health and Human Services staff. … For the 2015-16 fiscal year, the HHSA’s staff report suggests $577,565 was spent for various services ranging from psychiatric care to data reporting. The figure excludes what the county spends for substance abuse disorder treatment. HHSA staff were asked by the Board of Supervisors in February to compile a full report of all mental health-related contracts, including those for Ortner Management Group and RQMC, along with subcontracts entered into by both providers, since 2013. The matter has since been referred to the Health and Human Services Standing Committee.


Grand jury: Mentally ill not getting crisis care in Mendocino County
Source: Ukiah Daily Journal, June 15, 2014

Crisis care is lacking for Mendocino County’s most severely mentally ill because of a poorly-worded contract drafted when the county privatized its mental health services, according to the Mendocino County grand jury. The county contracted out its adult mental health services to Ortner Management Group in May 2013, and, according to a report the grand jury recently released, “The imprecise language and provisions included in the contract for privatization results in ineffective services for clients who are diagnosed as Level 3, the most severely impaired.”…

Privatization of Mental Health Delivery Services
Source: Mendocino County Grand Jury, June 9, 2014

An Appearance of a Conflict of Interest in the Adoption of the Mental Health Privatization Contract
Source: Mendocino County Grand Jury, June 9, 2014

…The Grand Jury received complaints regarding perceived conflicts of interest in awarding the Mendocino County contract for the administration of adult mental health services to the Ortner Management Group. Certain individuals employed by the County with current and previous associations with Ortner had the opportunity to have undue influence in the awarding of this contract. During the investigation, the Grand Jury determined that no apparent illegal activity was carried out by any individual; however, there were sufficient opportunities for these individuals to have used undue influence in the selection process. …

WEDC To Address Recouping Money From Businesses Caught Outsourcing

Source: Laurel White, Wisconsin Public Radion, May 3, 2016

Wisconsin’s jobs agency will meet this summer to discuss efforts to recover money from businesses that have accepted state funds, despite outsourcing jobs.  Wisconsin Economic Development Corp. Secretary and CEO Mark Hogan agreed to discuss the policies at the agency’s July board meeting, according to a letter sent to Sen. Julie Lassa and Assembly Minority Leader Peter Barca on Monday.   Lassa and Barca, who both serve on WEDC’s board, requested the topic of discussion in a letter to Hogan earlier this week. … WEDC made headlines last week, after Madison’s WKOW-TV reported that W.W. Grainger, a Janesville company, outsourced jobs to Panama after collecting $50,000 in job creation tax credits. … The agency, a centerpiece of Gov. Scott Walker’s jobs creation agenda has been plagued by allegations of mismanagement and questions over its efficacy. …


Outsourcing loses Wisconsin money, jobs, state leaders work to recover losses
Source: Emily Hamer, Badger Herald, May 3, 2016

Sen. Julie Lassa, D-Stevens Point, and Rep. Peter Barca, D-Kenosha, sent a letter to Mark Hogan, secretary and chief executive officer designee of the Wisconsin Economic Development Corporation. WEDC is the organization that provides businesses with monetary assistance to help stimulate the economy. The two Democrats, who both serve on the WEDC board of directors, requested a report from WEDC on its efforts to recover money that was given to companies that outsourced jobs. … In the letter, Hogan said W.W. Grainger, one of the companies in question, earned $50,000 in tax credits from the Department of Commerce. W.W. Grainger did not maintain the jobs required in order to keep the credit, so WEDC revoked the $50,000, Hogan said. All of the credits will be paid back, he added. …

Wisconsin Democrats seek answers on WEDC outsourcing clawbacks
Source: Jessie Opioen, The Cap Times, May 2, 2016

The two Democratic lawmakers on the board of the state’s jobs agency are asking the Wisconsin Economic Development Corporation to explain what it’s doing to recover state funds from companies that have outsourced jobs. Sen. Julie Lassa, D-Stevens Point, and Rep. Peter Barca, D-Kenosha, sent a letter to WEDC Secretary and CEO Mark Hogan on Monday requesting a report on the agency’s “clawback” efforts for incentives given to companies that later outsourced positions or violated otherwise violated their agreements. … Their letter comes after a report from WKOW-TV last week that Grainger Industrial Supply had outsourced six jobs to Panama from its Janesville facility after receiving $50,000 in WEDC tax credits. Grainger is the third company reported to have shipped jobs from Wisconsin after receiving state funds from WEDC. The state hasn’t yet recovered any of those funds, although Gov. Scott Walker has called for clawbacks.

“It’s Wrong.” Democrats Propose Bill Against Outsourcing Jobs
Source: Alex Hagan, NBC 26, August 10, 2015

In an effort to keep jobs in Wisconsin, there is new legislation just being introduced to make companies ineligible to receive grants or loans from a state agency for up to five years if they outsource jobs. This bill is in response to reports corporations received state aid through the WEDC  that had laid off Wisconsin workers to outsource jobs. “It doesn’t pay for us to be contributing to companies that take our jobs in Wisconsin and then send them overseas. So the goal here is to say it’s totally wrong,” says Sen. Dave Hansen.
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Exposed by CMD: KIPP’s Efforts to Keep the Public in the Dark while Seeking Millions in Taxpayer Subsidies

Source: Lisa Graves, PR Watch, April 28, 2016

Charter schools are big business, even when they are run by “non-profits” that pay no taxes on the revenue they receive from public taxes or other sources. Take KIPP, which describes itself as a “national network of public schools.” KIPP (an acronym for the phrase “knowledge is power program”) operates like a franchise with the KIPP Foundation as the franchisor and the individual charters as franchisees that are all separate non-profits that describe themselves as “public schools.” But how public are KIPP public schools? Not as public as real or traditional public schools. New documents discovered on the U.S. Department of Education’s website reveal that KIPP has claimed that information about its revenues and other significant matters is “proprietary” and should be redacted from materials it provides to that agency to justify the expenditure of federal tax dollars, before its application is made publicly available. So what does a so-called public school like KIPP want to keep the public from knowing? …


Do KIPP Schools Boost Student Achievement?
Source: Philip M. Gleason, Christina Clark Tuttle, Brian Gill, Ira Nichols-Barrer, Bing-ru Teh, Education Finance and Policy, Early Access, Posted Online November 14, 2013
(subscription required)

From the abstract:
The Knowledge is Power Program (KIPP) is an influential and rapidly growing nationwide network of charter schools serving primarily disadvantaged minority students. Prominent elements of KIPP’s educational model include high expectations for student achievement and behavior, and a substantial increase in time in school. KIPP is being watched closely by policy makers and educators as a possible model for urban education, but existing studies of KIPP’s effects on students have been subject to methodological limitations, making them less than conclusive. We measure the achievement impacts of forty-one KIPP middle schools across the country, using propensity-score matching to identify traditional public school students with similar characteristics and prior-achievement histories as students who enter KIPP. We find consistently positive and statistically significant impacts of KIPP on student achievement, with larger impacts in math than reading. These impacts persist over four years following admission, and are not driven by attrition of low performers from KIPP schools.