In particular Maginnis said about Kennedy, “His first target, a fat one, was the Department of Education's $615 million spent on 5,500 professional services contracts over the last five years.

   Reading from the list of $130 million in contracts from 2008-09, he barely needed to add commentary to raise eyebrows:

   -- $5,200 to Step LLC for "one-day presentation demonstrating how thinking and behaviors affect people personally and professionally as they communicate, work in teams and lead."

   -- $8,000 to "provide repository of strategies, accommodations, technology and formative assessment options to teacher use to facilitate student access;"

   -- $48,000 to "provide consulting services to the Recovery School District central office to assist with the creation of sustainable relationships with professional unions;"

   -- $94,000 to Sports 4 Kids "to provide program that will assist students to learn valuable social skills through organized play on their recess and lunch period."

   Hundreds of thousands of dollars went to consultants to deliver keynote speeches, provide public relations, conduct workshops and chair steering committees.

   "I'm sure they were good speeches," noted Kennedy. "But if we are trying to cut back, maybe we can ask the employees of the Department of Education to give speeches."

On Monday, in connection with the controversy, the Department of Education responded to these spending questions:

Over the last several days, questions have been raised relating to contracts entered into by the Louisiana Department of Education (LDOE) from 2005-2009. Issues were initially raised on Thursday, November 12, during the Streamlining Committee's Advisory Group on Efficiency and Benchmarking. Today, State Superintendent of Education Paul Pastorek responded to expressed concerns.

"Like all organizations, the Department recognizes a need to eliminate expenses that are not of high value or that could be achieved more efficiently," State Superintendent of Education Paul Pastorek said. "Through the agency's reorganization and  the implemenetation of new policies, we are working to focus financial resources on those activities that have the potential to measurably impact student achievement. And we are measuring and benchmarking outcomes to ensure effective utilization of funds. At the same time, we are not satisfied with our progress. We know we can do better."

Pastorek, who became State Superintendent in March of 2007, pointed out that over the last ten years the number of LDOE employees has been reduced by 25 percent. Pastorek said the agency is attempting to streamline its activities, without compromising its effectiveness.

"Many of the contracts in question are executed in an attempt to outsource services that are needed on an interim basis. This allows us to avoid hiring permanent employees," Pastorek explained. "As the agency moves away from a compliance organization to an agency that supports the ability of districts and schools to achieve better outcomes, we are expending more resources on strategies to build their capacity, which is largely accomplished through short-term activities and agreements."

Pastorek emphasized the commitment of the Department, BESE and other policy makers to ensure taxpayer dollars are spent responsibly and with integrity.

"We appreciate the need for transparency in everything we do," Pastorek continued. "Additionally, we want to ensure a fair and unbiased process for awarding contracts for all programs and services. In fact, last year, the Governor's Office and the Legislature tightened the process that guides NGO (Non-Governmental Organization) participation in the state's After School for All program, which is supported through federal Temporary Assistance for Needy Families (TANF) dollars. Specifically, districts were given decision-making authority and the responsibility to ensure academic rigor and accountability are achieved through the after-school tutoring programs. This is just one example of how we are working to ensure taxpayer dollars are being leveraged to achieve maximum impact. And we look forward to continuing our work with policy makers and the education community to identify ways that we can be more efficient and effective in our work."

Today, LDOE officials addressed several key points:

Public Review and Authorization of Contracts

• Prior to submission to the Board of Elementary and Secondary Education (BESE) and the Division of Administration (DOA), all contracts are reviewed by the Louisiana Department of Education's (LDOE) Internal Contract Review Committee, which is comprised of professionals from the agency's legal, auditing and finance offices.  This committee reviews contracts under consideration to ensure they meet the following criteria:  1) funds are available and appropriate; and 2) components of contracts are in compliance with statutory requirements and BESE policy.
• BESE conducts a public review of all contracts executed by LDOE during their monthly meetings, regardless of value.  This review process often unfolds through hours of discussion, when BESE members review and analyze contracts entered into by the LDOE.
• All LDOE contracts are in compliance with statutory requirements.  Those contracts that exceed $50,000 that require a competitive process are awarded through an RFP, with the exception of RSD contracts.  BESE adopted a procurement policy for RSD relating to services that require a competitive process. Prior to FY 08, all contracts exceeding $25,000 were approved by BESE.  After that time, all contracts exceeding $50,000 are approved by BESE.  Every contract must be reported to BESE for review. 
• As required by statute, contracts in excess of $20,000 must be reviewed and approved by DOA's Office of Contractual Review.  However, in 2007 the Recovery School District (RSD) received legislative authority to procure services in the same manner as a local education agency, which does not require DOA approval. 
• Upon completion of each contract, the agency does a thorough "Contract Performance Evaluation". This encompasses a summation of the services, the utility of the final product, listing of any problems encountered, and a critique of the overall performance.

Allocations

The total amount of funds, $615 million, was allocated over a five-year period. Although contractual allocations increased in FY 2008, it was largely due to the need to establish systems and capacity in the RSD, where most schools re-opened during the 2007-2008 school year, and due to support provided to hurricane-affected districts and schools. Also, it is important to note that contracts authorize spending; however, the amount actually expended over the five-year period was $507 million. Unused funds either reverted back to the state general fund or were carried over to the next year, depending on whether the source of the funding was federal or state.

Allocated LDOE Contracts (Annual Totals):

• FY2005 - $137,162,075.56
• FY2006 - $79,540,723.49
• FY2007 - $106,782,489.10
• FY2008 - $162,205,280.17
• FY2009 - $130,083,012.42

Sources of Funding

The majority of these contracts are funded with federal dollars. Forty-two percent, or $215 million, of the expended funding was forwarded directly to LDOE from the federal government. The largest allocation, totaling more than $70 million, flows out of LDOE through 21st Century Grants Funded through Title IV dollars, 21st Century Grants pay for after school tutoring programs for at risk students.

Another 23 percent of the contractual total is forwarded to LDOE by way of interagency transfers, through a combination of federal and state funding. LDOE is required to follow federal and state regulations in awarding these contracts, including providing support and technical assistance to local districts and schools that participate in these programs and services.

Thirty-four percent of the $507 million was expended through state general funds.

One percent of the amount is provided through self-generated funds.

Funding Purposes

The contracts in question primarily fall into two categories:

Programmatic Services - Most of these allocations are programmatic and fall outside of what is considered a traditional professional service contract. These are administered through sub-grants made to local districts and other partners. For example, professional development programs that are designed to improve teacher effectiveness at the local and district level would fall into this category. Also, contracts awarded to NGOs, such as 21st Century grants, fall under this category.

Agency Support - LDOE enters into a contract for professional services in those cases where expertise is required outside the capacity of LDOE staff, and on a short-term basis. Rather than hire additional permanent staff to support these needs, the Department outsources to secure the necessary services. For example, this would include services for outside auditors, as required by state and federal regulations.

Accountability

Last year, through the authorization of the Governor's Office and the Legislature, LDOE and BESE developed and implemented policies to ensure funding awarded to NGOs through federal and state grants is expended for activities that effectively contribute to the educational enrichment of students. To ensure academic rigor and accountability, funding for these programs is now allocated to districts. Local districts are empowered to administer these programs, either directly or through the selection of an NGO. Districts must demonstrate appropriate and effective use of these funds and provide evidence that programs and services made a positive impact on student achievement.

Also, please refer to section Public Review and Authorization of Contracts for other points around accountability.