Education

CPS Paid Back $1.2M to US Department of Education After Years of Falsified Grant Applications, Watchdog Finds

Chicago Public Schools had to pay back nearly $1.2 million to the U.S. Department of Education after an employee repeatedly falsified data on federal grant applications over the course of multiple years.

Those findings were included in an annual report published Wednesday by the school district’s Office of Inspector General (OIG), which is tasked with investigating allegations of CPS employee misconduct.

According to Inspector General Philip Wagenknecht, a CPS program manager allegedly engaged in repeated grant fraud by overinflating the number of students enrolled in their program in order to pull in additional federal funding for the district’s American Indian Education program.

“CPS takes its ethical responsibilities seriously and is committed to transparency in all grant processes,” a CPS spokesperson said in a statement. “The District has agreed to repay funds to the federal government because it could not fully verify historical documentation related to the collection and submission of data confirming the identification of American Indian students as part of its application for the American Indian Education grant.”

The OIG launched an investigation into this specific program — which is not identified in the report — and found back in 2021 that staff had a “longstanding practice” of misrepresenting tribal enrollment.

From 2017 to 2020, the program reported that between 682-700 students were involved each year, while the OIG found fewer than 300 students total over several years, according to the report.

As part of that investigation, the program manager allegedly admitted that she’d overstated the tribal enrollment numbers, but maintained the grant applications still included an “accurate estimate based on CPS data.”

The OIG also found the manager’s supervisor was aware of the inaccurate applications and had instructed the manager to “fix the problem.” While CPS added additional oversight to the program in 2021 and instructed staff to comply with grant regulations, the manager and supervisor themselves were not disciplined.

The OIG launched a second investigation in 2023 which found that the program had reported 300 students in each of its 2022-23 and 2023-24 grant applications, as well as 275 students in its 2024-25 application.

But investigators could identify less than 100 students in the program during this period, the report states. The program manager maintained that the grant data was accurate and claimed they had documents to prove it, but after multiple requests to provide that info, the manager failed to supply any corroborating evidence, the report states.

While the investigation was ongoing, the manager filed a revised grant application for 2024-25, now claiming there were only 130 students enrolled, however the OIG claimed even this lowered total still “significantly overstated” the actual enrollment level.

CPS subsequently fired the program manager at the OIG’s recommendation and placed a “Do Not Hire” designation on both her file and the file of the program’s former department head, who resigned following the first investigation.

After launching its own investigation into the program, the Department of Education in July found that CPS had received $1,194,935 in federal funding from 2016-2023 based on those falsified enrollment figures.

CPS agreed to pay that amount back using “non-federally sourced funds” on Oct. 26, the report states. While CPS did not apply for the grant this year, the district has said it plans to hire a new program manager and apply again for the 2026-27 school year.

CPS added that it has worked “closely and cooperatively” with the Department of Education’s Office of Indian Education to review past practices and implement a more accurate system for collecting voluntary tribal enrollment information.

The district claimed that staff never misidentified students of other races or ethnicities as American Indian and maintained that paying back the federal funds “should not be viewed as a fine, but rather as an agreement made in collaboration with the U.S. Department of Education.”

“Our CPS administrators, teachers, and staff remain deeply committed to supporting American Indian students and increasing engagement with families and tribal communities,” the district spokesperson said.

Additional OIG Investigations

The OIG report also highlighted the results of several other investigations into CPS employee misconduct.

That includes findings of adult-on-student sexual abuse, such as the case of Brian Crowder, the former dean of students at the Greater Lawndale High School for Social Justice, who repeatedly victimized an underage student for years.

Crowder was convicted of criminal sexual assault in and sentenced last year to 22 years in prison. In December, Chicago’s Board of Education approved a $17.5 million payment to settle a lawsuit brought by the victim.

Wagenknecht’s office also identified one CPS principal — with a $140,000 annual salary — who defrauded the COVID-era Paycheck Protection Program through two fraudulent loans totaling $41,000, and a second principal who fraudulently collected $23,000 in COVID rental assistance funds.

The report also examines the “exorbitant” post-pandemic travel spending Wagenknecht’s office identified in November after CPS employees spent nearly $8 million on overseas trips, spa getaways, flights to Las Vegas and Hawaii and other travel expenses in 2024.

Since that separate report was published, CPS has disciplined two employees, including a principal who was suspended for five-days after they stayed in a luxury suite beyond the dates of a professional development conference and a clerk who submitted false info on a travel approval form.

---