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Holes in the Department of Education’s oversight of tutoring companies that work in city schools allowed one of the companies to collect payments without proving it had delivered services, according to an audit by Comptroller John Liu.

Liu found that Champion Learning Center collected about $860,000 in the 2009-2010 school year for tutoring students who had not signed into tutoring sessions or for tutoring sessions that officials had not certified had taken place.

The audit highlights the murky world of “supplemental educational services” providers, companies that offer tutoring mandated under the No Child Left Behind law. They are private entities but are subject to a host of city and state regulations, and the city must both monitor them and give them access to students.

The audit comes weeks after the U.S. Department of Justice filed suit against another SES provider, Princeton Review, for falsifying attendance records and bilking New York City out of millions of dollars. In that case, investigators found that the company had submitted false signatures showing that tutoring sessions had taken place. (more…)

This chart from the Justice Department's lawsuit against Princeton Review shows how many times the company billed the city for tutoring students who were absent or when school was closed — and how much it was paid. (Click to enlarge)

A company hired to provide tutoring services in New York City bilked the city out of millions of dollars in federal funding for poor students, according to the U.S. Justice Department.

The department today filed a civil fraud lawsuit against The Princeton Review, Inc., alleging that the company had gotten the city to reimburse it for tutoring it had not provided. According to the suit, the company’s fraudulent claims continued even after a city investigation — never made public — turned up misconduct in 2006.

The tutoring program, known as “supplemental education services” and mandated for low-performing students in high-needs under the No Child Left Behind law, reimbursed providers based on the number of students they served. Princeton Review documented how many students it had tutored by turning in signed attendance sheets; it also gave bonuses to supervisors of tutoring sites where attendance was high. One of those supervisors, Ana Azocar, is also named in the lawsuit.

The bonus system incentivized fraud, according to the suit. Investigators found that many of the signatures showing student attendance were falsified — and sometimes names were even misspelled. The company sought reimbursement for tutoring students who were out of the country and holding sessions when schools were closed, according to the suit. At one school, the now-closed M.S. 399 in the Bronx, the company said it had tutored 74 students on New Year’s Day. (more…)