Chicago Public Schools Paid $28.5M to Bus Companies, Workers Laid Off Anyway

The plan seemed sound: use funds during the COVID-19 pandemic to pay busing companies during remote learning, expecting them to keep paying drivers and aides ahead of the day when they could resume carrying students to schools.

But Chicago Public Schools leaders didn’t place any written conditions on the distribution of $28.5 million to 14 busing companies in 2020.

“Without anything in writing to the contrary to guide them,” a report issued this week by CPS Inspector General Will Fletcher states, “10 of 14 CPS bus vendors proceeded to lay off more than 600 bus drivers and bus aides for varying amounts of time during three months of CPS school closures that began March 17, 2020.”

The inspector general’s report doesn’t specifically identify any of the busing companies.

The report also indicates that nine of those bus companies also obtained a total $13 million in federal Paycheck Protection Program (PPP) loans, which could be forgiven if a certain amount went to payroll. Of those nine, the report states, eight laid off workers and may have entitled them to an extra $600 per week in unemployment benefits.

“If those laid-off workers received such benefits, that would mean three different sources of taxpayer funds could have been intended to cover the same bus vendor wages,” the report reads.

The three months of CPS funding, Fletcher found, was given without conditions and without a plan “for communicating its intentions for the payments and it established no controls to make certain its objectives were achieved,” according to the report.

The Illinois State Board of Education had urged school districts to work with bus vendors. The state superintendent said districts could amend busing contracts to guarantee the payments.

Instead, one top CPS manager said in the report: “We assumed the businesses would do right by their people if the district did right by the companies.”

As a result, the report states that the district’s “failure to set written conditions on its good-faith payments or to institute any controls unleashed a series of unintended consequences.”

After the inspector general alerted CPS to these issues in September 2020, the district conducted a bus vendor payroll audit and PPP reconciliation.

“This eventually led to bus vendor written agreements to repay CPS roughly $3 million,” the report states. “Due to this important work by CPS, vendors agreed to compensate CPS for PPP payments that would have duplicated CPS good-faith payments and to reimburse CPS for failing to adequately pay drivers and bus aids during school closures.”