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PT. 2 — CSCOPE — WHAT’S BEHIND THE CURTAIN?

Jan 8, 2013 by

Curtain-486x500Millions of dollars in public funds changing hands…. yet….

BY COLLEEN VERA –

CSCOPE–What’s Behind the Curtain? Part II

Part I raised numerous questions about the business side of CSCOPE but now it is time to dive deeper. Lets start with the question:

WHO OWNS CSCOPE?

To help find the answer, you need to know a little about the education system in Texas. So the teacher in me is going to give a quick review with the help of a flowchart:

https://docs.google.com/open?id=0Bwjw40FXbTIMZUpCRThkUXdMWnc

In Texas, we elect the Legislature that makes the laws governing public education, as well as collects and distributes the public funds (our money) needed to run it.

The people elect the State Board of Education (SBOE) and the Governor.

 Two duties of the SBOE are setting Texas curriculum standards and the review of educational materials purchased with State funds for Texas public schools.

The Governor appoints the Commissioner of Education who oversees the Texas Education Agency (TEA) and 20 Educational Service Centers (ESC) throughout the State. He sets the process for each ESC to elect a Board of Directors, controls the distribution of State funds to each ESC, and is responsible for their yearly evaluation.

The Board of Directors of each ESC hires an Executive Director who serves as the CEO and may employ other personnel as needed.

In 2006, CSCOPE was a new curriculum product developed by the ESCs to sell to school districts. But in 2009, 19 ESC Executive Directors transferred CSCOPE to a private non-profit corporation controlled by them called the Texas Education Service Centers Curriculum Collaborative (TESCCC.) TESCCC charges each ESC a membership fee which gives ESCs the right to sell CSCOPE to their local school districts. ESC 4 chose not to participate originally, but Pam Wells, Executive Director of ESC 4 in Houston , is now in the process of joining.

When the TESCCC sells CSCOPE to a school district, they require that all school personnel sign non-disclosure agreements to make sure no one else, including parents, is able to view CSCOPE materials.

The CSCOPE product is designed to REPLACE textbooks in the classroom even though the CSCOPE curriculum has never been reviewed by the SBOE. Instead, TESCCC bypasses the SBOE process and sells CSCOPE directly to school districts. This is possible because in the last session, the Texas Legislature changed the law and now allows school districts to use State funds to purchase educational materials that have NOT been reviewed and approved via the SBOE process.

Even though TESCCC’s Governing Board is made up of State employees who meet on State property while being paid with State funds, the TESCCC  refuses to allow the public to attend its Board meetings,  refuses to release all the minutes of its Board meetings, and the Texas Attorney General ruled that CSCOPE materials are exempt from disclosure because release could harm CSCOPE’s “ competitiveness in the marketplace.”

So that means public money produced CSCOPE, public money is used to pay a fee for the right to sell it, and public money is used to buy it. But, the public has NO right to know what is in it.

Is there a name for a scheme like that? Is it considered self-dealing? Where else in Texas are the taxpayers being scammed????

All this raises many question about CSCOPE. Questions like:

  • Who owns CSCOPE?
  • Why the need for secrecy?
  • Why bypass the elected SBOE?
  • Who allowed a public product to be transferred to a private corporation?
  • Should the government use public funds to operate private corporations that restrict public disclosure?
  • Should state employees have control over millions of dollars of public funds without any oversight from elected officials?….and so on…..

While I wait for the Texas Attorney General to rule if TESCCC must release all the minutes from its Governing Board Meetings, more questions arise from the minutes I was able to obtain:

  • What is the true mission of TESCCC and CSCOPE?
  • How did CSCOPE sell so fast?
  • How dysfunctional is the TESCCC management process?

What is the true mission of TESCCC and CSCOPE?

TEC Sec 8.002 says the purpose of ESCs is to assist school districts in improving student performance and operate more efficiently. Sec. 8.053 allows ESCs to offer any service requested and purchased by a school district.

So, if the ESCs have a product, and school districts request it, the ESC can sell it. There is no need to set up private, secretive corporations, unless…..

You read TEC Sec. 8.010: Sunset Provision

Regional education service centers are subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter,the centers are abolished and this chapter expires September 1,2015.
Added by Acts 2011, 82nd Leg., R.S., Ch. 1232, Sec. 2.01, eff. June 17, 2011

You see, in the “old days”, before DVDs and the Internet, ESCs played a role in many classrooms. For example, because it was too expensive for every school to purchase 8mm films, ESCs offered educational films teachers could simply check out. In the days before Xerox when teachers still used mimeograph machines (the copies with purple ink), ESCs offered workrooms for teachers to make professional looking posters, lettering, and other supplies for their classrooms. They also had educational reference libraries and offered a variety of teacher training workshops. There were 20 ESCs spread across the State to make it easier for all schools to have access to their services.

But the world has changed. Most of the services provided by ESCs in the “old days” aren’t needed anymore. Private Educational Service and Consulting companies have sprung up everywhere and are now competing with the ESCs for school district business. Technology changes daily and the ESCs battle against private companies to stay relevant.

The ESC Executive Directors know they have a very short window of opportunity to come up with something they can use to claim they are still relevant, or they all have to look for new jobs on 9/1/15.

What better way to claim they are not only relevant, but NECESSARY, if the majority of school districts in Texas rely on their product for curriculum, lesson plans, tests, and all teaching materials? They think, “If we closed, there would be chaos in schools across Texas!” Not so.

But, they also know that the citizens of Texas are now awake, politically active, and sick and tired of their hard-earned money going to unnecessary government agencies. So, there is an excellent chance that 20 ESCs will no longer be open all around the state come 2016.

So the TESCCC Board members could simply make money off of CSCOPE via TESCCC instead of being employed by an ESC. They could follow in the footsteps of past Board members from the Harris County Department of Education (HCDE) who have found clever ways of making money from service on their Board.

Take for example the Mayor of Katy, Don Elder. When he left the HCDE Board, he was hired as a “consultant” for one of the non-profit corporations set up by HCDE and has been paid around $100,000 every year.

Another HCDE board member, Roy Morales, uses a different technique. He is a “Business Development Consultant – commissionable /independent contractor “ for a company that has multiple contracts with HCDE and HCDE’s non-profit corporations. So after he leaves the Board in January, he can still earn income from the work he did to expand the company’s business with HCDE and its non-profit corporations.

So, what is the true mission of TESCCC and CSCOPE? To assist school districts or the Board members? To ensure the quality of education for Texas students or the quality of life of Board members?

All I know for sure is that HCDE used the same tactics that TESCCC is using to attempt to block the release of public records – arguing release would harm their business interests. But, without release of business records, taxpayers would have never known that an HCDE Board member could earn commissions from district contracts.

Could this answer the question: Why the need for secrecy at TESCCC?

How did CSCOPE sell so fast?

It took Smart Phones 2.5 years to capture 50% of the cell phone market, and people don’t need school board approval to buy one.

In sales, the average Conversion Rates is about 29%. That means 1 actual closed sale for every 3 product inquires.

To establish “monopoly power” the US Court of Appeals requires a minimum market share of 70-80%…… and…… Sec. 26 the Bill Of Rights in the Texas Constitution states that monopolies “shall never be allowed” in Texas.

Yet, in only 2.5 years, TESCCC has captured at least 70% of the Texas School District curriculum market – only 4% from possible “monopoly” status – with CSCOPE – a product that was still in the developmental stage and has never been reviewed or tested…… and……TESCCC only marketed their product at two conferences – TASA/TASB and TASA Midwinter.

That is either a sales record that belongs in the Guinness Book of World Records or else something fishy is going on with CSCOPE.

Why did at least 70% of Texas Superintendents convince their School Boards to approve funds for a curriculum product that had never even been tested or reviewed? Did these people not know? Did they assume that if it was sold by ESCs, it had the approval of the SBOE?

Or, was it sold as a product that could help to guarantee that ESCs in Texas would stay “relevant’ – and thus – stay funded?

Why would they care? Could it simply be the oldest reason in the book….$ MONEY $?

There is a very limited market for top tiered school administrators in Texas, and they watch out for each other like a fraternity. There are limited places for them to earn big bucks after leaving ISDs. If ESCs close, a gravy train of State funds dries up for them.

The current system allows them to “double dip” you might say. They can retire from ISDs earning 80-100% of their salary for life through TRS and then go to work for an ESC earning full salary under ERS. It is no wonder so many administrators around the state are getting their school boards to lobby to keep ESCs open.

How dysfunctional is the TRSCCC management process?

The minutes of the TESCCC Board meetings that I was able to obtain raise even more questions about what is going on inside TESCCC and who has oversight over the public funds they control.

 

One example of very questionable business practices is TESCCC’s dealings with a company called National Education Resources (NER.) This is what I can put together from the partial minutes released:

It appears that for the first two years, all funds from CSCOPE flowed through NER at some time. The School Districts paid ESCs; ESCs paid NER; then NER sent a percentage back to TESCCC.

Millions of dollars in public funds changing hands…. yet….

  • Months without a formal contract?

(8/10/10) …emphasis on need to have a formal contract with NER…

(10/11/10)… The (NER) contract under construction now is to simply capture the current agreement between the TESCCC and NER…

(11/8/10)… J. Bass mentioned that the draft NER contract was just finalized and reviewed by legal… (1/10/11)… G. Gibson updated the Board on the NER contract development process.

  • Contracts that “guess” performance?

(11/8/10) … Greg Gibson emphasized that this is an agreement to represent what is currently in place with NER and the TESCCC. It is an attempt , with some “guessing” to capture what is currently in place with NER in terms of performance, etc…

  • No check of the company’s financials?

(11/8/10) … D.Lovett asked if there were more specifics on the financial health and state of NER’s operation. G. Gibson said that no work was done on the financial state of NER outside of this agreement..

 

  • No required audit?

(1/10/11)… G. Gibson updated the Board on the NER contract development process. …the motion also included the elimination of the requirement to have a SAS 70 audit. Instead, TESCCC will retain the right to conduct a technology audit of NER facilities at any time. The Board unanimously approved.

 

  • Nothing in place to review billing?

(2/13/12)…A.Polin explained that some ESCs have noticed discrepancies in invoicing from NER. A Poplin asked that the Governing Board members review and confirm that they have been correctly invoiced.

 

  • No record of data collection?

(4/16/12)… A.Poplin explained that it is necessary to survey districts to find out what locally customized data is in the NER Developer. That knowledge is necessary to validate that NER has transferred all of the data to the State (CSCOPE) Office.

 

**Note: July 2012 appears to be the final month of services from NER.

 

 

Did no one at TESCCC – or the lawyers or consultants they hired – even do a simple Google search to find that NER’s address is a home in NY and that there is no company website with that name?

 

 

But concerns over the management practices at TESCCC don’t stop with NER.

 

  • TESCCC employees amending the budget and spending public funds without board approval.

(9/13/10)… W. Labay discussed the 09-10 budget, providing summary and detailed documents. SOME MEMBERS QUESTIONED CERTAIN BUDGET AMENDMENTS AND EXPENDITURES THAT WERE MADE WITHOUT BOARD APPROVAL. When it was revealed that the funds in question needed to be expended during a month when there was no Board meeting, the members agreed that a procedure must be written that delineates the actions that need to be taken under such circumstances…

  • TESCCC more concerned with making money than providing school districts with services:

(2/14/11)… The science lessons will be ready on schedule. We are releasing only the first 12 weeks because there is concern that districts will download a year of lessons and then end or not renew their CSCOPE contracts…

(3/31/11)… W. Labay also included that many ESCs are hosting event/conferences in the summer that somewhat pose a competitive risk to the (State CSCOPE) conference

(8/8/11)… C. Bayuk – Expresses that Leadership Team is extremely concerned about these vendors … because many are in direct competition to CSCOPE.

(2/13/12)… R.Beard explained that his staff asked if CSCOPE could be sold differently from the central practice of district-wide adoption.The Governing Board discussed that this would depart from original, systemic intent; …that some districts might downsize given the option.

(9/13/10)… Gibson summarized the negotiations with the three textbook publishers for contracts to align with CSCOPE. …although we were hoping to get a guaranteed amount in advance from these companies, they are not interested in paying a significant amount for nonexclusive arrangements with us ($50,000)…some in attendance wanted to continue with the process since their districts had asked for the textbook alignments. Others were concerned about the amount of resources that would have to be invested to review and approve each company’s alignment; currently we don’t know exactly how much time, effort, and manpower the review would take…SEVERAL ATTENDEES EXPRESSED CONCERN ABOUT PROVIDING WHAT COULD BE SUPERFICIAL TEXTBOOK ALLIGNMENTS TO CSCOPE IF THE MISSION OF CSCOPE IS TO CHANGE INSTRUCTION IN THE CLASSROOM…Board unanimously approved to delay negotiations… and revisit the issue at the January meeting.

  • Lack of review of curriculum materials

(2/13/12)… T. Smith stated the issue of an external review of CSCOPE is becoming more prominent in information requests. The Governing Board may want to consider the option of hiring an outside group to review CSCOPE components…The question was asked if we had any idea who might perform the external review…W.Labay stated that we could use individuals and companies who perform textbook reviews as well as soliciting statewide input.

(3/5/12)…T.Smith explained that the recommendation for an external review …an estimated cost is $75,000 per content area….A.Poplin clarified that the total cost is not included in the budget W.Labay prepared for 1212-13….The Governing Board discussed the option of only reviewing one content area or one component across all content areas to begin with.

(4/16/12)… T.Smith stated that the CSCOPE content review starts with Science only

 

So, who is ultimately responsible for this mess?

 

If we go back to the flowchart, I think you will find that we are.

 

We elected the Legislature who funds the ESCs and the Governor who appointed the Commissioners of Education.

 

If we want it clean up, we need to let those we elected know that we expect an immediate investigation of TESCCC and CSCOPE with all findings made public.

 

And,  we all need to start attending our local ESC Board meetings to make sure our money is being handled properly. We can no longer assume someone else is keeping watch. We have to step up and do the job ourselves.

 

Your local ESC can be found @ http://www.tea.state.tx.us/index2.aspx?id=2147503292.

 

Contact information for your Texas State Senator and Representative @http://www.fyi.legis.state.tx.us/

 

Contact information for Governor Rick Perry — http://governor.state.tx.us/contact/

 

Contact information for Michael Williams, Commissioner of Education –  512-463-8985

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