The Education Department improperly used $283 million in state money earmarked for high-needs schools to plug a budget hole, a new report says.

Money earmarked for smaller classes, better teachers and programs for English language learners, was used to pay for shortfalls created by the Bloomberg administration's budget cuts last year, the report charges.

Albany allocated the funds to settle a lawsuit in which the court found that the state was underfunding city schools.

"It took more than a decade to do this," said Helaine Doran, deputy director of the Campaign for Fiscal Equity, which filed the lawsuit and produced the study. "This money was supposed to be spent strategically on high need kids to deliver on their right to an equal education."

By law, the money must go mainly to high poverty schools with low test scores and graduation rates and large numbers of special education students and English language learners.

Last summer the City Council restored $120 million of the cuts Mayor Bloomberg made, but most of that money went to low needs schools.

Education Department officials said they used the funds to make sure that no school lost money, regardless of its student population.

"The [state] recognizes that when you have a declining budget, [the earmarked] money has to be used to maintain programs," said Photeine Anagnostopoulos, the agency's chief operating officer.

About $30 million of the special dollars went to fund regular summer school classes. That decision deprived those schools of funds that should have been used to improve bilingual programs, add prekindergarten classes or extend the school day, the report says.
Education Department officials said that decision was legal and "kosher," but some parents were dismayed.

"The most important thing that it would have meant is reduction in class size," said Josh Karan, a member of the parent council in an upper Manhattan school district that initiated the lawsuit. "Smaller classes would mean a lot to kids in my district."

Source: http://www.nydailynews.com/ny_local/education/2009/06/30/2009-06-30_city_misspent_millions_earmarked_for_needy_schools_report.html