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N. Orleans school funds missing

The Orleans Parish school district denied requests to renovate Booker T. Washington High School. But in the kind of scandal New Orleans is famous for millions were misappropriated — possibly stolen. NBC’s Don Teague reports.
/ Source: NBC News

In New Orleans, there is a new man in charge of the troubled public school system, and some say that if he manages to turn things around it will be a miracle. A recent audit shows gross financial mismanagement — and some of the evidence is there for all to see.

THE NEW ORLEANS French Quarter is a fantasy world where tourists savor the jazz and jambalaya of the “Big Easy.”

But just a few miles away is reality for students at Booker T. Washington High School — peeling paint, exposed wiring and ceilings falling in. Even the new principal wonders why students keep showing up.

According to Principal Nolan McSwain, “We all talk about, ‘It’s about the kids,’ but when you get down here to where the rubber meets the road, it makes you wonder sometime — is it really about the kids?”

For years the Orleans Parish school district denied requests to renovate, despite annual budgets of more than half a billion dollars — including $37 million from federal taxes.

Now an audit of district finances shows there was plenty of money, but in the kind of scandal the city is famous for, it was misappropriated — possibly stolen in amounts shocking even here.

Former New York School Superintendent Tony Amato was brought in this year to clean up the mess. He estimates the amount fleeced in just four years at more than $100 million. “You’re talking about money that was literally just hemorrhaging out of our system,” Amato says. “And money that could have been used to repair this school, maintain this school. And there are 125 schools in this city just like this school.”

The amount of money that simply disappeared from this school district over the past few years is staggering. Officials are still trying to figure out where it all went, but much of that money will never be recovered or accounted for.

The FBI, whose past investigations have sent Louisiana politicians to jail, is now looking into alleged crimes within the school district — including kickback schemes and employees siphoning off millions.

But auditors also blame bureaucratic incompetence. It turns out the district was paying $5,000 yearly health insurance premiums for 2,000 people who don’t work there. And it continued paying more than a thousand employees for months or years after they left the district.

Retired teacher Barbara Foundas returned her checks, “because basically I am a very honest person,” she says. “Probably a lot of people wouldn’t keep trying to return them.”

And just as the dead are frequently suspected of voting in New Orleans elections, many were being paid by the school district.

Now, new leadership at the school board means new hope for Booker T. Washington and a new reality for the Big Easy.