Contract Abuse at Chicago Public Schools Sobering Reminder

Yesterday the former Chicago Public Schools (CPS) CEO Barbara Byrd-Bennett was indicted for allegedly steering no-bid contracts worth more than $23 million to former colleagues. Coincidentally, I had just posted earlier this week about using workflow management for vendor and contract approvals to ensure compliance.

While I don’t have the details of the CPS’s process is for managing and approving vendor contracts, perhaps they have a system and Byrd-Bennett was able to push contracts through because of her position. However it’s also possible the vendor approval process is manual and/or unmonitored.

From our perspective, it provides another example of why it’s critical to implement a contract review and approval process that is consistent, automated and compliant. If there is a bidding requirement, then it needs to be fulfilled (including attachment of bids) before the project can continue to the next part of the review process. In addition, approvals from multiple levels of management must be acquired. The checks and balances provided by an automated process can’t be circumvented, which becomes incrementally more important as the number of contracts and projects increases.

If you look at your organization’s own contract process, ask yourself a few questions:

• Do we actually have a consistent process?

• Are there gaps or a lack of oversight in the process that would allow misuse?

• Have we made mistakes when approving contracts? What caused them?

• Do we know how many contracts are being evaluated, who is evaluating them and where there might be bottlenecks?

• If we were audited tomorrow, would we have any record of the process and results?