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Major payroll improprieties alleged at Fort Hamilton High School

A scheme to underpay more than a dozen teachers at a Brooklyn high school has landed the school’s longtime principal under investigation.

The scheme, which investigators have been probing since this spring, could also put Fort Hamilton High School on the hook for hundreds of thousands of dollars in back pay to teachers so desperate for a position that they accepted one with low pay, no benefits, and little security.

The Department of Education’s Office of Special Investigations is in the process of investigating Jo Ann Chester, principal of the Bay Ridge school since 1999, a department spokeswoman confirmed. Sources close to the investigation say investigators have been digging into payroll practices at the 4,200-student high school since at least April. The school was already under investigation because of test scores that the city deemed suspicious.

Last week, a grievance from a teacher who had been underpaid was sustained, entitling him to back pay, union officials confirmed.

The scheme allowed Chester to circumvent three-year-old hiring restrictions and blocked the school from being assigned short-term substitutes from the Absent Teacher Reserve, the city’s pool of teachers without permanent positions. It also saved the school hundreds of thousands of dollars.

According to multiple sources, Chester contrived a system to use substitute teachers for more than a year at a time without adding them to the school’s teaching roster, which would have required them to be paid more, or bumping them up to different pay rate for long-term substitute teachers.

Then, she fudged documents to make sure that the teachers did not show up in the Department of Education’s payroll system, the sources said. On daily attendance sheets and student report cards, Chester replaced each substitute teacher’s name with the last name of an assistant principal and the first initial of the first name of the sub.

“It looked like the supervisors taught about 40 classes during the year,” said a union official familiar with the investigation.

Chester did not respond to multiple requests for comment made by phone, email, and at the school.

The main goal of the system, according to a Fort Hamilton teacher who would speak only on the condition of anonymity, was to allow new teachers to start working in the school despite systemwide hiring restrictions.

The restrictions, enacted in 2009 to cut costs, have required schools to hire from within the city’s current teaching corps for most positions. Except at new schools, newly minted teachers in English, social studies, and several other license areas have had little opportunity to break into the system.

“The school wants to hire the teachers, but they can’t. So that’s why they’re still substitutes,” said the teacher, who said he worked with a long-term substitute whose tasks were no different from his own. “You’re stuck with this hiring freeze. A school says, ‘Look, we’ll hire you full time until the hiring freeze is over, then we’ll see what happens.'”

It is not uncommon for school leaders to skirt the hiring rules from time to time to ease in favored candidates, according to the principal of another large high school. But the principal said the skirting usually happens only in very limited circumstances, such as when the school wants to hold on to an excellent student teacher for a year until a position opens up.

Informed that Chester might have hired at least 14 teachers in this manner, the principal expressed shock, saying, “Everybody does it, but nobody has done it to this degree.”

And other motivations might have been at play. A union source said Chester had not interviewed a single member of the Absent Teacher Reserve for vacant positions, even after the city began requiring schools to interview any teacher in the pool who put in an application for an open position.

By making it appear that full-time teachers were assigned to every class, the school avoided being assigned members of the ATR pool in the last year, after the city began cycling them weekly into schools with vacancies.

The city wants principals to hire ATRs whenever possible, because their salaries are already on the city payroll. But schools that hire the teachers, who lost their positions when their schools shrunk or closed, must foot the bill for their salaries. It is less expensive for principals to pick up brand-new teachers whenever possible.

But because of its payroll tactics, Fort Hamilton did not even have lay out the $45,000 that a first-year teacher earns. Instead, the school shelled out less than $30,000 a year for each of its long-term substitutes.

That’s because of the way substitute teachers are paid. They earn a set amount each day — this year, $154.96. But if a substitute covers a single class for 30 days or more in a row, he jumps to a much higher pay rate. For long-term substitutes, the daily rate is 1/200th of what the teacher would earn if he were on the school’s payroll fulltime. Someone with just a bachelor’s degree in his first year of substitute teaching would take home $227.65 a day, with the pay rising up to $305 a day for people with several years of experience and advanced degrees.

Fort Hamilton’s long-term substitutes all sat at the low end of the pay range, according to the union official. The official said the union is encouraging the teachers to file for backpay, but many have yet do so.

Staying at the short-term rate all year would bring a substitute teacher about $27,000. Paid at the higher rate, even a first-year substitute would take home more than $36,000. Long-term substitute teachers also accrue vacation days and sick days, which short-term substitutes do not get.

At Fort Hamilton, multiple sources say, Chester made sure that no substitute teacher hit the 30-day mark — at least officially. But they would return to the class on the 31st day with the clock reset.

There are safeguards against improper budgeting and payroll practices both centrally at the Department of Education and in the networks that schools hire to support them, according to the DOE spokeswoman, Marge Feinberg. She said there are procedures in place to make sure that principals hire teachers who are certified and have appropriate licenses for the positions they are filling, as well as safeguards to keep uncertified teachers from being paid as teachers or allowed to substitute.

The long-term substitutes at Fort Hamilton all held teaching licenses, according to the union official.

Why the department launched the payroll investigation is not clear. But budget documents available on the school’s Department of Education website have for years suggested an outsized reliance on substitutes — and they also reflect a possible crackdown on the practice this year.

The documents show that Fort Hamilton boosted its budget for “absence coverage” during lean budget years when most schools were reducing their spending on substitute teachers. In the 2006-2007 school year, the school budgeted just over $300,000 for hiring substitutes. That was just a little bit less than what DeWitt Clinton High School, a Bronx school with a similar enrollment, budgeted that year.

But after three years of budget cuts that had record numbers of principals saying they could not open their schools without extra funds, DeWitt Clinton had slashed its budget for substitutes to just $75,000 last year. Fort Hamilton had increased its spending on subs — to $664,000.

For the current school year, which began July 1, Fort Hamilton has said it will spend more than $300,000 on substitutes — still far more than other large schools, but less than half what it spent last year.

Sources close to the payroll investigation say that it seems to be in its final stages.

But it is not the only inquiry facing Chester and Fort Hamilton. The Department of Education referred the school to the city’s Special Commissioner of Investigation in February after an internal audit concluded that some Fort Hamilton students had gotten passing grades on Regents exams when they should have failed.

Of 60 schools audited because they had posted unusual or striking performance results, Fort Hamilton was just one of two referred to SCI because of inflated Regents scores in multiple subjects.

A 2011 Wall Street Journal report revealing that a disproportionate number of city students are given Regents exam grades just over 65, the passing score, specifically named Fort Hamilton for awarding virtually no grades just below the cutoff.

SCI currently has an investigation open at the school, according to a spokeswoman.

Fort Hamilton is among the city’s largest high schools and one of few that continues to admit students largely based on where they live. It has received B’s on each of its last three city progress reports.