Widespread lies about family income could affect funding, fees at some CPS schools, watchdog finds

Chicago Public Schools’ top watchdog found widespread lies and omissions on family income forms that identify low-income households, which could affect how much funding district schools receive and whether some school fees are waived, according to a report released Wednesday.

Some affluent families driving expensive Mercedes-Benz cars were found trying to receive low-income designations to gain fee waivers. And even hundreds of district employees — including some school administrators who make six-figures — omitted their CPS salaries to gain eligibility.

The form, which families fill out every year, formerly was used to identify students who should receive free or reduced-price school lunches. Since 2015, all CPS students have received free lunches regardless of family income.

“But abuse of the form has continued because [the] status still impacts schools and families,” CPS Interim Inspector General Amber Nesbitt’s office wrote in its annual report published Wednesday.

Among the investigation’s major findings, the IG’s office found that 619 of the 880 CPS employees who are parents marked as low-income — or 70% of those employees — actually made too much money to qualify. Of that group, 134 made more than $100,000 annually at CPS. That's without taking into account spouses’ salaries.

The inspector general’s office said many of those CPS employees might have omitted or understated their incomes on 2023-24 forms. But there could be reasons why some were valid.

“Of course, this analysis is based purely on CPS salary and household size information,” the IG’s report said. “Some students identified this way could have been legitimately eligible due to their status as foster children or because they were living with an estranged parent who met income standards.”

CPS employees weren't the only ones found to have potentially lied about their income. But analyzing their cases was easier for the IG since salary information is readily available.

“Districtwide, more than 250,000 CPS students are eligible, with roughly 54,200 of them due to a [family financial information form] and the vast majority of those students are not the children of CPS employees,” the report said. “The OIG has talked to non-CPS employee parents who admitted understating their income on [forms], however, the OIG’s analysis was unable to assess systemwide extent of possible fraud by such parents because their salaries are not easily accessible.”

Inaccurate forms could have ramifications for schools because CPS still takes into account a school’s share of low-income students when distributing funding. In response to the IG’s investigation, CPS said it will no longer use the free- or reduced-lunch form in its school funding formula.

In one particular case, investigators found that two clerks incorrectly labeled at least 88 students as free-and-reduced-lunch eligible in the 2018-19 and 2019-20 school years, resulting in increased funding of between $81,054 and $135,090 for their school over the two years, the report said. One family of four marked as low-income had an annual household income of $330,000. The federal threshold for reduced-price meals is about $30,000.

The inspector general recommends firing one of the clerks and disciplining and training the other. Both resigned.

There are also individual benefits to families misrepresenting their income: Those with a low-income designation can be exempt from school fees, which sometimes add up to hundreds of dollars every year. Depending on the school, there might be fees for: school activities, technology, band instrument rentals, sports participation, graduation, college admissions testing and college applications.

Administrators at one CPS selective-enrollment high school told investigators that dozens of parents every fall ask to revise their forms to try to qualify for low-income status to avoid college application fees, which range from $25 to $125.

“I think [parents] just submit it over and over until they get it right,” one administrator said, according to the IG’s report.

Another official at the selective-enrollment school said: “We’ve even had people come to school and they are driving a Mercedes and asking for fee waivers.”

A major problem with the free or reduced-lunch form, according to the IG’s office, is that it doesn't require any proof of income. And CPS officials don't audit families’ submissions, the report said. No officials are even responsible for overseeing the form.

“Numerous CPS officials told the OIG that no one at CPS has ‘ownership’ of the [form], even though its entries have been the subject of repeated substantiated OIG cases for more than a decade,” the office said.

The district also plans to examine school fees and whether any changes need to be made, such as proof of income for fee waivers.