Schools' chief information officer ousted

February 11, 2000

BY ROSALIND ROSSI EDUCATION REPORTER

The Chicago public school system's chief information officer--its highest-paid official--is being dumped following a preliminary audit that alleged a basic lack of controls in one of the school system's costliest departments.

Richard Koeller, whose $175,000-a-year consultant's salary earned him $25,000 more a year than schools chief Paul Vallas is paid, will be leaving the system in a month, Vallas said Thursday.

Koeller will be cut loose four months before his June 30 contract ends as overseer of the computer, phone and information management systems for the nation's third-largest school system. Vallas said costly and critical information technology decisions must be made soon, and he needs a change now.

Although Mayor Daley has pushed privatization of city departments for years, Vallas said Koeller had "overprivatized" his department by handing over too much control to outsiders and not watching them closely enough.

"It's like playing Russian roulette," Vallas said. "No one's gotten shot yet, but it's just a matter of time."

Schools Inspector General Maribeth Vander Weele said Thursday that a preliminary review commissioned by her office showed Koeller's department suffered from weak inventory, record-keeping and management procedures.

"There was a basic lack of controls in a very costly and highly technical area," Vander Weele said.

Under Koeller's watch, Vander Weele's report indicated, a $2.4 million contract to Sperco Technology Group to manage the system's telecommunications department had been expanded to the point where Sperco, a contractor, was overseeing other subcontractors and $6.5 million in equipment purchased from another contractor.

"We believe that for-profit companies should be managed by Chicago public schools, not another contractor," Vander Weele said.

Vallas said he disagrees with some preliminary findings in Vander Weele's report and is still investigating others. However, he said he was concerned that Koeller was not able to answer some serious questions raised in the report.

"I'd ask Rich [Koeller] something, and he'd ask a consultant," Vallas said.

Vallas also charged that Koeller has yet to produce a disaster recovery plan to keep vital information systems running in the event of a natural disaster, triggered a payroll snafu that inconvenienced 900 employees over Christmas break, and left the system's mainframe computers inadequately secured while the system moved its headquarters from Pershing Road to 125 S. Clark.

According to Vander Weele's report, investigators were "able to walk into the new data center unescorted and unquestioned during normal business hours" and handle valuable equipment and data. The area has since been secured, Vallas said, but other staffers are now checking on its security from hackers.

Vallas said Koeller did not conduct the kind of audits routinely commissioned by other high-ticket departments or properly evaluate whether the School Board could trim its consultants or contracts. By overprivatizing, Vallas said, Koeller left the system thin on in-house knowledge and oversight and made it "vulnerable." Instead, he said, two committees were formed to oversee technology and critical E-Rate Internet reimbursements.

"We brought him in to straighten out the bureaucracy, and we found ourselves creating the same bureaucracy, but with consultants," Vallas said. "The guy was not managing anything."

Nearly two years ago, Vallas and others touted Koeller's appointment as chief information officer as a coup. They had lured him away from a higher-paying job as CIO at Nissan Motor Corp. in Gardena, Calif.

Koeller, who has been on leave with pay since Jan. 24, declined comment this week on the Vander Weele report.

Vallas praised him for monitoring a smooth computer transition into the School Board's new offices and keeping the system prepared for Y2K. He said Koeller will return to work Monday to conduct a "30-day exit review" before his departure.

http://www.suntimes.com/output/news/cio11.html

-- Martin Thompson (mthom1927@aol.com), February 11, 2000