By ZANTO PEABODY
Houston Chronicle
April 3, 2003

The Houston school system may have thousands more dropouts than it claims in state records, investigators have found, leading to inaccurately high accountability ratings that can translate to bonuses for employees.

In checks at 12 high schools, Texas Education Agency investigators so far have discovered that HISD employees keep terribly sloppy records and skirt state documentation laws when they claim a student leaves to get a GED. The auditors are probing 16 schools in an investigation expected to end soon.

TEA, which is investigating claims of false dropout reports at Sharpstown High School, has found instance after instance of students all over the district who quit school but were not counted, according to e-mails among members of the agency's Special Data Inquiry Unit that were obtained by the Houston Chronicle. The investigative arm of TEA has so far turned up 1,557 apparent dropouts, some from schools that reported no one had quit school in the 2000-01 school year, the most recent records available.

An HISD administrator said he had no reason to believe district employees filed fraudulent records. The confusion, he said, lies in the state's multiple definitions of a dropout. Schools have dozens of ways to code students who leave, many of whom are not officially considered dropouts.

"I would like to believe there is not a situation where people are intentionally changing the records," said Jaime de la Isla, HISD's assistant superintendent who oversees the district's dropout-prevention programs. "If it has happened, there will be consequences for that."

A dropout rate that does not come close to reflecting reality is not new for HISD or the state. In October, the district assigned a task force to come up with a more realistic way to calculate the rate. A bill in the state Legislature would align the state's dropout formula to the national one.

But TEA auditors, encountering what they called a "palpable" air of anxiety, seemed stunned at how far off HISD's statistics are.

One investigator asked if the public could handle it if TEA stripped the esteemed Houston Independent School District of its "acceptable" rating. HISD has been recognized nationally for reviving its reputation as a leading urban district, most notably by winning the Broad Prize for overall improvement.

Investigator L.T. Bailey said his findings of sloppy or missing records were "alarming."

"Are we prepared for HISD and public reaction to the finding?" Bailey wrote in a March 12 e-mail to a colleague.

Yates High School, for example, reported a 0.4 percent dropout rate for 2001. At that rate, only four out of every 1,000 Yates students would have quit school before graduation. Bailey's e-mail said investigators combing student files found 373 dropouts, more than the number who graduated from the school in 2001.

While HISD officials have publicly questioned their own dropout reports, they deny knowledge of employees falsifying records.

TEA auditors have not said school workers knowingly filed false reports, but they did find occurrences where a student whose paperwork suggested he dropped out was entered otherwise.

Missing signatures, omitted dates and improper coding have stymied the search for who's a dropout and who's not.

"In many cases, the documentation is so inadequate or disjointed that we cannot ascertain the facts of a student's withdrawal," Bailey's e-mail said.

Much of TEA's concern centers on "leaver" codes, the identifiers that tell the state why a student left school. The codes indicate reasons from military leave to pregnancy, from death to getting a GED.

Auditors converted HISD's inadequately documented leavers to code 99, the shorthand for a student whose whereabouts are unknown. Those converted records count as dropouts.

TEA changed the codes of all but 10 of the 383 students who left Yates to code 99.

In other cases, school employees said students left to earn a GED, but records did not have the required signatures from students confirming the claim.

"If it was permissible for school officials to declare intent for a student, they could state anything they please and we would be obliged to accept their word as verification," Bailey wrote.

De la Isla, HISD's assistant superintendent, said he doubts anyone in the district would intentionally deflate dropout rates. Employees by and large follow the state rules in counting students who leave, he said.

Mobile students in big cities are hard to keep up with, de la Isla said, and schools often do not know whether a student quit school or just moved. A student may leave the district at any time, but the school may not record someone as missing until the beginning of the next year. In the meantime, the student may have moved without a forwarding address or otherwise gotten out of the school's reach, de la Isla said.

"We have tried to encourage schools to do their very best to get out there and find them," he said. "Sometimes we have done marvelously well, located kids out of state and have documentation to support that. It's been difficult given limited resources. "

He also said many students who quit school are not considered dropouts by the state, a stance reflected in the dozens of leaver codes. HISD's 1.8 percent dropout rate is not much different from the statewide average, which hovers around 2 percent.

A declining dropout rate in the district is not the result of fuzzy math, de la Isla said, but a result of HISD taking great pains to cut down on students quitting without a diploma. The assistant superintendent's job was created in 1995 when then-Superintendent Rod Paige launched his Student Retention Initiative.

Reports of erroneous dropout records run "against what I have observed over last 10 years," de la Isla said. "In the 1995-96 school year, we were on warned status because of dropouts. Our accreditation was in peril. We have put much greater priority on this and encouraged schools to do a better job."

State officials acknowledge the somewhat arbitrary nature of the dropout formula. TEA calculates another dropout figure by following students from seventh grade to the end of high school. For Houston, that 12.7 percent dropout rate is not the one reflected on accountability reports.

Houston's figures are under scrutiny because of allegations of false reports at Sharpstown High School. Employees at that school earned bonuses in part because of the low dropout rate.

"When a superintendent signs off on that record, it's signing an affidavit that it is true and accurate," TEA spokeswoman Debbie Graves Ratcliffe said, declining to speak specifically about the investigation. "The allegation down there is that the record is not accurate."

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