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In this nearly deserted town on the Missouri border, locals live with the losses that chip away at a community. The dilapidated toll bridge linking Venice to St. Louis closed in 2001; the World War II-era power plant shut down in 2002.

Now Venice may lose its tiny school district. In an unprecedented move, the Illinois State Board of Education is preparing to shut it down because of mismanagement so severe that the local school board was removed and the FBI is investigating.

Waste and incompetence ran rampant while most students failed state exams and special-education students didn’t get adequate services, local and state officials say. More than $500,000 in bills went unpaid, though the district was flush with cash, finance records show.

“This is one of the worst cases of district mismanagement and lack of performance that I’ve ever seen,” said State Supt. of Education Robert Schiller, who visited Venice last month and had to step in to teach a high school math class. The teachers, he said, couldn’t solve a basic problem involving percentages.

Education officials say the crisis illustrates the failings of a statewide system designed to protect the interests of schoolchildren. That system depends on elected regional superintendents to ensure that schools meet state standards. But regional officials acknowledge that they don’t visit schools annually, as required by law, because of time, money and staff constraints.

The Venice district went for several years in the mid-1990s without inspections, records show, while the regional superintendent relied on the district’s assertions that its two schools met standards. In 2002, inspections by the State Board of Education showed the district had been operating with unqualified staffers, inadequate services and deteriorating facilities for its children, most of whom are poor and black.

Now Schiller has ordered state funds to the district cut off–effectively closing its doors–at the end of the school year. The district’s 212 high school and elementary students would be transferred to other districts.

It would be the first time that Illinois has shut down a local district because of mismanagement, education officials say. The tiny island district of Kaskaskia in southern Illinois was dissolved in 1989 after it had already closed its only school and transferred students elsewhere.

But Venice is fighting to save its district, appealing to Schiller to let the school stay open on probation while a new administrative team makes improvements.

`Part of the foundation’

From her house on Washington Street, Evelyn Harris can see the worn brick Venice school building on Broadway, built as a high school in 1917 and later expanded to include a grade school. She and her husband graduated from Venice High in the 1970s; her children graduated in the 1990s. Her nephews attend the grade school now, and she serves as PTA president.

“It’s part of the foundation of the community,” Harris said.

Today, a stillness shrouds the building, so much so that passersby might not know school is in session. Inside, portraits of graduating classes dating to the 1920s line the walls.

But some classrooms are nearly empty–the grade school’s graduating class this year has only eight pupils. Teachers talk about working with outdated books in worn-out facilities.

Yet the school has a charismatic new principal, James Edmond, who began in December and dug himself in, learning the names of every student, reading to a 1st-grade class and helping coach basketball–one of the few extracurricular activities.

The students want what children elsewhere get, he said: more sports and clubs, a high school prom.

“I told them we’re going to have as normal a school year as we can,” Edmond said.

Schiller won’t decide on the district’s appeal until after the Tuesday elections, when Venice voters will consider a $500,000 bond issue to cover expenses and unpaid bills.

At the end of 2003, the district owed $515,807, including $204,000 to the federal government for employee taxes, and $230,807 to area districts that had provided special-education services to Venice children, records show.

Also on the ballot is a question about whether to close the high school, which has struggled to maintain its building, attract qualified teachers and provide college prep classes. Only 60 students attend now. The grade school–where test scores are low but improving–would stay open.

But if Schiller rejects the appeal, the balloting could be moot. Both schools would close, unless the district can persuade the Illinois State Board of Education to overturn Schiller’s decision.

Some blame superintendent

In a state with a strong tradition of local communities running their schools, the superintendent is being viewed by some as a troublemaker rather than a savior.

“We don’t need a guy making $225,000 … who is not from Illinois telling us how to run things,” said Harry Briggs, the regional school superintendent of Venice and other Madison County districts.

As the elected official in charge of ensuring that schools in the region meet state standards, Briggs is being accused of not moving aggressively to fix problems in Venice.

“I have not seen the regional office being responsive,” Schiller said.

Briggs defends his performance, citing his efforts to get the district a $500,000 grant in 2002 to improve its school building.

He said the Venice crisis began in the mid-1990s, when the district’s longtime superintendent retired and a string of superintendents followed, along with some school board members who realized “that there is power in controlling jobs.”

“Over time, a number of people took control and started making changes that weren’t educationally sound–padding payroll, hiring relatives, not paying attention to paying the bills,” Briggs said.

Former board member Carolyne Wilson said she tried repeatedly and unsuccessfully to get answers about district finances, beginning in 2001, and ultimately took her concerns to state and federal authorities.

“The money didn’t look right,” Wilson said. “Nothing was being paid,” including federal payroll taxes and mandated teacher-retirement payments.

She blamed Briggs’ office, as well as the state board, for not stepping in sooner.

Briggs, Schiller and new Venice Supt. Richard Basden said the FBI is investigating. Schiller said the inquiry relates to actions of past board members. As is its usual practice, the FBI would not confirm or deny an investigation.

Residents say they didn’t realize the extent of the problems in the district.

“People really didn’t know what was going on,” said Venice City Clerk Wilbert Glasper, a school board member until about a decade ago. “It was a snowball that was rolling and picking up speed.”

Financial woes deepened

By the end of the 2003 budget year, the district was able to make ends meet only because it had borrowed against future tax collections, financial statements show. Accounting records were in such disarray that auditors refused to endorse the district’s figures.

The state board stepped in, approving a special financial oversight panel for the district in late June, followed by a $250,000 emergency loan. In October, the oversight panel voted to replace the entire school board–a first in Illinois history–because it couldn’t come up with an adequate budget. Wilson and another board member resigned before the board was removed.

Although questions remain about where the money went, statewide financial records show the decline in Venice was never about lack of revenue. The district benefits greatly from state and federal aid funds because most of its children are poor.

In 2001-02, the district spent $11,534 per pupil, more than all other kindergarten through 12th grade “unit” school districts in the state. By 2002-03, spending in Venice had risen to $15,405 per pupil. Although those numbers may seem high, Briggs said, it costs more to educate disadvantaged students with special needs.

Inspection records show Briggs’ staff did only two comprehensive inspections of Venice schools during a critical period when the district was in decline–one in April 1996 and one in March 2001.

The reviews ensure schools comply with state standards for teacher qualifications, course offerings and other requirements. In 2001 Briggs’ office found only seven areas of “non-compliance,” including a lack of documentation to assure teachers were qualified.

State officials visited in November 2002 after getting complaints from Venice parents about children not receiving required courses, said Don Full, who oversees the state board’s accountability division. One parent of a special-education student said the child had not had a teacher in 17 days, he said.

The state’s review found more than 50 areas of non-compliance, records show, from problems providing special-education services to school administrators not being certified to the building not meeting safety codes. The district was placed on probation.

Briggs said he is aware of the law requiring regional superintendents to visit schools at least once a year to check general conditions, including instruction and textbooks. But he cited state administrative rules that give regional superintendents flexibility on inspections.

Though annual visits are required, Briggs’ practice is typical around the state, said P.E. Cross, a regional superintendent who is past president of the Illinois Association of Regional Superintendents of Schools. “It’s probably something we need to address,” Cross said.

In Venice, an outside firm is monitoring district business functions and administrators are making improvements.

Kim Stuby, a 7th-grade teacher, is optimistic about the district’s future.

“We all realize we aren’t where we need to be, but my goodness, things have improved so much,” she said. “I think this district can be salvaged.”