The City of New York Office of the Comptroller
Bureau of Management Audit

Audit Report on the Department of Education’s Calculation of High School Graduation Rates

ME09-065A
July 21, 2009

AUDIT REPORT IN BRIEF

Download the Complete Audit Report (pdf 1,064 kb)

This audit determined whether the Department of Education (DOE) properly calculated high school graduation rates.  DOE provides primary and secondary education to over 1 million students, pre-kindergarten to grade-12, in more than 1,400 schools.  To graduate from one of the City’s 425 high schools, a general education student must accumulate 44 credits in designated subjects, pass five New York State Regents examinations, and maintain a 90 percent attendance rate.  To track the students, DOE identifies a four-year graduation cohort.

The graduation rate is calculated by dividing the number of graduates by the total number of students in the cohort who either graduated, dropped out, or were still enrolled.  Only those students who were discharged from the school system during the four years are excluded from the calculation.  According to DOE, the 2003-2007 cohort (the focus of this audit) consisted of 88,963 students, including 43,651 graduates, 17,035 still-enrolled, 18,524 discharges, and 9,753 dropouts.  Using the City’s formula, DOE reported on August 11, 2008, that the four-year graduation rate increased from 58 to 62 percent between 2005 and 2007. 

Audit Findings and Conclusions

Our audit revealed that DOE needs to institute stronger controls to ensure that official records corroborate the classification of students as graduates.  Our review of 197 sampled graduates found that the transcripts for 19 (9.6%) of them did not appear to have evidence that the students had the required number of credits overall, or in major subjects, or had passed all of the required Regents examinations needed to graduate.

Subsequently, DOE provided internal documents from the schools for the students cited.  For the most part, we were not provided with in-house transcripts or permanent record cards to indicate that the requirements for graduation were met.  Notwithstanding this lapse, the documentation provided for all but two of the students appears to support the graduation status of these students.  However, in a number of instances we are unable to determine with reasonable assurance that the documentation provided to us was actually reviewed by the schools at the time the decisions to graduate the students were made. 

We found that schools are given considerable authority with minimal oversight by DOE in determining whether State and DOE graduation standards are met.  The audit also found that schools awarded students multiple credits for passing the same course two or more times, made questionable changes to student transcripts, and did not maintain evidence that all transcript changes were properly approved.  Moreover, transcripts were changed after graduation, and it appears that some students were classified as discharged without adequate evidence to support that classification.  Finally, the audit found that the parameters set by the State for classifying students as dropouts, if not followed by DOE in a timely manner, result in a reported dropout rate that does not account for all students who have actually dropped out of school.

DOE did, however, establish a system of internal quality control reviews (i.e., data reliability checks) in an effort to ensure the accuracy of its graduation rate calculation.  DOE also engaged an external audit firm to perform some agreed-upon procedures to assist in the validation of the graduation rate.

Audit Recommendations

To address these issues, we make 12 recommendations, including that DOE:

• Establish that data in the DOE transcript system reflects that a student has met graduation requirements before a diploma is given.

• Implement controls to ensure that schools make sure that the transcripts and permanent record cards of general education graduates reflect that they have accumulated the required number of credits overall, and in major subjects, and have passed all required Regents examinations.

• Ensure that all grade and exam score changes made to student transcripts are permanently traceable in the DOE transcript system.

• Implement controls to ensure that schools only classify students as having been discharged when the discharge has been appropriately documented, and ensure that it is properly recorded in the DOE attendance system.

• Implement controls to ensure that schools follow the proper protocol and follow up in a timely manner with students who do not attend school.   

Agency Response

In its response, DOE generally agreed with nine recommendations, disagreed with one, and did not address two.  However, DOE disagreed with many of the findings upon which the recommendations are based.