Community college student Ernesto Fajardo was looking for a seasonal job two years ago when a friend told him about an opening at a federally subsidized tutoring company.
After passing a background check, Fajardo, then 20, began helping struggling Sacramento students who qualified for free tutoring under the federal No Child Left Behind Act.
He said he quickly realized something was amiss with the company, which struggled financially and ultimately stopped paying him.
"They didn't give us any training," said Fajardo, who lives in Elk Grove. "They called to make sure we would turn in our paperwork. Other than that, they didn't care."
Yet this was a company that charged California school districts millions of dollars as part of a federally funded tutoring mandate called Supplemental Educational Services. Proponents of the SES program, which awards about $1,500 in tutoring to students at low- performing schools, call the service an educational lifeline.
But a decade after schools were required to offer tutoring sessions by third-party vendors, an increasing number of school districts and researchers say the multibillion-dollar system is broken.
Some of the 3,000 mostly for-profit companies across the nation offering subsidized tutoring have been rocked by high-profile scandals. Researchers who have studied the system cite lax oversight by states and complex federal regulations that limit the authority of school districts.
Most states have used federal waivers from No Child Left Behind to revamp or eliminate subsidized tutoring. California is one of a handful still participating.
"Most studies have found the program to have limited effectiveness," said Carolyn Heinrich, a professor at University of Texas, Austin, who has studied the effectiveness of subsidized tutoring since 2006.
In California, officials still don't agree about who ultimately is responsible for ensuring that students receive quality tutoring services.
In concept, parents control the process. Their selection of private tutoring was supposed to create a free market where the best companies would survive.
But parents interviewed said they get little concrete information that can help them choose a subsidized tutor, leaving them at the mercy of marketing materials.
"There is no way to compare them," said Araceli Perez, a parent in the Twin Rivers district who has advocated for families in the tutoring process. "You are given a slogan and little more."
U.S. Education Secretary Arne Duncan has raised concerns about subsidized tutoring, citing the department's own studies that have shown little or no impact for students. But the federal law he inherited from the last Bush administration puts much of the onus for monitoring and evaluating tutoring companies on the states.
Officials with California's Department of Education said they don't have the resources for day-to-day oversight and rely on districts to make on-site visits.
"We don't have enough boots on the ground to check on SES providers," said Tina Jung, a department spokeswoman. "Our job is to provide guidance and send taxpayer dollars to school districts."
California requires companies to self-report annual data on pre- and post-tests administered by tutors. The results are behind a password-protected site not available to the public.
Publicly available data includes how many credentialed teachers are used and how much the company will charge per hour, but there are no federal requirements in either area. Districts may create their own programs, but most tutoring is privately run.
Once the state approves a tutoring company – nearly 300 are on the list – the companies contract with school districts of their choice. Districts cannot disqualify a state- approved tutor unless they violate a specific part of their contract, such as failing to submit documentation.
"But, not for academic reasons," said Luis Mora, the subsidized tutoring coordinator in Los Angeles Unified. He is among those who have come to think the program isn't effective.
Title 1 funds have strings
The concept underlying the nation's subsidized tutoring program can be traced back nearly 50 years, when lawmakers and civil rights activists began calling attention to achievement disparities affecting low-income and minority children. In 1965, Congress created a pot of money called Title 1, aimed at "improving the academic achievement of the disadvantaged."
When the George W. Bush administration launched No Child Left Behind in 2001, it set an aggressive timetable for schools to raise the test scores of students in every subgroup, regardless of race or income.
Schools receiving a share of the $14 billion in Title 1 money are required to show that a set percentage of their students are performing at grade level in English and math. That benchmark has risen from roughly 15 percent of students a decade ago and will hit 100 percent when school begins next month.
A district with schools that miss the mark three years in a row must set aside 20 percent of its Title 1 money to offer students transportation to a non-failing school or free after-school tutoring.
Of the two choices, most families have selected the tutoring services.
While large tutoring companies – mostly serving middle- and high-income families – already existed, the new mandate flooded the market with nonprofit, for-profit and faith-based groups.
As the federal government spent billions for the work – $3.45 billion between 2007 and 2011 – problems arose.
A Tampa Bay Tribune investigation found that Florida districts paid $7 million last year to tutoring companies run by people with criminal records. Also last year, Dallas Independent School District officials accused five tutoring companies of fraudulently charging the district more than $500,000.
California has seen its own troubles.
The company Fajardo worked for was Arriba Education, one of three owned by Mike Carney.
Carney said he ran into financial trouble after one of his employees embezzled from the company. Complaints from his workers that they went unpaid date to 2009.
"I think while we were doing it, it was very effective," Carney said.
The state removed two of his companies from its approved list last year after three school districts raised concerns that tutors weren't showing up for lessons. The third company was removed in January after failing to submit required documents to the state.
In all, 225 workers said Carney's companies owed them nearly $800,000, according to records obtained by The Bee.
During the 2010-11 school year, Carney's companies were "going down in terms of the services they were providing," said Mora, the Los Angeles Unified coordinator.
But federal law prohibits school officials from offering parents advice on which companies have a better track record. That provision was intended to level the playing field, particularly as some districts created their own tutoring companies with their own teachers.
"I've walked into a room and a tutor and the students weren't doing anything other than walking around or talking to each other," said Wanda Shironaka, who coordinates Title 1 programs for the San Juan Unified district. "I asked for lesson plans. This tutor didn't have anything."
Shironaka made it clear that there are good tutors out there.
"But, there are others who are, well, very interesting," she said. "It's a huge moneymaking venture."
State is denied a waiver
With No Child Left Behind up for reauthorization next year, the future of subsidized tutoring is unclear.
The Obama administration has been willing to grant waivers from the education act to most states, allowing them to replace tutoring with a teacher evaluation process tied to student test scores.
California, unwilling to commit to an evaluation process opposed by teachers unions, was denied a federal waiver last year.
The state is one of five still required to use the subsidized tutoring program. Another eight states are in limbo as their waiver applications are under review.
Nine school districts in California – including Sacramento City Unified, Sanger and Los Angeles – applied for a waiver as a group earlier this year under the name California Office to Reform Education, or CORE.
The group was "driven by the need to circumvent and eliminate" the subsidized tutoring program, said Marc Johnson, a recently retired superintendent from Sanger Unified, just outside Fresno. The request is pending.
Johnson said he was appalled from the outset by the aggressive marketing schemes he saw companies use.
Most districts alphabetize their list of approved tutoring companies, so companies use symbols and numbers to improve their standing:
! # 1 A+ Student Learning Academy/Center !
!!! Apple iPad & Android Tablet Tutoring!!!
!!#1 At-Home Tutors, Inc.
Free equipment is another sales approach. One flier left on the doors at a low-income apartment complex in North Sacramento promised, "FREE LAPTOP! FREE TUTORING!"
Heinrich, the University of Texas professor, said those companies typically charge districts a higher hourly rate.
"The providers are pretty aggressive," Heinrich said. "It's more profitable the more kids they sign up. For parents, it's confusing. (Companies) charge different rates; they promise different things."
School districts often hold tutor fairs in the fall.
"It's pretty much like a job fair, with materials and swag," said Deborah Wells, whose 15-year-old daughter has received tutoring from five providers over the past four years.
Wells said she grew frustrated with many of the companies, which despite promising an analysis of her daughter's progress, routinely had to be pushed to deliver results.
"In my personal experience, it's not working," said Wells, who lives in North Sacramento. "I ended up pulling her (last year). They were not focusing on lessons."
Wells said her daughter has had positive experiences at the nonprofit Roberts Family Development Center, one of the tutoring providers she selected.
"That was more catered to her needs," Wells said. "I try not to tell anyone how to do their job, but if my daughter is going to be there for three hours after school, I want it to benefit her."
The Roberts center has provided tutoring for six years and now serves 900 students, primarily in the Twin Rivers and Sacramento City unified school districts.
"The difference between us and a for-profit company is we have a stake in the neighborhood," said Derrell Roberts, the center's founder. "I could take a college student and put 12 kids in front of him and make a lot of money. But that's not what we are about. We have a bigger scope, a bigger mission."
Proponents of the free-market approach argue that it improves parental involvement and in some cases introduces online learning to students who otherwise would not have been exposed.
"I do think it's worth it," said SK Tilton, a New York business consultant for subsidized tutoring companies, who wrote a book called "SES Finally Made Easy."
But even Tilton said the system needs reforms to weed out ineffective companies and ensure that those remaining have solid business acumen. Tilton said many companies weren't prepared for the extensive paperwork needed for payments, which led to delays, tutors going unpaid and allegations of fraud.
At this point, she doesn't think subsidized tutoring's "inherent flaws" will be addressed before the entire program is written off through state waivers or during reauthorization of the education act.
"This system wasn't designed in a way that it could succeed," Tilton said. "It was designed to fail."
Call Melody Gutierrez, Bee Capitol Bureau, (916) 326-5521. Follow her on Twitter @melodygutierrez.