See the priceless piece in today’s Daily News, about how Comptroller Thompson sent a letter to Chancellor Klein, challenging him on his oft repeated claim of having saved $200 million from the bureaucracy, and another $290 million last year.

Klein responded by writing that Thompson’s letter “is riddled with errors." Only Klein’s own letter had a basic mistake in the math:

"If someone uses 100,000 gallons of gas at a price of $3.50 and then cuts back to 900,000 gallons, that is a real savings even if the cost of gas goes up to $4," Klein wrote, figuring the price rises to $360,000, not $400,000. The only problem is, by Klein's numbers, the price would actually go up to $3.6 million.

Here is an excerpt from the Thompson letter:

I have indicated previously that the Department appears to be engaged in a "shell game." This latest review does nothing to dispel that judgment. As I am sure you will agree, Exaggerated claims undermine the Department's credibility, and the withdrawal of critical information—such as the cessation o f school-based-expenditure reports-limits transparency and accountability.

As the City's budget is being formalized, it is critically important that accurate data be used to guide DOE decision making. I therefore, and once again, strongly urge your office to resume the publication of reliable school-based expenditure reports so that analysts and the public have a transparent view of DOE's efforts.

Clearly, wherever they made cuts, it wasn’t at Tweed, where wasteful spending, high salaries , and the headcount continue to grow each year.

And though the article says that Klein referred to the fact that “The Independent Budget Office pegged the savings at $221 million” the IBO also said they couldn’t confirm that this amount was redirected to schools, as the DOE claimed, and in fact, couldn’t figure out where the money was spent.

Here is an excerpt of an email to me in March of 2007 from George Sweeting, the deputy director of the IBO:

“We did conclude that there were substantial savings, but we also said that the available information made it hard to tell how much was redirected to the schools or elsewhere in the DOE budget. The difference between our numbers and the Comptroller’s result from assumptions about what to include as administrative savings. The analysis was described in our March 2005 report on the Mayor’s Preliminary Budget for 2006. http://www.ibo.nyc.ny.us/iboreports/march2005.pdf; The discussion is on page 65 of the report (page 71 in the PDF).

There’s a follow-up on this controversy on NY1, with more comments from Klein, who added today that “he's working on new solutions to school overcrowding in difficult economic times.”

Please, Mr. Klein: tell us what they are; perhaps as in your letter, your can simply underestimate the thousands of students in overcrowded schools by a factor of ten.

Last week, the DOE announced, with a straight face that, after competitive bidding, it had awarded a five year, $50 million contract to train principals to the (drum roll please) NYC Leadership Academy.

Ten million dollars a year of taxpayer money that will continue for five years, long after Bloomberg has left office. This news, delivered with a straight face, went mostly unreported in the press, with a few exceptions.

That the Leadership Academy – created by Joel Klein, with Joel Klein chair of the board, Joel Klein who had selected the other board members, Joel Klein who had appointed the director, Joel Klein who had raised $75 million in private money to start it through the Fund for Public Schools, an organization which is also chaired by Joel Klein….had now been awarded a $50 million contract by Joel Klein, went mostly unreported. (see partial correction below)

The press has had a field day reporting much smaller City Council grants to organizations that employ relatives of City Council members. But when Joel Klein awards a $50 million to an organization that he himself heads, nothing but….silence. The bare faced absurdity of it all cannot be outdone.

Encouraged by the lack of critical reception, Klein and his overpaid deputies have devised a new plan by which they can remain in power indefinitely, even after the Mayor leaves office, even if Mayoral control is significantly amended.

How? Simple. Before leaving office, Joel Klein will grant himself a contract to run the schools for the next twenty years, running the entire operation from an outside corporation, and eliminate DOE altogether. Whether this device is legal or not is uncertain, but that has never stopped him before.

At the same time, by eliminating the need for the entire central office at Tweed, he can claim a great victory by having shrunk the bureaucracy.

News update and partial correction:

A savvy reporter informed me that Joel Klein took himself and Chris Cerf off the board at the Leadership Academy about a month ago – just before awarding them the $50 Million competitively bid contract. Not that this would fool anyone, but…

Sure enough, when you go to the Academy's website here , you see the original board listed; but the links are missing for the bios for Klein, Cerf and Robert F. Arning, who is head of the NYC office of KPMG and has a huge contract with DOE as well.

And when you go to another page listing the board, their names are omitted.

Wonder if any of this is legal….since Klein stepped off the board right before granting the contract, presumably he thought there might be a problem.

UPDATE (July 27); the DOE's Truth Squad at work has made sure that the first of these links has been removed, eliminating any trace of Joel Klein's previous leadership of the Board, as well as Cerf's participation. When you go to the second link, there are eight current members listed, including Kathy Wylde of the NYC Partnership and two emeritus directors of McKinsey and Co. Two of the Leadership Academy's board members received awards from the Partnership in 2007, and another serves on their board as well.