LAUSD Superintendent Placed on Leave

The FBI investigation that led to Superintendent Alberto Carvalho's paid leave is reportedly focused on a collapsed $6.2 million contract for an AI chatbot named "Ed". The deal was with a now-bankrupt edtech startup, AllHere, whose founder has been indicted on fraud charges. The investigation is said to be targeting Carvalho directly, rather than the district as a whole, and centers on financial issues surrounding the contract. A key figure in the investigation is a Florida-based education consultant, Debra Kerr, who has long-standing professional ties to Carvalho from his time as superintendent in Miami-Dade County. FBI agents searched her home in addition to Carvalho's residence and LAUSD offices. Kerr is listed as a creditor of AllHere, claiming she is owed $630,000 for her work on the LAUSD deal. While the district has stated it was not financially harmed by the defunct AllHere contract, having paid about $3 million of the total, the leadership crisis comes at a time of significant financial strain for LAUSD. The district is facing a projected budget deficit of $1.6 billion by the 2027-28 school year, driven by declining enrollment and the end of pandemic-era funding. Just before Carvalho was placed on leave, he had warned that the district was at a "breaking point" financially. In mid-February, the school board narrowly approved sending out 3,200 preliminary layoff notices, with an expected 657 positions to be cut, primarily from central and regional offices. The district's reserves, which stood at $5 billion, are projected to be depleted within three years without major reductions. This financial instability is compounded by the costs of promised employee raises and a dramatic 46% drop in student enrollment since its peak in 2001. Acting Superintendent Andres Chait, a veteran of the district for nearly three decades, has stated his focus is to "ensure stability, continuity, and strong leadership." His responsibilities as former Chief of School Operations included overseeing athletics, the office of emergency management, and staff investigations. The investigation and leadership change occur as the district is in the midst of tense labor negotiations. United Teachers Los Angeles, the teachers' union, has raised concerns about the district's spending on outside contractors and education technology. Carvalho, who has led the nation's second-largest school district since 2022, had his contract unanimously renewed in 2025. He had been a vocal advocate for the AI chatbot, calling it a "personal assistant" for students before the project was abandoned.