Two prominent New York City Council members have called for increased scrutiny of contracts within the city’s public school system amid an investigation concerning Chancellor Kamar Samuels’s role in a $180,000 no-bid contract for foreign language instruction.

The issue came to light during a City Hall hearing on Wednesday, where Sean Kreyling, chief executive of Language Learning Network, the vendor providing the instructors, testified that Mr. Samuels was instrumental in arranging the contract while overseeing schools on Manhattan’s West Side. Mr. Kreyling stated that Mr. Samuels signed the agreement in 2023 and was aware of a billing arrangement designed to circumvent the Department of Education’s procurement rules. Describing the situation as “significant financial malfeasance,” Mr. Kreyling’s testimony intensified scrutiny of the chancellor just months after his appointment by Mayor Zohran Mamdani.

Chancellor Samuels has admitted to a “lapse in procedure,” emphasizing that his actions were not motivated by personal gain but to benefit students. Despite this, the investigation has cast a spotlight on contract oversight practices within the Education Department, the largest school system in the United States with a budget exceeding $40 billion.

Eric Dinowitz, chair of the City Council’s Committee on Education, labeled the testimony “deeply troubling” and underscored the need for more rigorous review of contracts, particularly those awarded without competitive bidding. He expressed concern over the prevalence of contracts under $25,000, which attract minimal oversight. The contract awarded to Language Learning Network was reportedly divided into smaller payments to remain below this threshold and dispersed across affiliated entities.

“These revelations reinforce the urgent need for systemic reform in contract oversight,” Mr. Dinowitz said, stressing that the issue transcends any one individual. He also highlighted that while principals and superintendents have discretion to hire providers independently, the cumulative total of small contracts citywide amounts to roughly $386 million.

Council Speaker Julie Menin echoed concerns over contract transparency in the Education Department, which manages over $12 billion in annual agreements. She has requested detailed records on hundreds of contracts, including no-bid deals, from Chancellor Samuels, but said the department’s response was insufficient. In a letter obtained by reporters, Ms. Menin characterized the lack of disclosure as “alarming” and criticized the department for failing to provide copies of contracts by the established deadline.

The matter escalated following a whistleblower complaint last year, which alleged that one of the instructors affiliated with Language Learning Network had been banned from working in city schools due to past misconduct allegations dating back to 2014. Mr. Kreyling stated he was unaware of these allegations and subsequently terminated the teacher’s employment.

This complaint triggered an investigation into Mariela Graham, deputy superintendent at the time and responsible for renewing the contract by splitting payments into smaller sums. The Office of the Special Commissioner of Investigation (SCI), an independent watchdog, determined that Ms. Graham exhibited “astoundingly poor judgment” and recommended her termination. Despite this, a City Council member noted that she had since been promoted to a senior position within the Education Department. Ms. Graham did not respond to requests for comment.

While the earlier investigation did not include Mr. Samuels, the SCI has since opened a separate inquiry based on “new allegations” related to his involvement. Mayor Mamdani stated that he is taking the investigation seriously but maintains confidence in the chancellor’s leadership.