Federal Reading Program FUBAR?

There's lots of news and commentary about a report released last week accusing the USDE of mucking up it's much-vaunted Reading First program -- mainly by being overly prescriptive and possibly even corrupt in pushing grantees towards certain approaches and products (like DIBELS).

According to this AP story (Audit Finds Ethical Lapses In U.S. Reading Program), "Government audit finds that the Reading First program has been beset by
conflicts of interest and willful mismangement. It also says that
program review panels were stacked with people who shared the
director's view's and that only favored publishers of reading curricula
could get money."

Stephanie Banchero's Saturday story about the situation sketches out some of the issues as they've affected Illinois, and I wrote about some area concerns about Learning First messing with RF in a Catalyst story last spring (Districts new strategy to improve teaching),but I want to know more: 

Were ISBE or CPS or individual RF schools forced to use DIBELS instead of PALS or whatever else they had been using?  Does the Chicago Reading Initiative conform to the federal RF guidelines, or do they operate separately or in different schools  (that is, assuming that the CRI with its ARCs and LLTs and all is still really operational)?  And how does Learning First, the sorta-new early assessment in literacy program that CPS rolled out last year and expanded this year, fit in? 

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