D.C. Schools Chancellor Michelle Rhee has abruptly called off renewal of a contract with the Teachers Institute, telling the nonprofit teacher training agency that an upcoming inspector general audit will report big problems with its procurement practices.

Teachers Institute leaders were notified by e-mail late Friday that their contract was not being renewed, just two days before the last contract was set to expire, e-mails show.

Board Chair Richard Spigler told The Examiner he was baffled by Rhee’s decision because neither the inspector general’s office nor Rhee’s staff would elaborate on their concerns.

“They don’t feel it’s appropriate to brief us,” he said.

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Spigler said that as recently as a few weeks ago, Rhee promised institute leadership that its partnership with the 50,000-student school system would continue far into the future.

“We were operating under a verbal notice to proceed,” he said, “which makes the e-mail very surprising.”

The Teachers Institute was formed three years ago and has been providing literacy-centered staff development to 300 teachers in 21 D.C. public schools at a price of $2 million to $3 million annually. Principals have spoken favorably about the training, which is based on a Columbia Teachers College program.

Questions first arose about the organization’s financial controls and contracting practices last year when a former employee complained to the chancellor, according to a Teachers Institute news release.

Teachers Institute Director Sheila Ford indicated in a written statement that she was troubled that Rhee was not waiting for the release of the final audit report before taking action.

In her letter to Teacher Institute, Rhee stated that her staff got advanced information about the investigation last week and “during that briefing, the IG’s staff raised a number of concerns with respect to the contract.”

“We anticipate that the Inspector General will complete his investigation and issue his report some time this summer,” she wrote. “We would like to try to find a way to continue our relationship if we can after we have received the IG’s final report.”

Rhee spokeswoman Mafara Hobson would not elaborate on the chancellor’s concerns.

dlevitz@dcexaminer.com