D.C. Public Schools officials diverted funds from a vocational education grant to build and rehabilitate its crumbling buildings, a “direct violation” of federal law and one of the reasons the schools are now in danger of losing their federal funding, an internal schools report found.

The grants were supposed to train students in practical job skills so they could pull themselves out of the pervasive poverty that afflicts D.C.’s 51,000-plus public school students.

Instead, the D.C. schools’ “High Risk Corrective Action Plan” found that the money went to construction and renovation work, a “direct violation of granting agency and compliance requirement.”

The High Risk memo is dated May 29 but was posted online Tuesday. It is compiled from the findings of outside auditors hired by the city and federal reviews.

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Last year, the Department of Education rated D.C.’s $1 billion-plus school system “high risk” for federal funds because officials didn’t take care of the money they were given.

The corrective action plan outlines the city’s attempt to get off the federal high-risk list.

The memo gives the public a rare glimpse at the depths of the problems facing new Mayor Adrian Fenty and his chancellor, Michelle Rhee, as they try to pull the schools out of a decades-deep morass of neglect, incompetence and corruption.

Rhee’s spokeswoman Mafara Hobson declined comment for this story.

The collected audit findings in the High Risk memo are sobering reading.

School and city finance authorities are blasted for not conducting supply inventories for years at a time, for shoddy accounting practices and for not maintaining a comprehensible payroll system.

Maryann Young, spokeswoman for the city finance office, deflected blame from her agency, saying it is mentioned only “once” in the High Risk memo.

Some are skeptical that the 11,000-plus employee school system is up to the reforms outlined in the memo.

“I think the corrective actions are just way beyond the capacity of the school system’s and the finance office,” said Mary Levy, a schools monitor for the Washington Lawyers Committee for Civil Rights.

bmyers@dcexaminer.com