You probably have to consider the Washington, DC school system which fails to educate in the shadow of the US Capital building:
http://www.washingtonpost.com/wp-dyn/articles/A9596- 2004Oct5.html
Then there's the Camden, NJ school system whose superintendant manages to pull down a $200K salary and thousands of dollars in bonues for apparently figuring out how to inflate graduation rates and test scores in the district:
http://www.courierpostonline.com/apps/pbcs.dll/article? AID=/20060615/NEWS01/606150411/1006
Then there's Christina School District in Delaware which managed to overhire teachers and staff without any prospect of getting the money from the state:
http://www.delawareonline.com/apps/pbcs.dll/article? AID=/20060615/NEWS/606150378/1006
But, my candidate for the worst school district in the US goes to (drum roll) the Colorado Springs district in Colorado:
http://abcnews.go.com/US/LegalCenter/wireStory?id=2073586
Not only did they assign a totally unqualified and untrained "peer trainer" for a severely disabled student with an IQ of 50 but, when the inevitable sexual assault occurred, they hired an expert who testified that the sexual assault was probably something the disabled student enjoyed -- "it ignited her female desires." Oh, and that untrained peer trainer -- he had been suspended 20 times the previous school year and was pulling down a totally impressive 0.0 GPA at the time of his appointment.
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