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NCLB Outrages

An OIG Perspective on Improving Accountability and Integrity in ESEA Programs

There is a link to the 38 page Word document from which this passage is excerpted below.

Perspective Paper Excerpt

"In our February 2007 report on the Departmentテ「冱 administration of the Reading First program,
we noted that the current ESEA may not clearly communicate the intent expressed by Congress concerning the effectiveness of reading programs. The 2006 Labor-HHS-Education appropriations bill (Public Law 109-103), dated July 2005, stated that funds available under the Reading First program were intended to be used to テ「彳ncourage and support the use of reading programs with the strongest possible scientific evidence of effectiveness.テ「 The ESEA specifies that an acceptable use of Reading First funds subgranted to LEAs is for selecting and implementing a learning system or program of reading instruction based on scientifically based reading research (SBRR) that includes
the essential components of reading instruction. While the current ESEA provides definitions of テ「彜BRRテ「 and テ「彳ssential components of reading instruction,テ「 the law does not contain language on scientific evidence of effectiveness for evaluating reading programs. The reauthorization of the ESEA provides the Congress the opportunity to clarify whether reading programs should be funded on the basis of program effectiveness."

"The need for quality data continues to be an ongoing and even more critical issue under the NCLB. In 2002, we completed a joint project of the U.S. Comptroller Generalテ「冱 Domestic Working Group where we collaborated with four other audit agencies (GAO, Texas State Auditorテ「冱 Office, Pennsylvania Department of the Auditor General, and Philadelphia Controllerテ「冱 Office) to assess the quality of Title I accountability data gathered at the LEA, SEA, and Departmental levels. Data issues identified from the joint project are described in more detail in the sections below. In 2004, GAO reported that over half of the States and school districts interviewed cited being hampered by poor and unreliable student data when implementing student proficiency requirements."

Our audits, inspections, and investigations have found severe breakdowns of internal controls, which were either by-passed or nonexistent, involving millions of dollars in Federal education funds for State and local programs. In some instances, we found fraud in education programs, which may have been prevented if proper controls were in place and followed. For example, high-level SEA and LEA officials, who were in positions of authority and oversight, committed wrongdoings that resulted in millions of dollars in misspent funds in the following cases:

テつキ Georgia SEA. Our investigations and the Georgia State Auditor revealed that the former State School Superintendent authorized questionable payments for technology purchases totaling over $650,000 and funneled the funds into her failed 2002 gubernatorial campaign. The Superintendent and her co-conspirators, including an Associate Superintendent, were successfully prosecuted in Federal court.

テつキ Puerto Rico SEA and Contractors. High-level SEA officials, including the former Puerto Rico Department of Education Secretary and Associate Secretary, and contractors received Federal jail terms stemming from charges related to a $4.3 million contractor kickback scheme. Our audit work found that the SEA lacked adequate controls to administer contracts, ensure proper contract and salary charges, prevent significant amounts of Title I funds from lapsing, and expend Title I funds properly. Our investigations have led to the conviction of payment officers in several districts for embezzling Title I funds by preparing and converting to their own use payment checks for vendors doing business with the school district.

テつキ Long Island School Districts. A 2005 New York State Comptroller report found that the Superintendent and Assistant Superintendent manipulated one school districtテ「冱 financial accounting system to use over $11 million for personal expenses. Additional reported issues further illustrate the breakdown of the entire control system in this district, including (1) the lack of oversight by the Board of Education, the Internal Claims Auditors, and the district treasurer; (2) conflicts of interest by the districtテ「冱 IPA, whose substandard performance and flawed audit failed to identify the fraud; and (3) weak internal controls in the districtテ「冱 financial accounting system. Our work in two other school districts found similar issuesテ「背eak controls over the districtテ「冱 financial accounting functions and/or IPA conflicts of interestテ「背hich resulted in $6.6 million in inadequately supported Title I and Title II (Preparing, Training, and Recruiting High Quality Teachers and Principals) expenditures in one district, and false expenditure reports totaling over $500,000 and criminal prosecution of several high-level officials in the other district.

Need to Avoid Conflicts of Interest and Ensure Transparency in Decisionmaking

Our audit and inspection work, as well as a February 2007 GAO report, on Reading First found that the Department did not maintain a control environment that exemplified management integrity and accountability during its grant application process and in providing program information and support to States and school districts. The appearance of bias towards selected reading programs, conflicts of interest by peer reviewers and personnel at technical assistance centers, and failure to adhere to established policies and procedures during the State application process could have been avoided if appropriate controls had been in place. The Secretary agreed to implement our recommendations, and reinforced them in an internal memorandum to senior officers. To strengthen the management and administration of programs throughout the Department, the Secretary also distributed internal guidance on: (1) impartiality and prohibitions against interpreting laws to control and direct curriculum and instruction in accordance with the Department of Education Organization Act, GEPA, and ESEA; and (2) the use of peer reviewers in formula grant programsテ「澱uilt on the internal Handbook for the Discretionary Grant Process regarding the selection of reviewers, conflict of interest, and information provided to successful and unsuccessful applicants.

Our work has also disclosed a need for similar integrity and accountability controls for the Departmentテ「冱 grantees and their sub-grantees, personnel, and vendors.

テつキ Reading First Program at the State Level. Our audits in two States also found issues of conflict of interest by grant reviewers in the Stateテ「冱 approval process for awarding Reading First subgrants to LEAs. For example, one of the SEAs did not ensure that a grant reviewer recused himself from reviewing the application of LEAs that selected the reading program he had authored.

テつキ Conflicts of Interest at District and School Levels. We have investigated cases where district and school employees, who have authority to obligate grant funds, have had conflicts of interest with the vendors with which the district or school does business. These conflicts have sometimes resulted in fraudulent activities. In one case, the
U.S. Attorneyテ「冱 Office reported the arrest of an individual who allegedly wrote a textbook while he was a school district official and subsequently caused the district to pay nearly $4 million in Title III funds to purchase the textbook from his publisher. This scheme reportedly netted him nearly $1 million in royalties and fees, in violation of State conflict of interest laws and the districtテ「冱 code of ethics. In another case, a former top SEA official responsible for overseeing charter schools diverted funds to various bank accounts that she controlled, and awarded no-bid contracts whose beneficiaries were friends and for which she received kickbacks

— Office of Inspector General, U. S. Department of Education
Perspectve Paper
2007-10-15
http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/s09h0007.doc


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