Responsibility flows with federal dollars. When considering whether to use federal funds to support a specific expenditure, the grantee must undertake a three-step analysis. The grantee must ensure that the cost is allowable under:

1. The applicable federal costs principles (OMB Circular A-21, A-87 or A-122);
2. Education Department of General Administrative Regulations (EDGAR); and
3. The applicable program statute (NCLB Title I, IDEA, or Perkins, for instance), along with accompanying program regulations and non regulatory guidance.

In order to spend federal funds appropriately, each cost must be allowable under the principles enumerated in all three.

It is the responsibility of the United States Department of Education (ED) to ensure that all federal education funds are spent appropriately in accordance with federal law and ED’s policies. ED’s primary missions are to improve the management of federal education activities and increase accountability of federal education programs to the President, Congress and the public. When this fails to happen, schools and districts end up in the newspapers, funds must be repaid to ED, and, in the worst case, administrators and accomplices may go to jail for stealing public funds.

Nobody wants to be on the wrong side of these issues and that is particularly true for Members of Congress. Washington was reminded of that this week when Howard “Buck” McKeon (R-CA), the Ranking Member of the House Committee on Education and Labor, and Mike Castle (R-DE) sent a letter to the Government Accountability Office (GAO) and ED’s Inspector General (IG) requesting specific information on the processes in place to monitor compliance with federal program and fiscal requirements at the state and local levels. Their letters also sought information on how ED uses findings of noncompliance to ensure corrective action, and whether such findings are used to identify areas for management reform on a broader scale.

The request included specific examples of “waste, fraud and abuse” in federal education programs, including:
• The fraudulent theft of 21st Century Grant monies in Franklin County, Florida;
• The unnecessary purchase of computer equipment and failure to provide matching funds in St. Paul, Minnesota; and
• Accepting bribes for the support and approval of vendor contracts in New Orleans, Louisiana.

The letters to the GAO and the Department of Education’s IG are available for download on the Education and Labor Committee Republican website.

Resources:
Federal Education Grants Management: What Administrators Needs to Know. Thompson Publishing Group, Inc: 2007.

“Education Committee Republicans Call for Investigations of Waste, Fraud & Abuse in Federal Education Programs,” Committee on Education and Labor, News Update, May 28, 2008.