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GAO Again Recommends Better Oversight of Grants to Minority Serving Institutions

WASHINGTON – Since 2004, the Government Accountability Office (GAO) has been telling the U.S. Department of Education that it needs to improve the way it monitors and provides technical assistance to Title III and V grantees. These federal education funds go to institutions that enroll large numbers of low-income and minority students, including historically Black colleges and universities, Hispanic-serving institutions, tribally controlled colleges and universities, and others. And, in the past 10 years, funding has almost tripled, from $230 million to $681 million.

 But according to testimony delivered before the House Committee on Education and Labor on Thursday, the agency continues to make only limited progress. In fact, GAO uncovered “questionable expenditures” at four of the seven institutions where it conducted financial site visits last year—to the tune of more than $140,000.

 One Maryland-based institution was responsible for $105,117 of that amount. It used $79,975 for student trips to locations such as amusement parks and resorts as part of a character and leadership building activity; $6,000 was used to purchase a desk and chair; and $4,578 was used to purchase an airplane global positioning system although the school does not own an airplane. More surprising, however, is that the Department of Education recommended the school as a model grantee.

 “[The Department of] Education has made some progress in implementing a systematic approach to grant monitoring and technical assistance, but much work needs to be done,” said George Scott, GAO’s director of Education, Workforce, and Income Security, at the hearing.

 Scott said that the department has made progress in automating its monitoring tools and developing risk-based criteria. The redesigned system, he said, increases the ability to assess the risk of grantee noncompliance. The department also has taken steps to improve its technical assistance programs and develop mechanisms to routinely collect and use grantee feedback.

 “Despite progress in these areas, we found that Education still lacked a coordinated approach to guide its monitoring efforts,” Scott added. “It recently developed a draft monitoring plan for Title III and V programs but has not consistently developed realistic and measurable targets for each of the activities in the plan.” In addition, Scott said that not having a comprehensive approach increases the potential for fraud, waste and abuse.

 Robert Shireman, an Education Department deputy undersecretary, reported that the agency has made progress in its monitoring and technical assistance efforts. Its monitoring index, he said, helps to identify institutions for possible review based on audit and accreditation findings, commercial credit scores and other measures. In addition, the agency is reviewing annual performance reports to alert them to whether grant benchmarks are being met or the funds are being used in ways not identified in the grant application.

 Shireman also said that the Department of Education will increase site visits in Fiscal Year 2010 and is pairing experienced staff with new staff on these visits as part of its training initiative. He added that the department is following up on the incidences of fraud that GAO has uncovered. He also noted that this year the department held a conference with more than 1,000 project directors from minority serving institutions around the country to share best practices across institutions and suggestions for how the Education Department can be more helpful.

 “All of this is part of an effort for us to be a stronger learning organization so we can get better and better at what we do and figure out how we can help institutions to grow, improve and graduate more students toward the president’s 2020 goal,” Shireman said. “Our goal is not only to make sure that the funds are used appropriately but also to do all we can to ensure that they’re used as effectively as possible.”

 Rep. Robert Scott, D-Virginia, said that making the grant applications more specific could go a long way toward solving some of the problems. Citing the example of the funds used for leadership development activities that took place at amusement parks, he said the line item should offer details other than “leadership development.”

 “There’s no reason why there should be any questions after the fact. The line item should have been exactly what they were going to actually spend the money on. Had they required more specificity in the application before they funded it, there would be less discussion after the fact,” he said.

 Rep. Scott said that he has spoken to several Education Department representatives and that the next round of applications will be made more specific so this problem will not exist in the future.

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