The Education Department bent the rules to award grants worth millions of dollars to hand-picked applicants in 2001 and 2002, congressional investigators have found. The moves were not characterized as illegal and no corrective action was required.

In a review released by a top House Democrat, the Government Accountability Office detailed three cases in which the department made exceptions to benefit certain applicants. In at least two of those cases, the groups getting money had ties to the Bush administration.

Also, the GAO found four other occasions in which grants went to applicants that had not been recommended by anyone on a three-person panel that reviews proposals, thus violating agency rules.

Since 2003, the Education Department has made changes to improve how it awards competitive grants, and the agency has generally followed those rules, the GAO found.

Yet even with those changes, the GAO found, the department has been lax at times _ such as in failing to document whether applicants had been screened to see how well they manage money.

When the department fails to stick to its own rules, "the integrity of its competitive grant award process may be undermined," the GAO warned in its report.

"In the absence of such diligence," the auditors said, "actions taken that benefit specific grantees, such as those we found in 2001 and 2002, could happen again."

The GAO is the investigative arm of Congress. The report was requested by Rep. George Miller of California, top Democrat on the House education committee. Miller said the report shows Bush administration cronies benefited at the expense of school districts.

"The Department of Education, even by 2006, has still failed to take all the steps necessary to prevent recurrence of this type of abuse," Miller said.

The GAO recommended more steps the department should take to shore up its rules, and the agency has generally agreed.

In a written response, department official Christopher Doherty assured the GAO that the department has taken "major steps to improve its procedures for awarding competitive grants, and these steps have resulted in increased accountability."

Investigators detailed three cases in which the rules were bent for applicants.

The GAO said it is not recommending that Education Secretary Margaret Spellings take action on any of them, however, because there were no "clear violations" of federal law. The grant awards happened during the tenure of Spellings’ predecessor, Rod Paige.

  • The Arkansas Department of Education got $2.3 million for a project with K12 Inc., an online curriculum company founded by William Bennett, who was education secretary under President Reagan. Federal officials changed their selection methods and expanded their funding list to include Arkansas, and all the other projects lost some money as a result.
  • The American Board for Certification of Teacher Excellence got a $5 million grant even though its proposal was not recommended by two of the three experts on a peer review panel. The board is a project of the conservative Education Leaders Council. One of the council’s founders, Eugene Hickok, was under secretary of education under Paige.
  • America’s Charter School Finance Corporation got an unspecified award despite ranking sixth on a list of four grantees that peer reviewers had recommended. A senior political appointee was ordered to "re-review" the competitors that had finished fifth and sixth. The grantee list was then expanded to five, and America’s Charter was bumped up to fifth to qualify. Program officials told the GAO they had never experienced a case like it.


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