[IP] School Internet Program Lacks Oversight, Investigator Says
From the New York Times --
http://www.nytimes.com/2004/06/18/education/18computer.html?th
School Internet Program Lacks Oversight, Investigator Says
By SAM DILLON
WASHINGTON, June 17 - Representative Joe L. Barton listened to an hour
or so of Congressional testimony on Thursday about waste and fraud in
the federal program that helps poor schools connect to the Internet
before questioning an official who has been investigating it.
"Is it your view that these applicants view this program as a big candy
jar, free money?" Mr. Barton, Republican of Texas and chairman of the
House Energy and Commerce Committee, asked H. Walker Feaster III,
inspector general for the Federal Communications Commission, the agency
that oversees the program.
"I'd agree with that," Mr. Feaster replied.
The E-rate program, administered by a little-known corporation, the
Universal Service Administrative Company, is financed by a fee
collected from all telephone users. It has disbursed $8.1 billion since
it began wiring schools in 1998. Most of the 30,000 or more districts
and libraries that receive financing each year pay only about 10 cents
on the dollar for equipment and Internet services. This arrangement has
led contractors to prey on the program and school officials to be less
careful in acquisitions than they might be in spending district money,
several witnesses testified Thursday.
Representative James C. Greenwood, Republican of Pennsylvania and
chairman of the Subcommittee on Oversight and Investigations, opened
the hearings by listing the dismal findings of a string of recent
investigations. In Puerto Rico, Mr. Greenwood said, investigators found
$23 million worth of telecommunications equipment sitting
shrink-wrapped on pallets in a government warehouse years after it had
been bought with program money. In Milwaukee and New York, there have
been indictments in the defrauding of schools, he said. In Chicago,
SBC, one of the largest telephone companies in the United States,
returned $8.8 million in federal money after vast quantities of
Internet routing equipment bought for use in schools were found
stockpiled improperly in a warehouse, Mr. Greenwood said. In San
Francisco, NEC pleaded guilty to felonies for preying on schools there
and in Michigan, Oklahoma, Arkansas and South Carolina.
"And I fear that we may be only seeing the tip of the iceberg,'' Mr.
Greenwood said.
Much testimony focused on oversight for the program.
Carol Mattey, a deputy bureau chief in the Federal Communications
Commission, said that audits conducted to date suggested that rule
breakers were few. Ms. Mattey cited an error rate of less than 1.2
percent in the audits conducted last year but said her agency would be
"expanding the scope of our auditing work in the coming year
substantially."
But Mr. Feaster said there were not enough full-time auditors devoted
to the program. Together, the Universal Service Company and the F.C.C.
have about 15 auditors who review E-rate programs, and private auditing
companies are contracted to do additional work, Mr. Feaster said. But
all of the auditors combined scrutinize only a tiny percentage of the
vast number of projects the program approves each year, he said.
Under questioning from Representative Greg Walden, Republican of
Oregon, Mr. Feaster estimated that since the program began disbursing
in 1998 it had given upward of 200,000 grants. Yet F.C.C. and Universal
Service Company auditors have carried out or overseen fewer than 200
audits, Mr. Feaster said.
Several lawmakers were at pains to praise the goals of the program.
"We should not let a few bad apples spoil the bushel," said
Representative Bobby L. Rush, Democrat of Illinois, noting that the
program had helped schools in his Chicago district obtain Internet
access. "It's clear that this is a program that is helping to bridge
the gap between the haves and the have-nots."
Copyright 2004 The New York Times Company
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