• September 2, 2014

GAO Questions How Minority-Serving Colleges Spent Federal Funds

The U.S. Government Accountability Office questioned the uses of federal grant funds at four of the seven minority-serving institutions it examined last year, the agency says in a new report. That includes more than $105,000 that was spent by Morgan State University in Baltimore, identified by a U.S. Department of Education official.

The GAO charges that officials at Morgan State used nearly $80,000 to take students in a leadership program to resorts and amusement parks, more than $6,000 for office furniture, and $4,578 for an airplane global-positioning system, "even though the school did not own an airplane," according to the report, "Low-Income and Minority-Serving Institutions: Sustained Attention Needed to Improve Education's Oversight of Grant Programs."

In addition, the U.S. Department of Education has not followed up on several recommendations over the past six years to better monitor federal grants awarded to minority-serving institutions, the report says.

Morgan State acknowledged that the smaller purchases were the result of a faculty member's poor judgment. But the university defends the travel expenses for the students, saying the destinations were not resorts but camping trips and other outdoor experiences meant to challenge the young men who were participating.

The GAO, which is the investigative arm of Congress, presented the report as testimony to Congress on the department's oversight of institutions that receive such grants. The report was released on Thursday at a hearing of the U.S. House of Representatives Subcommittee on Higher Education, Lifelong Learning, and Competitiveness.

Robert M. Shireman, deputy undersecretary of education, told committee members that the department was working to improve electronic monitoring of the federal grants given to minority-serving institutions and conducting more visits to check on compliance at campuses that receive the money.

Late Fees and T-Shirts

For its study, the GAO randomly selected seven minority-serving institutions that received grants from Title III and Title V of the Higher Education Act--programs meant to help colleges that serve a high proportion of minorities, such as historically black colleges, American Indian tribal colleges, and Hispanic-serving institutions.

The institutions received a total of nearly $1.9-million in such grants during the period studied, the 2006 fiscal year.

In reviewing how the colleges spent their grants, however, the GAO found that nearly $143,000 was used for questionable purposes, such as $2,127 that Wiley College, in Texas, used to pay late fees; $4,800 that Riverside Community College, in California, spent on T-shirts for students; and $27,530 that the University of the Sacred Heart, in Puerto Rico, used to prepay subscription and contract services that would be delivered after the grant expired. (The specific institutions were not identified by the GAO, but Mr. Shireman named them in his written testimony to the House subcommittee).

The GAO said Morgan State, a historically black institution, misused nearly a quarter of the $427,180 in federal grants it had received in 2006.

"A review of grant disbursement records revealed spending with no clear link to the grant and instances in which accounting procedures were bypassed by the school's grant staff," the report said.

For example, the accountability office found that in purchasing the office furniture and GPS, a college official "split the payments on an institutionally issued purchase card to circumvent limits established by the institution. Officials at the institution ignored multiple warnings about mismanagement of this activity from external evaluators hired to review the grant," the GAO reported.

'Reasonable' Overhead

Clinton R. Coleman, director of public relations at Morgan State, said all of the expenses the agency identified were related to the Morgan MILE, a leadership program for male students that has been studied and emulated by other colleges across the country. He said the program has been successful at keeping the participants in college and graduating.

The university was reimbursed for both the furniture and the GPS, which Morgan MILE participants used to learn how to pilot the aircraft of a supporter, Mr. Coleman said.

The young men who were in the program were taken on trips for activities like white-water rafting and rock climbing, he said, similar to wilderness challenges in the Outward Bound program.

A statement from the National Association for Equal Opportunity in Higher Education, a nonprofit group representing the nation's historically and predominantly black colleges, said that the amount of misused money identified by the report was a small portion of the overall grant money spent by just four of 511 minority-serving institutions.

"The small amount of spending in question here ... could be considered as reasonable administration overhead charges that accounting adjustments would clarify," the association said in a written statement.

The problems at Morgan State, the report says, are also indicative of the Education Department's failure to properly monitor institutions that receive the federal grants. In fact, officials from the department had visited the university in 2006 and recommended it to the GAO as a "model grantee."

The GAO had advised stronger monitoring of these grant programs as early as 2004 and repeated its concerns in reports in both 2007 and 2009.

Mr. Shireman, who will be stepping down from his post this summer, acknowledged that the department had not fully met the GAO's standards, in part, because of a lack of staff and money. But he said the department had made "good progress" and would continue to work toward that goal in the coming months and years.

Members of Congress responding to the report emphasized that the misuse of federal grant money undermined President Obama's goal of having the nation achieve the highest proportion of college-educated adults in the world. Reaching that goal will require significant improvement in graduation rates by minority-serving institutions, said U.S. Rep. Rubén Hinojosa, Democrat of Texas.

"Our students deserve the very best, and our institutions must provide exemplary leadership in managing these resources effectively," Mr. Hinojosa said in his opening statement to the subcommittee.

"The institutions that receive funds through these programs serve some of the most vulnerable students and those students perhaps in most need of a postsecondary education," U.S. Rep. Brett Guthrie, Republican of Kentucky, said in his opening remarks at the hearing.

"As a result, it is important to ensure the institutions being attended by these students are using federal taxpayer dollars wisely," he said.

Comments

1. 22237822 - May 28, 2010 at 06:04 am

If this was about for profit institutions it would be a totally different article. Whatever happened to fairness in reporting. of seven grants studied over fifty percent demonstrated misuse or should a say fraud with taxpayer dollars. Bob Shireman does even seem concerned!

2. 22261984 - May 28, 2010 at 07:51 am

From Roger Clegg, Center for Equal Opportunity: I won't pass up the opportunity to point out that it's wrong for schools to be receiving federal money on the basis of their students' skin color and what country their ancestors came from ("programs meant to help colleges that serve a high proportion of minorities").

3. mbelvadi - May 28, 2010 at 08:26 am

I'm thinking just the opposite of #1, that what this article reports on is making a big deal of really penny ante stuff, and I doubt many institutions could live up to this kind of scrutiny. Buying t-shirts for students? Come on, that kind of thing happens everywhere, and is a frequent part of retention-aimed social events. And for those who want to get worked up about "taxpayer dollars" should note that the total amount of money involved here is pretty much rounding error in the scale of the outrageous fraud/misuse/"overruns" routinely committed by, for instance, government defense contractors, whose "bad judgment" costs billions yearly.

4. jdm0007 - May 28, 2010 at 09:45 am

About time that the fraud and abuse in minority institutions was given the light of day. It is actually worse than one can imagine. In fact there are many who should go to jail. If they were not minorities there would be a goodly number of Presidents in the can.

I cannot believe that anyone would say well it happens everywhere so it is just ok. There is a big difference between bad judgement and outright theft. Educatiional institutions should be a example to the world of proper use of funds and lead the way for honest enterpise. It is time to clean up the fraud, waste and abuse in all government setasides. In fact it is time to get ride of all special set asides. All work should be given to those whose proven competence demonstrates thier selection for any of "my tax money".

5. sallyeverson - May 28, 2010 at 10:16 am

And when the GAO does a random sampling of any university or other organization that receives grant funding - would they find as many irregularities? Probably yes -as mentioned by #3 - the misuse by federal contractors must be far greater - given the amount of money involved -- which means a need for better oversight, period. Incompetence is an equal opportunity employer -- this seems like a tool for minority-bashing.

6. landrumkelly - May 28, 2010 at 10:51 am

Has the General Accounting Office changed its name?

7. landrumkelly - May 28, 2010 at 10:54 am

To answer my own question, the name was changed in 2004 so as "to better reflect the mission of the office." (Wikipedia)

Sorry.

8. landrumkelly - May 28, 2010 at 11:03 am

I hope that that mission includes investigating the University of Florida, among many others. Then we will be talking megabucks.

9. adriennegillespie - May 28, 2010 at 01:45 pm

I can see and sympathize with many of the comments made. I find it incomprehensible that institutions are willing to make such gambles with their own tuition dollars letalone grant monies.

The frustration as I see it is not so much about the institution receiving the funding (if it is upsetting where the funding is administered, then actively campaign to change the standards and selection criterias used by the GAO or other granting agencies), rather it is the lack of ethics involved. I want every institution receiving tax dollars to be able to articulate where the money was spent and to what end.

I do blame the institutions sited in the article for being shifty in their use of funds and I would not send my child or recommend others send their children to these institutions for these and possibly other reasons. At the same time, I am furious at the lack of oversight by our own government agencies to monitor the spending. At my home institution, there are several individuals that monitor grant monies with MONTHLY reviews to confirm that all spending is in line with the grant received. I know this because I have watched my peers articulate that while something might be a good idea, if it doesn't fit into the parameters of the grant, it cannot be paid for with those monies. It's time to hold everyone accountable. Funding should be pulled without appropriate documentation.

10. jwinzer - May 28, 2010 at 02:03 pm

A far better and fairer article was written here in Sept '09. I'm not quite clear on why both articles (if detailing two different reports) cited the exact same 'outrageous' examples of misspent funds. But at least the Sept. '09 article mentions how funding was spent in a REPRESENTATIVE sample and highlighted the important improvements most of the money was spent on. Additionally - that article pointed out why many of these institutions are particularly challenged in coming up with funds to support the important mission of serving under-served and students at far higher risks of non-retention.

Why was last year's article so much better?

Read it here for a more informative and less sensationalist piece of journalism.
http://chronicle.com/article/Report-Recommends-Better/48556/

11. jwinzer - May 28, 2010 at 02:57 pm

The front page ALONE of the testimony from the GAO shows that much of the 'sexy' story (alleging widespread abuse) hangs on the one Maryland institution. The larger point of the ACTUAL report appears to be NOT that abuse is widespread or extensive - but rather that the Department of Education has failed to develop adequate monitoring of the program. The conclusion is not that schools are abusing Title III funds (they have insufficient evidence beyond one dramatic example and three less dramatic examples) - but rather that the lack of sufficient monitoring leaves the funds AT RISK for fraud, waste, and abuse.

This chronicle article is the equivalent of using a REPORT criticizing lack of dental visits as evidence to argue that people's teeth are riddled with cavities.

http://www.gao.gov/new.items/d10659t.pdf

12. carremi - May 28, 2010 at 08:32 pm

i taught at one such institution and i was discouraged to see how low the bar was set for students to graduate ..it left me wondering, after graduating, if these students can even compete for jobs and professional schools, especially in today's economic climate

13. reformhigheredu - May 29, 2010 at 12:09 pm

I agree with #12. I work at an MSI and as #12 stated" I was discouraged to see how low the bar was set for students to graduate ..it left me wondering, after graduating, if these students can even compete for jobs and professional schools, especially in today's economic climate". The institution mismanaged grants in the past, yet they were still awarded federal grants. Current employees use these grants to place themselves in positions in which they have no experience. They do this as a way of increasing their salaries ( a self promotion at the expense of taxpayers). Every university/college that receives federal grants should be monitored (being an MSI does not entitle it to be shielded from monitoring).

14. workplacebeliever2 - June 02, 2010 at 10:47 am

I guess I am a little disappointed in what I am reading. We read one report and then become armchair experts.I confess to some nostalgia for the time when we used to gather all information on a subject, objectively take a look and then render an informed opinion. The facts are grants need to be monitored both on site and through off-site agencies and that some (underline some)schools, public or private, minority serving and predominantly majority race, mismanage funds. The comments regarding academic standards at minority institutions I accept as opinions, but they are actually irrelevant here and belong to another type of discussion. The GAO is concerned with auditing the money trail although I do question the politics of the timing of such reporting whenever it happens even though I think it's a shame to have to think that way. Such is the world we live in. Oh, by the way, I am a minority person, that works for a grant that serves low-income first, generation students a good proportion of whom are considered members of a minority group. I am at a public, predominantly white institution that has had the grant I work under since the late seventies. The grant has been monitored and received funding successfully every grant cycle period. Most importantly, I adhere personally and professionally with the ethical guidelines set forth in the grant, even while no one is looking because ultimately it comes down to the personal ethics of each employee.

15. michaelchamberlain - June 04, 2010 at 08:53 pm

@workplacebeliever2: I enjoyed your pose after slogging through others that you pointed out, thanks for the steady hand while drudging through the slug. I especially appreciate how you cut to the most serious issues: ethics, personal responsibility, and a commitment to the ideals that fostered the grant-world at the beginning.

Let us concede that few conclusions can be drawn from this article, much less any understanding of the problem's scope, depth, context, or even definition. What strikes me in both the article and the comments, some of them anyway, is the invisibility of the students. Well-educated adults caught spending others' money foolishly, it must be good copy, otherwise we wouldn't be so bombarded with so many variations of it all day.

The theft of the futures of the young by their educators is a story that could be told fresh, and it could lead to some interesting places. Forget indictments or the absence of indictments, forget regulations, enforcement, possible sanctions. Filtering everything through legal or public policy frameworks leaves little but salacious tidbits to to recount. How did the educated castes wander into a world in which all discussions of morality are the province of the unsophisticated, embarrassing to readers and beneath the better media? Do we demand these flat, unidimensional reflections of our world, a few salty bits inside, even as we claim to deny it? Do we shy away from the world's complexity and the sound judgment it requires of us? Or worse (and you know it's common) do we tack away from the eternal moral puzzlers because we could never sound smart discussing them? Or worse: someone outside the sphere might express things that way, and we're not the kind of people who...

When these colleges were hardened by segregation and buoyed by a conviction that there was good in the world, when they were some of the finest institutions of any kind on the planet, they would have scorned these men. Once chastened and perhaps ostracized for a time they could redeem themselves, usually and only through acts of genuine contrition. If you are young and of the grant-supported "gifted" caste this may seem absurd, but having the ability to discern sincerity, genuine contrition, and in a word character was more highly regarded than anything anyone can aspire to today, in our world. Read again the insipid justifications, ask yourself what "character-building" can take place when the young observe professors and administrators spending it because they got it on what they want now, maybe a little taste for the supposed beneficiaries now and then. It's hard not to suspect that those invited in are so wise to the game they're never detected playing it; also of course if they make you look good. Doesn't it seem that what they really ask of their students (and the world around them) is complicity? To my mind, this story's menu of interpretive happy meals - "dumb, clumsy, outside the lines, culpable?" tells us something interesting and and something ugly about complicity, how it has become a badge of identity, the tribal affiliation of people who write up grants for money and become eligible for awards. The wrongest thing about the story is its reluctance (perhaps inability) to ask anybody if ever they thought anything might be wrong. Just the opposite, in fact: it seems to want to shout, we'd never judge or hint at the possibility of judgement, we're on the inside, archly, get your paper here (and your next reporter too). We're the voice of the people who aren't the kind of people who..."

16. michaelchamberlain - June 04, 2010 at 08:54 pm

your pose? "your piece" of course

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