-Caveat Lector-
Thanks, Mike. This fits in with the work Insight is doing to expose what's
going on in other government agencies. Insight financing, I believe, comes
from Washington Times whose reporter George Archibald is mentioned at the
bottom of this article.
-----Original Message-----
From: MIKE SPITZER <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED] <[EMAIL PROTECTED]>
Date: Monday, June 11, 2001 7:34 PM
Subject: [CTRL] NM: AIM: Cooking the Books at Education
>-Caveat Lector-
>
>Cooking the Books at Education
>
>By Cliff Kincaid
>Accuracy in Media
>Saturday, June 9, 2001
>
>
>In Washington, during congressional debate over President Bush's "Leave
>no child behind" education initiative, Republicans have been arguing for
>an increase of 11 percent in spending by the Department of Education,
>while Democrats have been arguing for a 35-50 percent increase. The
>department currently operates on a budget of $44.5 billion a year. But
>the sad truth, which has escaped the attention of most of the major
>media, is that there is no real guarantee that any of this money will
>actually get to the students that may need it. This is because the
>Department of Education has been so mismanaged that it can't
>account for the money it is spending.
>
>The amount of missing, mismanaged or stolen money reaches $6 billion.
>Outright looting and embezzlement of Education Department funds by
>agency officials in the Clinton administration cannot be ruled out, as
>there was no security over the obligation and disbursement of federal
>funds. Officials of the agency may have conspired to "cook the books"
>and spend more money than Congress had appropriated. This would be a
>violation of the federal anti-deficiency act, which bars federal
>agencies from disbursing more funds than authorized by Congress.
>
>Stories about government waste, fraud and abuse are common, but the
>scandal at the Department of Education has reached a new and
>unprecedented level. This is an agency out of control. Yet the story
>remains largely untold. Recognizing the dimensions of the problem,
>Rep. Charles Norwood of Georgia has suggested the department be shut
>down until the problems are solved.
>
>Revelations of the limited investigations conducted so far include 21
>Department of Education employees who wrote a total of 19,000 checks in
>one year, without getting approval from any other official, totaling $23
>million; employees using agency credit cards to buy items such as
>computers, software, cell phones and Internet service that may have been
>diverted to personal use; and $1.9 million of Department of Education
>grants intended for two school districts in South Dakota diverted to buy
>real estate and luxury sport utility vehicles.
>
>Ignoring a Whistleblower
>
>At a recent background briefing in Washington, D.C., a member of the
>leadership of the House of Representatives was asked about the case of
>John Gard, the whistleblower from the Department of Education who has
>sparked the numerous investigations into the department's finances. The
>congressman had never heard of Gard. He was also not aware that the
>Department of Education had failed three straight audits and that the
>new secretary of education, Rod Paige, has expressed the hope that it
>may be able to pass an audit in about 18 months.
>
>This is the agency that Congress and the administration plan to give
>billions more dollars. It makes no sense.
>
>John Gard has not sought the attention of the media. However, this is
>no excuse for ignoring his sensational charges, which have been the
>subject of congressional hearings and an Office of Special Counsel (OSC)
>investigation. The OSC determined that his allegations of "gross
>mismanagement" to the tune of billions of dollars are true. When the
>OSC report was issued on Jan. 31, the Associated Press ran a good story
>about Gard and some of his charges. But it was published back on page
>21 of the Washington Post. This is typical of how the agency's problems
>have been covered.
>
>Whistleblower Talks to AIM
>
>Gard was recently interviewed by Accuracy in Media, which has championed
>the cause of whistleblowers in the federal government. As damning as
>the OSC report was, Gard said it amounted to a whitewash because it
>failed to reveal the extent of the corruption.
>
>He told a harrowing story of how he battled to expose waste, fraud and
>abuse in the department only to be made the target of reprisal and
>retaliation, eventually being escorted from agency property by armed
>federal security guards.
>
>Gard was a systems accountant in the Office of the Chief Financial
>Officer. He exposed serious problems in the department's Grants
>Administration and Payment System (GAPS), under which dozens of agency
>employees were potentially able to funnel education department funds to
>their personal bank accounts or their friends and associates without
>being caught. The system was such that it was impossible for the
>department to monitor who was tapping into the money and how much was
>being diverted.
>
>It may be a stretch to say that all $6 billion was funneled out of the
>department in this way. Some may have been wasted or mismanaged. On
>the other hand, Gard asks the central question, "Where did the money
>go?" The system was so open to abuse that it may be impossible to
>determine how much money was stolen and by whom.
>
>In one sensational incident, Gard found unsecured checks lying on top of
>an employee's desk and reported the matter to the Office of the
>Inspector General of the department. These checks could have been
>cashed by the employee for personal use.
>
>For blowing the whistle, Gard said he was attacked by the then-chief
>financial officer, Donald Rappaport, as a "spy" who could not be
>trusted.
>
>In a filing with the OSC, which is part of the public record in the
>case, Gard's lawyers also say that agency employees who helped cover up
>the agency's "mismanagement, waste of funds and potential fraud
>activity" were rewarded with "enhanced job assignments, promotions,
>awards, recognition or enhanced office space."
>
>Gard said his concern all along has been that the agency obey the laws
>of the United States. He believes agency employees have violated
>several federal laws on financial record keeping and other related
>matters.
>
>He is still being paid, but he has no assigned duties. He spent most of
>his time on his lawsuit against the department. He is willing to return
>to the department under the Bush administration and try to help solve
>the problems which have plagued the agency. But his offer to do so has
>been ignored
>
>Gard emphasizes that he is not advocating the elimination of the
>department but wants to see the funds that are disbursed recorded
>properly and accounted for. He has said, however, that the problems are
>so large that the department should be placed under the supervision of a
>special master appointed by a federal court or put into receivership.
>This has been done in the past with grossly mismanaged agencies of the
>Washington, D.C. city government.
>
>Paige Turns the Page
>
>The corruption problem is so massive that Secretary Paige was forced to
>hold a press conference on April 20 specifically on fraud and
>mismanagement in the department. Putting a happy face on the problem,
>it was at this event that he said his hope was that the agency could
>pass an audit in 18 months.
>
>Paige also announced that Deputy Secretary-designate Bill Hansen and
>Undersecretary-designate Gene Hickok would head a reform effort. Hansen
>has been approached by one of Gard's lawyers about Gard helping try to
>clean up the mess. Gard said he hasn't heard anything back from Hansen.
>
>At the press conference, Paige suggested the problem in the agency
>involved the mismanagement or loss of only $450 million, and that $250
>million of that had been recovered. The $450 million figure was put
>forward at an April 3 congressional hearing, where the agency's
>inspector general testified.
>
>The hearing was covered by the Associated Press, the Washington Times on
>page 6, and the Washington Post back on page 21. This event also
>featured a discussion of the agency's failure to pass three consecutive
>audits. However, the evening news programs of the three major networks
>completely ignored the hearing.
>
>But Gard emphasizes that this $450 million figure is far too low. The
>AP and the Washington Post have noted a discrepancy with the Department
>of Treasury's accounting of what the Department of Education has spent
>that amounts to $6 billion over the last three years under Secretary
>Richard W. Riley.
>
>Gard believes this is a more accurate figure reflecting the true amount
>of how much money is missing or unaccounted for. Again, this is because
>there was no security over the disbursement of federal funds when the
>agency implemented GAPS. Gard says that, despite the change in
>administrations, there's still a reluctance to tell the American people
>about the full extent of the problem because both major parties want to
>spend more on education.
>
>Officials at Paige's news conference claimed that financial problems are
>going to be addressed through the installation of a new software
>program, Oracle Federal Financials. Gard told us that this would not
>solve the GAPS disbursement and security problems.
>
>Gard said the Oracle software may resolve some accounting problems if it
>is installed correctly. He said he knew of one federal agency that had
>used it properly. Ironically, it had been installed at the Corporation
>for National Service by one of his former associates at the Department
>of Education, after he had been relieved of his duties. The Department
>of Education has been without a chief financial officer for two years
>and it is apparent that the agency has had a very difficult time finding
>a new one. The agency has been without an assistant secretary for
>management for five years. This suggests the problems are simply too
>large to be addressed and that the agency may not be salvageable
>
>Honor Gard
>
>President Bush has called upon federal employees to "disclose waste,
>fraud, abuse and corruption to the appropriate authorities." Gard did
>just that and has suffered for it. He is suing the Department of
>Education.
>
>Gard should be compensated for the damage to his career. President Bush
>should restore Gard to his previous position or even promote him. If
>Secretary Paige wants to make sure that Department of Education money is
>used to "teach children," he should take the initiative himself and
>immediately put Gard back to work.
>
>But Gard's name was never raised during Paige's news conference. That's
>a strange way of encouraging employers to expose corruption. Yet,
>without Gard back at the department, it will be hard to have any
>confidence that the financial problems will be solved.
>
>The only reporter at the press conference who seemed familiar with the
>extent of the corruption was George Archibald of the Washington Times,
>who produced a page two story for that paper. Archibald has an
>understanding of the agency, having worked there under the president,
>Ronald Reagan, who wanted to abolish it.
>
>Reprinted with permission of Accuracy in Media (www.aim.org) from its
>AIM Report #9.
>
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