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Published in Print: October 6, 2004, as Atlanta Responds to E-Rate Scrutiny

Atlanta Responds to E-Rate Scrutiny

Report From District Admits to Mistakes, But Denies Fraud

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Atlanta school officials, under close scrutiny from federal agencies and Congress for alleged mismanagement of $60 million in E-rate funding, have issued a report defending the district’s use of the federal technology aid.

The 116-page report, released Sept. 24, says that district employees lacked “clear guidance” on the education-rate program’s constantly evolving rules and procedures, and gives a detailed explanation for the alleged violations.

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Return to the main story, “Cash Freeze for E-Rate Hits Schools”

The alleged improprieties by the district include: applying for E-rate funding for schools that did not ultimately get E-rate products or services, keeping shoddy records, improperly working with ibm Corp. to win an E-rate contract, and duplicating work and equipment.

“[Atlanta Public Schools] has, by its own admission, struggled with some record-keeping and regulatory requirements. … APS acknowledges these technology and managerial challenges, as well as a lack of optimal oversight of some areas of the program,” the report says.

However, the district disputes the allegation that it received E-rate funding for which it did not qualify.

“APS competed with other E-rate eligible school districts to seek maximum E-rate discounts to which they were legally entitled,” the report says.

Rodney Moore, the general counsel for the Atlanta school system, pointed out that the report did not find fraud. Rather, “it found inefficiencies. And not every system has been scrutinized to the level we’ve been scrutinized.”

The U.S. House Energy and Commerce Committee, which is investigating waste, fraud, and abuse in the $2.25 billion-a-year program of telecommunications aid for schools and libraries, ordered the 51,000-student Atlanta district this past summer to document its participation in the program.

District Under Fire

Atlanta is one of a number of districts and service providers nationwide that have come under fire for alleged misuse of E-rate funds. ("E-Rate Audits Expose Abuses in the Program," Feb. 12, 2003.)

Seeking to clear the cloud of controversy over the district, school officials there hired an outside accounting firm to audit Atlanta’s use of E-rate funds and sought advice from an Arlington, Va.-based E-rate consulting firm, Funds for Learning. The district also recently started an internal investigation of its E-rate program.

The congressional investigation came after The Atlanta Journal-Constitution ran news articles earlier this year detailing alleged mismanagement. Examples cited by the newspaper included school officials’ inability to show what they had purchased with E-rate funds, overpayments for goods and services with E-rate money, and millions of dollars’ worth of unused equipment.

The Universal Service Administrative Co., the nonprofit agency that operates the E-rate program for the federal government, may order Atlanta to refund part of the $60 million the district received from 1998 to 2002 if it finds the district misused the money.

In addition, USAC is waiting to decide on a $14 million E-rate request from the school district, pending the outcome of the federal investigation.

Vol. 24, Issue 06, Page 18

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