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Audit Alleges Education Leaders Council Misused Federal Grant, Urges Repayment

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The U.S. Department of Education has released an audit of the Education Leaders Council, charging that the Washington-based organization misused federal grant money for its Following the Leaders project.

Between July 1, 2002, and Dec. 31, 2004, the ELC received more than $23 million in grants from the U.S. Department of Education’s Fund for the Improvement of Education. The federal aid was for the ELC’s Following the Leaders school improvement program. Congress appropriated an additional $9.7 million for the project in the 2005 fiscal year, prompting critics to question the group’s spending habits and effectiveness.

The ELC was started in 1995 as a conservative-leaning national voice for school improvement.

The audit, released Jan. 31, also found that the organization “drew down and expended federal funds it was not entitled to.” In fiscal year 2003, ELC overdrew its grant by $495,326, which the report blames on inadequate controls within the organization.

In addition, more than 28 percent of the grant costs reviewed in the audit were either questioned or unsupported, the report said. Among the $232,000 in questionable costs were expenditures for meals, entertainment, and travel that did not appear to be related to the Follow the Leaders project. Also noted by the report were expenses that federal grants cannot be used for, such as alcoholic beverages, advertising, and fundraising.

The U.S. Department of Education’s Inspector General’s Office, which conducted the audit, recommended that the department require ELC to reimburse the nearly $500,000 in grant money that it overdrew, and either refund or provide adequate documentation for the spending that was questioned in the report. The office also asked that ELC maintain evidence that all of its employees have reviewed the policies and procedures for using the federal grant money.

In Dec. 2005, ELC submitted a response to the first draft of the audit, claiming that the group had “long since corrected many of the accounting entries, a fact which is given minimal attention in this report.”

Though officials representing ELC could not be reached for comment on the final audit report, they have 30 days to reply to the department.

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  • Learn more about the U.S. Department of Education's Fund for the Improvement of Education. The department charges that federal grant money awarded to the Education Leaders Council from this program was misused.
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