Federal Funds Misspent by Jackson Group, Audit Says

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Washington--Education Department auditors have determined that Push For Excellence Inc., a nonprofit educational organization headed by the Rev. Jesse L. Jackson, should return to the government at least $736,000 and perhaps as much as $1.7 million in federal funds that were improperly spent.

The auditor's recommendations for repayment were contained in seven separate reports that covered $3.9 million received by the Chicago-based group between 1978 and 1981 from the Education, Health and Human Services, Labor, and Commerce Departments.

According to the reports, which were completed between April and July of this year, Mr. Jackson's organization spent $736,972 in violation of federal rules covering grants and contracts.

The audits also indicated that the group could not provide adequate documentation or other evidence to prove that an additional $1.1 million was spent in accord with the regulations. The auditors recom-mended that the government agencies order the repayment of those funds pending further investigations.

Push For Excellence Inc., known as push-excel, is a motivational program for inner-city youths and their families that was founded by Mr. Jackson in 1977. In September 1981, the Education Department temporarily revoked an $825,000-grant to the group because it reportedly had refused to allow federal auditors to review its accounting procedures. The grant was reinstated after the group agreed to the review. (See Education Week, Sept. 21, 1981.)

The release of the audit reports comes at a time when Mr. Jackson is said to be considering a campaign for the Democratic Party's Presidential nomination.

push-excel officials in Chicago referred all calls concerning the audits to John H. Bustamante, the organization's Cleveland-based general counsel.

Mr. Bustamante could not be reached for comment, but a member of his staff reported late last week that he was "headed for Washington."

On Aug. 19, Mr. Jackson told The Washington Post that "in the final analysis, we'll do like everyone else. We'll pay the difference."

He added, however, that he considered news of the audits "selective persecution."

Most of the audited programs were intended to improve attitudes among black inner-city youths about education and to help them move into the labor market following graduation.

The Education Department, for example, awarded a grant of $45,037 to the group in September 1979 to finance a student peer-counseling program to be run in cooperation with the District of Columbia public schools.

The audit of that program said that push-excel claimed salary costs of $24,620 for three positions although its contract with the department authorized only one position. The auditors disallowed the $14,623 that was claimed for the two unauthorized workers.

push-excel received another grant of $1 million from the department in March 1980 for similar programs in Buffalo, Chicago, Denver, Los Angeles, Chattanooga, Tenn., and Kansas City, Mo.

The audit of that program indicated that the organization claimed it paid the project's director $18,000 but actually paid him only $16,000. Moreover, the auditors disallowed all of the director's salary because they said it represented "dual compensation."

"We learned that for the same time period the project director was compensated by [the group] for full-time effort, he held a full-time administrative and teaching position which included acting as the project director on an [Education Department] grant at a university in Pennsylvania," the auditors noted.

They also disallowed the remaining $9,455 claimed by the group as salary expenses because it allegedly was used to pay employees while they attended a push-excel national convention in New Orleans. While they were there, they engaged in fundraising activities, the audit report said.

Vol. 02, Issue 42

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