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Federal Audit Criticizes Management of State Scholars Initiative

By Michelle R. Davis — January 31, 2006 2 min read

The State Scholars Initiative has been a pet project of President Bush’s and could guide the Department of Education in defining a “rigorous” high school curriculum under a bill now pending in Congress. But the program has had a rocky past, a recent, highly critical federal audit shows.

The program grew from a privately financed initiative in Texas to encourage students to take more demanding high school classes to a federally funded national project that was plagued by poor management. Last fall, a new organization took over the program with the hope of widening its scope.

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Bill Pushes ‘Rigorous’ Curricula

The endeavor is getting a fresh look in light of a budget bill—close to final passage by the House—that includes a measure encouraging students from low-income families to pursue a challenging high school curriculum in return for extra college grant money. The measure would give the U.S. secretary of education authority to define a “rigorous” curriculum for students hoping to qualify. One possibility would be citing the State Scholars curriculum.

So far, 14 states are participating in the State Scholars Initiative, and there are plans to add another eight to 12 in the near future, said Terese S. Rainwater, the director of the initiative.

The initiative, which since October has been run by the Western Interstate Commission for Higher Education, or WICHE, based in Boulder, Colo., is funded by a two-year, $6.1 million grant from the Education Department’s vocational education office.

States that are accepted for participation receive $300,000 over two years for the initiative. But a state’s business roundtable or chamber of commerce—not its education department—manages the money.

Texas Origins

Before WICHE took over management of the program, it was run by the Austin, Texas-based Center for State Scholars. The center was in part formed and managed by the Texas Business and Education Coalition, which had also created the Texas Scholars program in 1992.

The Texas Scholars program caught the eye of George W. Bush, who was first elected governor of Texas in 1994. In 2002, after Mr. Bush became president, the federal Education Department awarded the Center for State Scholars a four-year, $9.6 million grant to essentially take the Texas Scholars program national.

But oversight of the federal money fell short, federal auditors say. A Jan. 17 audit by the Education Department’s office of inspector general cited numerous administrative problems, including a lack of accounting and documentation for nearly $2 million of the federal money.

Also, the audit found that the Education Department itself had not followed proper procedures in awarding the grant. Though the department had called the grant “unsolicited,” the audit found that “the application was not genuinely unsolicited because it was completed with the department’s endorsement and involvement.”

Because of the management problems, the Education Department contracted with WICHE to run the program, and federal officials have high hopes for its future.

“It’s a really exciting idea of building coalitions between business leaders and states,” said Braden Goetz, the director of the Education Department’s policy-research and -evaluation staff. “It is a real-world connection.”

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