Audit: Education officials involved in 'fraud scheme'

ATLANTA - Former state education officials were involved in a "complex fraud scheme" to manipulate a competition for lucrative grants awarded by a federally funded program, according to a state audit released Thursday.<br /> <br /> The audit said that the competition for grants from the 21st Century Community Learning Centers Program was "severely flawed" and failed to follow state and federal regulations between 2006 and 2007. It also concluded that at least two state education employees appear to have used their positions for personal gain.<br /> <br /> State school Superintendent Kathy Cox requested the audit after her staff reported irregularities in the program, which is administered by the state. Education officials agreed with the report's findings, and vowed to place more internal controls to oversee the grant process.<br /> <br /> The department declined further comment, as a federal investigation is still pending.<br /> <br /> The 21st Century program began in 1998 to help fund out-of-school programs - including tutoring, homework help and sports activities - for students and the community. The programs tend to take place before or after school, or during holidays, weekends or summer break.<br /> <br /> The funds are supposed to be doled out using a competitive grant system. But the audit found that the program, which awarded $10.6 million that could potentially pay out more than $46 million over five years, was hijacked by a handful of employees.<br /> <br /> The audit traces the problems to May 2006 when a grant consultant decided to exclude 23 of the 54 applicants from consideration and doled out the grants to the remaining organizations using an unknown formula. As a result, some of the applicants ranked highest by an external review panel received little or no money, while lower ranking applicants benefited, the report said.<br /> <br /> The scheme involved at least three former education officials, according to the report.<br /> <br /> A policy director and an executive secretary both had a "contractual relationship" with groups that received a grant but would not have otherwise. It also said that the grant consultant who made "radical" changes to the formula had inappropriate contact with a member of an outside review panel.<br /> <br /> The employees no longer work for the department of education, said spokesman Dana Tofig.<br /> <br /> ---<br /> <br /> On the Net:<br /> <br /> http://www.doe.k12.ga.us/ <br /> <br /> <br />