School Internet Program Audit Shows Fraud and Waste

uid0mako writes "CNN is reporting on the abuses of E-rate. E-rate is a government-sponsored program that provides discounted Internet access and internal connection gear such as wiring, adaptors and servers to underprivileged schools. One of the incidents includes $24 million spent on 74000 wireless network cards that never left the loading dock."

I'd say thats fraud:

[wishiwascool]

24000000 / 74000 = ~$324/NIC

guess they weren't buying Netgear cards at that price... ouch!

Situation Nortmal...

[BJZQ8]

I have watched the e-Rate program since its inception, and am neck-deep in it now...this sort of thing happens over and over again. It is a multi-billion-dollar boondoggle, typical government program. Schools are forced to hire entire staffs, or outsource, just to fill out the hundreds of pages of paperwork. The end result? Rejection, or perhaps more paperwork. But in any case, all of those billions are funneled to IT giants like Microsoft and IBM, as well as the Telecom companies that are given "preference" for their stone-age T1 technology. Want to put in your own glass fiber between buildings? Not covered by e-Rate, because that would step on the phone company's toes. Better to lease a dozen T1 lines, in their eyes. The whole thing needs to be gamma-irradiated and shot into deep space...and the "Universal Service Fee" that covers it eliminated.

Socialism does not work

[gcaseye6677]

I'll keep this in mind when I get my next phone bill and notice the 30% taxes added on to it. At least half of that is the "Gore Tax", which was put to such great use as we see. Now that almost all American public schools have their intarweb installed, I see no reason to continue this financial rape of the public. This program should be phased out, since it has clearly outlived its usefulness. It's nothing less than irresponsible to suggest that a federal tax be used to pay the monthly internet bills for schools and libraries (neither of which are supposed to be federally controlled to begin with).

Surprised?

[Anonymous Coward]

Why the surprise?

This is just another line charge placed on the American taxpayer designed to make some elected official either "feel" that he or she is "trying to make a difference" in the lives of some poor students. What a waste of the taxpayers money!

When will the dialogue in the US ever turn to spending cuts and elimination of wasteful programs in order to solve tax revenue shortfalls?

Money well spent?

[Blackaxis]

"The program, run by the FCC and administered by a not-for-profit corporation, is widely credited for helping poor and rural schools get wired, giving students better learning tools." .. Of all the problems with poor and rural schools, they spend money on this? Technology is a good thing, but when my rural school only had an 800 average SAT score (of the people motivated enough to take it), you have to wonder why resources get wasted like this.

Predictable due to design of 1996 Gore tax

[XavierItzmann]

a) 1996 - Gore/Clinton tax *your* phone bill to "put internet on every school"

b) Any school can spend whatever money and get the ERATE fund to reimburse the school

Waste and abuse happens because this tax should not even have existed to begin with. If school districts had to spend their own money, based on *local* taxation, this sort of careless purchasing would not happen.

You vote for politicians who introduce taxes, you bring this upon yourself.

Re:Socialism does not work

[ThisNukes4u]

Actually, thats the idea. Local governments are supposed to be more in touch with the local public and their needs than the big, scary fedral government. In practice this is far from the truth, as states' rights are being corroded, such as President Bush wanting to ban abortion in all of America. This should be unconstitutional. Every state should choose their own policy on abortion, as it affects the individual states more than the government. This is only one example.

Re:Remodeling at ratepayer expense

[shione]

If they needed new carpeting and painting in the first plae but couldnt get the funds for it, I don't think it's that bad as it would have been funded by the gov't anyway.

Re:Predictable due to design of 1996 Gore tax

[velo_mike]

If school districts had to spend their own money, based on *local* taxation, this sort of careless purchasing would not happen.

Sure it would, schools are notorious for misspending money no matter how they get it. As long as it comes from mandatory taxes, this kind of waste will continue.

Re:Socialism does not work

[Otter]

I'll leave the flaming about socialism to others, but what clearly does not work is throwing a surcharge, tax or fine on one thing (telephone service, cigarettes, insider trading violations), accumulating a huge slush fund and then expecting that money to be used for its advertised purpose.

It's happening again with the fines on mutual funds (that are supposed to be going to "investor education") and it will happen again as soon as the vultures start shaking money loose from the fast-food companies.

Re:Predictable due to design of 1996 Gore tax

[Anonymous Coward]

Not entirely true...schools cannot spend anything they want and get it reimbursed. School's e-rate reimbursemnent is based on the number of "disadvantaged" students in the district. A school with a higher rate of (economically) "disadvantaged" students gets a higher percentage back on some services. For example...a school with a very high rate of disadvantaged students, like many inner-city school districts, might get 100% back on their internet and phone services, but a school with few disadvantaged students might not get anything back.

You're being sarcastic, right?

[Chibi Merrow]

I sure hope you're being sarcastic and that's not a kneejerk reaction. The problem isn't companies, the problem is SCHOOLS being morons and taking all this "free money" and spending it on multi-million dollar solutions when a $100 switch and a box of cable would fit their needs.
The real problem is that this all paid for through a tax on your phone bill (think: Universal Service Fee, meaning most people never realize how much they pay for it) and the structuring of the program encourages waste. "Buy the biggest and best things that you can so we can get good PR for helping the children!" Meanwhile, anyone who questions the program's merits stands a chance of being labeled "against education" or even a racist, since the program (supposedly) exists to help poorer schools.

A better article [nytimes.com] on this can be found at the New York Times.

Re:Socialism does not work

[gcaseye6677]

Given a choice between paying for the fraud and waste in my local government and paying for Wanker County, Oklahoma's fraud and waste, I'd rather keep it local. At least I could vote against the people who were responsible. And if the citizens of a certain area, such as Chicago, are OK with government waste, that's their business. Besides, in this country we have this thing called a constitution, which limits federal power. Yes, this has been massively abused already, but I'd rather minimize federal taxes going to pay for things the feds were never intended to regulate.

Apathy

[mccalli]

I'm reading a lot of comments along the lines of "This is a surprise?", and "so? That's the way these things go". This is depressing.

Look - a clear and serious fraud has been commited. People should be livid about this, even more so if this kind of behaviour is the norm. Just because it always happens doesn't make it right, and only pressure and accountability will ever sort the situation out. Shrugging the shoulders and going "so?" is really not all that helpful.

Cheers,
Ian

We must restore property rights

[Anonymous Coward]

By turning all landowners into renters from the school board we have given these bureaucrats way too much power. Year after year landowners pour money into the school system even if they have never placed their children into the local system. This power imbalance can't be fixed without dropping property taxes and restoring property rights. Money is power and spending all of the money budgeted (and more) is the way you preserve the power. Our school systems have become a NEA jobs program first, an underfunded teachers retirement plan second, and an educational system third (if at all). Until we end tyranny and restore property right this will never be fixed. The power balanced is too skewed as long as the right to endlessly tax property exists.

how much were these cards?!?

[CaptainFrito]

that amounts to $324 per wireless card. In these quantities, they should run about $40 even for latest-and-greatest super b/g cards.

I think that the never leaving the loading dock issue is the smallest issue here. the price should tell you that actually shipping these cards was probably irrelevant from the beginning.

wonder how much they spent on the access points...

Re:from cnn:

[jmauro]

In 1999 the installation wasn't as easy or clean as it is today so it probably took a good hour. Drivers were buggy and sometimes Windows wouldn't play nice with them. The cards also cost in the neighborhood of $275-$300 to begin with. The price on those silly things has just come down in the last 2 years.

Re:Remodeling at ratepayer expense

[fatray]

The local schools see this as free money. They can put in the biggest, stupidest possible proposal to the feds. If it is approved, great! Remember, the guys in DC that administer the program are paid to give out money to schools, not to teach them about networks.

If the local schools thought it was important to wire the schools, they would find the funds and would design a much more cost-effective system. This has the effect of concentrating power in Washington. I think that local school boards should avoid starting to rely on a steady stream of free money from DC. The money is free now, but might come with a lot of strings later.

Re:Socialism does not work

[Anonymous Coward]

I'll leave the flaming about socialism to others

Because there are far too many people willing to fill that position. :)

For those who are new here: basically, any time a government program is shown to be wasteful, way too many people on SlashDot are more than happy to suggest throwing out all federal programs because "taxes are evil" and all that. Basically, they like having all their teeth pulled when one gets a cavity so that it never happens again. Someone usually suggest switching to Libertarianism, a form of government in which planning doesn't exist (e.g. if your community can afford internet access for its schools, great, while if your community can't afford schools at all, that's just how the free market works).

What can I say... welcome to a web forum where half the people think that roads, police, water service and so on appear out of thin air when they're needed. Personally, I figure it's the high school kids who have lots of ambition and who think they know all about the world because their high school teachers tell them they're smart. Normal folks, including normal anti-socialist and/or pro-libertarian types, have a more realistic approach to this sort of issue.

"Democracy is the worst form of government except for all those others that have been tried."
-Winston Churchill

The system is self-perpetuating

[mi]

I actually know a very intelligent girl, whose father is a public school teacher and administrator. When we argued about private schoold being generally better, I mentioned, that, may be, being a good teacher is not the same as being a good administrator. Boy, did she get mad. I mean, really, sincerely, mad at me. She said, her dad had worked for free for several months, because the school had no funds. This time, I kept to myself my opinion, that this was, indeed, a sign of a devoted teacher, but bad administrator.

Anyway, guess, who did she study to become, and is currently becoming? A Washington lobbyist! No kidding...

Re:More fallout from the 80s

[Anonymous Coward]

You stupid fucking retard. This shitstorm was dumped on us by the Clinton/Gore administration, you ignorant pile of rotted baboon jism.

Re:You're being sarcastic, right?

[Anonymous Coward]

It's rare when a $100 switch and a box of cable will result in a reliable infrastructure.

Sure, it might work in your house where you are the sole maintainer and the sole customer. But it's hard to imagine that a box of cable and a $100 switch will supports thousands of people in a production-quality environment (students or not).

Or should school business be maintained at a rate substantially lower than a quality business?

Re:Remodeling at ratepayer expense

[John Jorsett]

(And heck, at least they were upgrading facilities that the county might not otherwise budget for.)

The problems is, you're taxing people in other areas to pay for your school's facilities. Schools are, and should be, local entities. If the local taxpayers don't want to spend the money to maintain the infrastructure, then why should you and I, who don't even benefit? Then there's the whole issue of dishonesty - claiming the funds will be used for one purpose, while secretly doing something else with them. We have a highway "trust fund" that officially has billions in it, but has been borrowed against by Congress so that most of the money will never lay a single square foot of road. My local municipality has systematically looted the sewer fund. Now that routine pipeline breaks are dumping raw sewage into the ocean, they're screaming that the fund is broke and rates have to go up. Think of that next time some politician talks about another "trust fund" for some great purpose.

Well...

[ShadowRage]

tell us something that isnt new with the US public school system.

Thing is, the people who run the school system are not good with managing money. this is proven fact, the dont look into the best priced software, or hardware, or anything.
it's whoever treats them to the best lunch.

Re:Apathy

[lux55]

I agree 100%.

Unfortunately, apathy is an eventual product of democracies that stop considering free thought about justice to be a meaningful endeavour. We're living for our material desires now (fast food, movies, cable tv, going to the bar, etc.), not for any sort of sense of integrity or "doing what's right". We'll play rhetorical tricks, saying things like "what _is_ 'right' anyway? how do we know for sure?". When we see others doing things like this, as long as it doesn't negatively affect us directly, who cares?

This is a predictable effect of the belief in moral materialism sweeping over many parts of the world right now, which makes it all the sadder to see happening because it's getting worse and there's no end in sight.

Re:Socialism does not work

[gcaseye6677]

Call me an asshole if you wish, but I do not consider it my responsibility to buy computers for your wife's school. If your local politicians are inept or they just don't value education, your schools will suffer for it. That's just life. Gated community or not, the people must decide they value education and elect a government that values it too. If your city or county cannot do that, don't come whining to the federal government nanny to make up for local incompetence. Yes, I know, think about the children, bla bla bla.

Re:Heard about this on Rush Limbaugh yesterday...

[deepfreeze77]

Yes of course, because if *you* survived on 2400 bps in 1989, then kids in school today should be able to as well? That's the worst kind of logic I've ever heard. The bottom line is this: Kids grow up these days with broadband all around them. Learning needs to be mentally stimulating to be effective. You can't take a kid who has been exposed to flashy presentations (video games, et al.) and put him in front of a TRS-80 connected to "that internet-thingy" and expect it to be effective.

It's also true that, 95% of the time, it's really not worth it to cowtow to the federal/state governments to get the "free" money they're giving out for education, but public school boards are afraid of the bad PR they will get if the public finds out there was "free" money being given away by the federal/state government and they didn't get it. Damned if you do, and damned if you don't. Education has become big business, and it's what is killing the Public School System.

Re:I'd say thats fraud:

[Servo]

Having worked in an educational environment before (community college), my guess is that the reason why they sat unused is because they didn't have the computers to put them in.

It is typical to do some sort of political purchase like this as to "spend money to look good" but then the tech types get involved and realize they just ordered 74k wireless cards for 200 386's.

Re:Let's get this over with...

[cluckshot]

How about lets really get real. The reason the cards stayed on the dock is that the school teachers/admin simply didn't know how to use computers in the first place. They were not going to use them, they were going to set them like trophies on their desks.

I have had a running fight with my daughter's teachers for 4 years now that they should send me emails if there are any problems. I have offered to add my address to their email address book and been forbidden. I have been told that writing me would take too much time but a parent teacher conference was ok.

This year I finally had one teacher who actually notified by email. The others NOT! Most teachers classrooms you find that the computer is neatly covered with a dust cover and maybe a potted plant is mounted on the top. (NOT USED EVER!) This spring our school system disposed of several thousand 3 year old computers which were "Out Dated" and replaced them with new ones. The new ones are used jsut as much as the old ones. (Get out your dust blower please!)

How about discussing this in the MEDIA or how the Gore Tax was passed without a Vote of Congress which is a violation of the US Constitution or ...

Re:schools careless purchasing

[velo_mike]

That's why I refuse to buy a house. I don't have any kids, and really don't care to pay out to send your kids (not yours, personally) to skool so they can cut class and talk about how teh new hiphob album is teh best(typos intentional).

I'm not refusing to buy - you're either paying it directly or their charging the landlord and he's passing it along in the rent bill - but property taxes are a huge consideration. Good thing I love rural areas.

Re:Socialism does not work

[walt-sjc]

You have fallen into the same simplistic trap. If the federal government killed these programs and dropped taxes 50 - 80%, local governments could afford to raise local taxes to pay for LOCAL things like police, roads, water service, etc. with NO assistance at all needed from the feds.

Local governments are MUCH MUCH more accoutable than the feds. I can go to a city council meeting and say NO to projects on a regular basis. I can pick up the phone and directly call my councilman and talk to him for a half hour or so. Try that with your senator and see how far you get.

The federal government has NO BUSINESS at all increasing taxes to pay for school programs. It's not their job. The federal government should only be doing federal scope projects that only the federal government can do, such as the military, air traffic control, trade pacts, treaties, space exploration, etc.

Have you ever been to DC? Ever seen the massive size of our government? It's disgusting, and that's only the tip of the iceburg.

Re:Socialism does not work

[lysium]

Last time I checked, greedy corporations taking billions from inefficiently-run funds does not constitute "socialism." Sounds more like a pluocracy to me.

===---===

Re:You're being sarcastic, right?

[ElvenMonkey]

Oh yeah... hell how I know that. "Here's a truck load of money for you to spend, but it must be spent on new computers." "We haven't got sufficient network infrastructure to deal with that extra load, we need a whole new distribution point." "That'll cost to much, you're only allowed to buy network cables" "But that means we'll have to use our spare old hubs and route all traffic down a single 100mb pipe" "so?" or even better, a few years back the government looked at support staff salaries, saw that they were crap and said "Right we'll set up a bonus scheme", so once a year I can apply for a bonus, jumping through a few hoops to get it. All of 150 GBP, PRE-tax (nice government, giving money to itself)

Re:Remodeling at ratepayer expense

[Warlok]

in keeping with the whole point of public free education.

Then I posit that publickly funded free education is a bad thing. It's a government run youth progandizing system designed to keep the overachievers held down, the active doped up on Ritalin, the stupid made to feel good about themselves, and everyone docile enough to never question government and authority.

A more educated populace is a more prodctive populace

When Alexis de Toqueville visited the U.S. in the early 19th century, he found the populace was mostly literate and well educated. Note that this was before Massachusetts instituted the Prussian model of public education (conditioning young "commoners" to follow simple orders, be literate enough to read gun manual, and obedient enough to respond to bells and sounds - they were training them to be cannon fodder in future Prussian wars), when people were regularly schooled at home or in community run schools.

meaning that we'll have a stronger nation more easily to support us when we retire

That is the most socialist thing I have heard anyone say about education, and supports most of my vehement opposition to public education. Quite frankly, I don't want your kid's fscking money when I retire - that's why I have a retirement account and savings, so I can retire an not be leech on society. And I'll be damned if my kid's money is gonna go to support your socialist ass when you feel you'v earned a rest. You want a rest, grasshopper, stop playing away the summer and start saving for it.

defend us when we are invaded and too old to fight on the front lines

Are you saying that, should an armed invasion of the U.S. happen, that you wouldn't hobble your broken-down socialist ass onto your lawn to defend your home and family? I'd defend my home and family with a ball-point pen and some shipping twine in a wheelchair if I had to. Oh, but wait, you're a socialist (see previous paragraph) - I guess you'll just have to wait for the government to tell you what to do or save you. Have fun.

blame the cold war. The Federal government literally prints money

You're not going back far enough. Blame the Whig/Republican party during the Civil War. They illegally setup the national banking system and started printing fiat paper currency, backed by nothing more than promises and hot air. They setup to protectionist tariff system that crippled the economy and has left it wheezing ever since. They started the basis of the modern military-industrial complex we know and love today. Everything since then is resting on the cracked foundation the tyrant Abraham Lincoln left us with.

Re:You're being sarcastic, right?

[Chibi Merrow]

Well I don't know about our friends on the right side of the pond, but here in the US we spend entirely too much on education and spend even MORE on it every year... Meanwhile almost none of it actually reaches the classroom. The problem here isn't how much money is spent, it's how the money is (mis)spent.

I also work in the public sector as a tech in a local government. I *know* the pay sucks, but that's not why I'm doing the job. It's entirely possible to get very qualified IT people in a public sector job; the problem is it takes time and effort and interest to find them. The government instead usually just decides to throw money at the problem instead of taking the time and energy to actually solve it.

Really what it comes down to is the government shouldn't be involved in education anyway. Let education become a free market like everything else and spend public money on more important things like defense.

Re:For the Greater Good?

[Warlok]

Because you've done something for the greater good?

You're drinking the government Kool-Aid if you think giving your kids and your money to the government to lock them inside a brick building six hours a day, keeping them calm and docile with drugs if necessary, taking years to teach reading (which is a necessary skill, easily learnable in 6-8 weeks with phonetic skills), and forcing socialization on them is for the "greater good".

Your arguments about taxpayers are spot on - no one wants to pay for it, so in steps the government to steal the moeny from you for it (yes, it's theft - they take my money without my consent under threat of violence. Muggers are actually more honest about it - they produce the gun before they ask for my wallet). So, if the current system isn't working and no one is happy with it, why are we continuing to try to patch it up?

The Indians have a saying: When you find yourself riding a dead horse, the best thing to do is dismount. However, it seems that when it comes to public education (which I posit is a dead horse), we are more willing to paint the horse a festive color, try to revive the horse, put more people on the horse, feed the horse more high-quality oats, or anything other than get off the damn thing.

How can you help? Simple - get off the horse. Home school your kids - when the government agents come knocking on your door to ask why your kids aren't in school, tell them your home-schooling, don't need your schools, thankyouverymuch and close the door. When you reward poor choices with more money (like raising funding to schools based on the number of kids in the school), the best way to help is to reduce your involvment in the behavior.