In what appears to be shaping up as another black eye for the eRate, the chairman of the U.S. House of Representatives committee investigating instances of program waste, fraud, and abuse says he will ask the Atlanta school system to turn over documents explaining how it spent–and allegedly mismanaged–$73 million on building what is described as a lavish computer network.

“It certainly wouldn’t surprise me if certain members of that school district find themselves at a table facing a panel of congressmen in Washington,” said Rep. James Greenwood, chairman of the investigations subcommittee of the House Committee on Energy and Commerce.

The Atlanta Journal-Constitution reported May 23 that school officials built one of the nation’s most elaborate computer networks, often choosing the most costly electronic gear on the market and buying far more than the district needed. The newspaper found more than $3 million worth of idle electronics sitting in storage.

It also found that the school district, which used both local and federal funds, routinely paid too much because it did not seek competitive bids.

The committee chaired by Greenwood, R-Pa., is investigating waste and mismanagement in the federal eRate program, which distributes up to $2.25 billion a year to schools and libraries for telecommunications services, internet access, and the hardware necessary to wire classrooms for the internet.

Financed by the contributions of telecommunications carriers to the Universal Service Fund–the costs of which are passed on to consumers in the form of surcharges on telephone bills–the program does not pay for classroom computers.

Greenwood, who plans his first congressional eRate hearings June 9, characterized the newspaper’s findings in Atlanta, compared with other school districts, as “pretty darn bad.”

“We will have examples of school districts at our hearings who have done this right and school districts who have done it wrong,” he said. “I don’t think Atlanta is likely to be on the did-it-right panel.”

Among the Journal-Constitution‘s findings:

  • At one elementary school, equipment reportedly powerful enough to operate a small school district runs just 20 computers. At another, Atlanta billed the program for electronics for twice as many classrooms as the school has.

  • At three Atlanta elementary schools, the cost of bringing high-speed internet access to classrooms reached about $1 million. Suburban Forsyth County, by contrast, paid about $200,000 for the same result at much larger schools.

  • Price played little role when Atlanta chose vendors, so the district routinely paid them too much. Vendors charged widely different prices for similar equipment. Hundreds of invoices indicate full price when education discounts of up to 45 percent are common.
In a May 25 column in the Journal-Constitution, Atlanta school Superintendent Beverly Hall acknowledged problems with the district’s eRate program, including poor record-keeping and contracting procedures. She blamed most of the shortcomings on former employees and said she has beefed up eRate oversight.

“I am not especially proud of our system’s management of eRate, but I am proud of the results,” Hall wrote. “Children who would not otherwise have even basic internet access are utilizing state-of-the-art technology to learn.”

The Atlanta school board called the network a “state-of-the-art” system that can handle the district’s technology needs for years to come.

But congressional critics of the eRate believe the program gave away too much money to Atlanta schools.

Most school systems in Georgia and across the nation don’t get all the eRate funding they apply for, because the demand is so high. The poorest districts must chip in only between 10 percent and 20 percent of the cost of eRate-eligible projects, and until now they could ask for as much money as they wanted.

“It strikes me that if the Atlanta school board had decided to build this system with its own money, it probably could have built a good reliable Chevrolet,” Greenwood said. “If it had been using federal monies, it might have opted for the Cadillac. But since these were free dollars from telephone subscribers, anonymous telephone subscribers all over the country, they went for the gold-plated Rolls-Royce.”

The Federal Communications Commission (FCC), which oversees the eRate, is considering a number of proposed changes to eliminate opportunities for program waste, fraud, and abuse. One of the agency’s ideas is to reduce the maximum discount allowed for internal connections requests, so school systems would have to contribute at least 30 percent of the cost of wiring projects themselves.

Greg Weisiger, eRate coordinator for the state of Virginia, said the problems in Atlanta demonstrate why this might be a good idea.

“They evidently did a lot of bad things, and I wish Virginia’s schools could have had some of that money,” Weisiger said. He added that the city’s example should give the FCC an incentive “to establish regulations governing ‘economic reasonableness’ as a criteria for evaluating funding requests.”

eSchool News attempted to reach Atlanta superintendent Hall for comment on the eRate story, but a call placed to her office’s media relations department was not returned.


Rep. James Greenwood, R-Pa.

Atlanta Public Schools

Atlanta Journal-Constitution

Federal Communications Commission