In the wake of a government report criticizing the U.S. Department of Education (ED) for how it has awarded money for several discretionary grant programs, agency officials say they have taken steps to shore up the process. But at least one lawmaker claims the process continues to favor companies with close ties to the White House.

The report, issued in February by the General Accountability Office (GAO), was the result of an investigation requested by Rep. George Miller of California, the senior Democrat on the influential House Committee on Education and the Workforce. Though it failed to prove that ED made any legal missteps in how it awarded federal grants to applicants–all of which were awarded under former Education Secretary Rod Paige–the report detailed three examples in which investigators say the department made exceptions to benefit certain applicants. In at least two of those cases, auditors said, the groups receiving the funds had close ties to the Bush administration.

In one example, the Arkansas Department of Education got $2.3 million for a project with K12 Inc., a virtual-school company founded by William Bennett, who was education secretary under President Reagan. In its review, the GAO found that federal officials altered their selection criteria on the fly and expanded their final list of winners to include the K12 program, decreasing the total amount of several other awards as a result.

In another instance, the American Board for Certification of Teacher Excellence received a $5 million grant, even though two of the three independent reviewers who examined the board’s proposal voted against funding it. That program is run by the Education Leaders Council, a conservative group of education experts often criticized for cozy relations to the White House. One of the council’s founders, Eugene Hickok, was undersecretary of education under Paige.

The GAO found four other occasions in which grants went to applicants who had not been recommended by anyone on a three-person panel that reviews proposals, thus violating agency rules.

Miller used the report to bolster his claim that department grants often are awarded to corporate executives with political clout, and not solely of the merits of the applications.

“The Bush administration funneled scarce public education dollars to its political cronies at the expense of school districts all over the country,” said Miller, a frequent critic of the Bush administration, in response to the report’s findings. Miller said the report was “yet another example of the Republican culture of corruption, where the rules are broken in order to benefit political allies” and added that the department under current Education Secretary Margaret Spellings “has still failed to take all the steps necessary to prevent recurrence of this type of abuse.”

Though a request for comment from an eSchool News reporter was not returned by press time, a written response from the department said Spellings and her staff have taken “major steps to improve its procedures for awarding competitive grants, and these steps have resulted in increased accountability.”

GAO investigators agreed that ED has taken steps since 2003 to reform its process for awarding grants. Yet even with those changes, the GAO found, the department has been lax at times–such as in failing to document whether applicants had been screened to see how well they manage money.

The report made four suggestions for ED to follow to shore up its procedure for awarding grants in the future: (1) Develop a more systemic format to select unsolicited proposals for further consideration by peer reviewers. (2) Ensure that all plans are final before grant competitions open. If plans must be amended during a competition, ED should provide assurances in writing that any such amendment is necessary and has been approved by a senior department official. (3) Implement a departmental policy to screen all applicants for compliance with audit requirements before making an award, and ensure that outstanding issues–if there are any–are addressed beforehand. And (4) ensure that program officers better document required checks, such as budget analysis and eligibility screening.