E-Rate News

Houston School District Reaches Settlement Over False E-Rate Claims

• By Scott Aronowitz
• 03/09/10

Houston Independent School District (HISD), the largest district in Texas, with more than 200,000 students enrolled in 297 schools, has reached a settlement with the United States Department of Justice over allegations it filed false claims related to the federal E-Rate program. Under the terms of the settlement, the district has agreed to pay $850,000 to settle a civil claim and to forfeit several million more in federal funds requests.

The Justice Department had alleged that HISD violated the terms of the E-Rate program by providing false information pertaining to its requests for program funding and engaging in non-competitive bidding practices and that district personnel received unlawful payments from vendors in the form of trips, meals, and personal loans.

E-Rate is a program overseen by the Federal Communications Commission (FCC) and funded by fees collected from telephone users. It's designed to help financially challenged schools and libraries purchase the necessary hardware and pay the monthly connection fees in order to have reliable access to communications technologies.

"The E-Rate Program provides critical support for Internet access and wiring to the most under-served schools in the country," said Tony West, assistant attorney general for the Civil Division of the Department of Justice. "We are committed to protecting the integrity of this important program that benefits our neediest children."

Because of its violations, explained Civil Division spokesman Charles Miller, "HISD forfeited money it had requested between 2002 and 2007. By reaching the settlement with the government and finalizing [a] compliance plan with the FCC, the district is now again eligible to receive new E-rate funding.  HISD will now go through the normal E-Rate funding process again and so may get additional E-Rate funding."

The Justice Department said it has been vigilantly pursuing efforts to combat fraud in requests for federal funding and that under the enforcement power granted the department by the False Claims Act, it has recovered more than $3 billion since January 2009.