Tag: GAO

Keep Moving, There’s Still Nothing to See Here

In dribs and drabs the plot thickens in the quiet little saga surrounding the GAO’s brutal and broken August report on for-profit colleges. The latest development is the near-silent transformation of the GAO office that produced the knee-capping report that was later quietly reissued with lots of new, for-profit-exonerating material.

I say “near-silent transformation” because word about it somehow got to the Coalition for Educational Success, a career college advocacy group.  Yesterday, CES issued a press release on the matter, and this morning I contacted GAO’s public affairs office about it. To the GAO’s credit, their public affairs folks quickly sent me a copy of a memo announcing the end of the Forensic Audits and Special Investigations (FSI) team. Sadly, it was clear that there would be no public announcement of the change, which is utterly consistent with the behind-your-back way GAO has handled every development in this story. Well, every development save the very public release of the original, fatally flawed report.

Especially concerning is the following passage in the memo, which suggests that the for-profit college report provided the ultimate impetus for giving the FSI a new identity. This despite the FSI having done investigations in numerous other areas:

Since the Forensic Audits and Special Investigations team was formed in 2005 the team’s body of work has resulted in numerous accomplishments and benefits to the Congress and the public. To ensure good work continues and to bring greater management attention to the group and more seamlessly integrate its work with GAO’s program teams as well as the audit and investigative sides of the unit, today I am announcing several changes. These enhancements will also ensure greater attention to the issues that led to the need to produce the errata to the for-profit schools report and by the subsequent inspection.

So why does the group need “greater management attention”? And what exactly are “the issues that led to the need to produce the errata” to the August report?

As a member of the public it sure would be nice to know the answers to these questions, especially since these are the guys who are supposed to be holding the rest of the federal government ”accountable.” For proprietary schools’ employees and investors — the people who were most hurt by the dubious August report — these are thing they absolutely should know. But the GAO insists on telling us that nothing major went wrong while refusing to share information we’d need to confirm that. It’s not only totally unsatisfactory, it only makes you even more suspicious.

Abolish Federal Job Training Programs

A report from the Government Accountability Office finds that the federal government administers 47 different employment and job training programs at a cost to taxpayers of about $18 billion. The GAO excluded another 51 programs that could be considered as providing job training assistance, such as student loan subsidies.

The takeaway from the report is that there is a lot of duplication, and thus excess bureaucracy and inefficiencies. Moreover, the GAO says that “little is known about the effectiveness of most programs.” Nonetheless, Congress unflinchingly funds these programs even though the GAO has been issuing reports with similar findings since the 1990s.

Coinciding with the GAO report, Sen. Tom Coburn (R-OK) released a paper that singles out 25 particularly egregious examples of federal job training programs abusing taxpayer dollars. It’s the sort of thing that government apologists will dismiss as “anecdotal,” but when it comes to government programs, where there is smoke, there is usually fire. And if the anecdotes help undermine support for such unwarranted federal interventions, all the better.

One problem I have with Coburn’s paper is that it concludes with recommendations that amount to rearranging the deck chairs on the Titanic (e.g., consolidate programs, narrow program objectives, and better target funds). Coburn says that these programs need better “program metrics.” However, I was once responsible for program metrics as a budget official in the state of Indiana, and I can attest that politics render such endeavors a fool’s errand.

Coburn’s paper is at its best when he cites James Bovard’s observation that the government doesn’t need to be involved in job training:

As aptly considered by scholar James Bovard, the government has taken on a role more appropriately filled by the private sector. Bovard writes, “The fallacy underlying all job training programs is that the private sector lacks the incentive to train people for jobs. This is like assuming that farmers don‘t have an incentive to buy seed, or that auto manufacturers lack incentive to seek out parts suppliers. Businessmen naturally prefer that all the factors of production – including labor – be readily available. But where there is a shortage of skills and demands for services, there will be an incentive to train.”

The American Society for Training and Develop estimates that “U.S. organizations spent $125.9 billion on employee learning and development in 2009.” In addition, there are untold private options for job seekers: headhunters, counselors, recruiters, temporary work agencies, career fairs, internet resources, charities, and various civic organizations.

As Coburn correctly puts it:

The federal government could best help displaced workers by opening foreign markets to U.S. goods and services and creating an atmosphere that attracts and retains investment and productivity in the U.S. This can be accomplished in part by reducing unnecessary regulatory burdens on small businesses and employers, and ensuring stable and predictable government policies so employers can make short- and long-term investment and management decisions.

Dear Defamed: Trust Us, We’re the Government

With the release of a new report analyzing a quietly amended Government Accountability Office study that’s been used to club for-profit colleges, fear of GAO bias has reached a fever pitch. Sadly, the GAO’s response to the report does anything but assuage that fear.

To get a decent sense for the government abuse both surrounding, and possibly perpetrated by, the GAO study in question, it’s worth a quick rehash of events.

Basically, the study was requested by Sen. Tom Harkin (D-IA), the chairman of the Senate Health, Education, Labor, and Pensions Committee who has been waging war against for-profit colleges on the suspicion that the sector is rife with fraud, waste, and abuse. To get data to support his suspicion, Harkin asked the GAO to conduct “secret shopper” research in which investigators pretending to be prospective students visit schools to discover fraudulent admissions and financial aid practices.

In August 2010 the GAO released selected findings in testimony to Harkin’s committee and an accompanying report. The GAO said that it found abuses in all the schools it visited, which Harkin and others suspicious of profit-seekers seized on to assert that the sector is, indeed, teeming with fraud.  That the GAO’s report explicitly noted that the sample of schools it visited was non-random and, therefore, its results impossible to apply to all of for-profit higher education was no matter: the rhetoric of those with a bias against for-profit schools was off and running.

In November, while for-profit schools sought unsuccessfully to get all the recorded and other material needed to substantiate the GAO’s findings, the GAO silently slipped a revised version of the report out, one that featured numerous changes, all of which redounded to for-profits’ favor. And it wasn’t just correcting minor oversights: There was lots of recorded dialogue that had been missing from the original report, material that the GAO must have known about before issuing it’s initial, very damaging report.

Which brings us to the present day, and the new report that tears apart the amended version of the GAO study. Using available audio recordings of the shoppers’ visits – and many recordings and other evidence is not available, being held by the GAO and U.S. Department of Education – investigators from the firm of Norton/Norris, Inc., commissioned by the Coalition for Educational Success, report that only a quarter of the GAO’s findings can be substantiated after factoring out missing recordings. In other words, an already crumbling report seems to be utterly collapsing.

So is the GAO apologizing for this, or at least saying they’ll make all their material available? No way, as their statement to Inside Higher Ed makes clear:

“The consultants hired by the Coalition to discredit the report never contacted GAO for explanations and failed to take into account many factors, including the fact that not all information in the report can be found on the audio tapes posted to the Internet,” Chuck Young, GAO’s managing director for public affairs, said in an e-mailed statement. “For example, GAO turned over some videotapes to the inspector general at the Department of Education due to evidence of serious wrongdoing uncovered by investigators. Audio from those visits was not able to be posted. There were also written materials that were examined as part of the work and are not on the tapes. We are reviewing the tapes to see if there were any segments that were not provided to the committee.

“But the bottom line remains that a GAO review team independent from the investigators who did this work examined the report and found no material flaws in the evidentiary support for the overall message of the testimony and consequently our findings did not change. We did issue the errata at their suggestion to clarify our work and provide more precise language. We continue to stand by the overall message of this report.”

You don’t have to suffer from tinfoil-hat paranoia to see real and potential government abuse all over this sorry episode. First, opportunist politicians and others misused the initial GAO report to smear the whole for-profit sector. Then, once the damage was done, the GAO made significant changes to their report without even so much as issuing a press release. And now, as even the amended report is being ripped to shreds, the GAO’s response is basically “you can’t have access to the evidence being used against you, and you don’t need it: We’ve already decided we’re right and you’re wrong.”

Now, are for-profit schools pure and blameless? Absolutely not: Norton/Norris confirmed several of the GAO’s findings, and some findings they questioned are probably accurate. Moreoever, as I’ve pointed out before, many for-profit schools are happy to take students carrying taxpayer dollars despite knowing there’s little chance that those students will ever finish their studies. Of course, that makes those institutions no different from many public and nonprofit private schools about which Sen. Harkin evinces no concern. 

Ultimately, though, much more important than the immediate effect of all of this on for-profit schools is the lesson it offers for all Americans: Run afoul of the sensibilities of the wrong politicians – especially if you make a deal with the devil and take government funds – and government can hobble you without ever worrying about due process, transparency, or just plain fairness. All it has to do is make accusations.

Head Start Fraud

It’s been a tough week for the Department of Health and Human Services. As I discussed earlier, the Government Accountability Office reported on fraud problems with the Child Care and Development Fund program. Another new report from the GAO finds fraud problems with HHS’s Head Start program.

GAO investigators attempted to register children from fictitious families in Head Start programs in six states and the District of Columbia. The GAO created 13 fictitious families that earned too much income or possessed other characteristics that would disqualify the children from participating in Head Start. The result is embarrassing:

In 8 out of 13 eligibility tests, our families were told they were eligible for the program and instructed to attend class. In all 8 of these cases, Head Start employees actively encouraged our fictitious families to misrepresent their eligibility for the program. In at least 4 cases, documents we later retrieved from these centers show that our applications were doctored to exclude income information for which we provided documentation, which would have shown the family to be over-income. Employees at seven centers knowingly disregarded part of our families’ income to help make over-income families and their children appear to actually be under-income. This would have had the effect of filling slots reserved for under-income children with over-income children. At two centers, staff indicated on application forms that one parent was unemployed, even though we provided documentation of the parents’ income. A Head Start employee at one center even assured us that no one would verify that the income information submitted was accurate.

The GAO finding is not surprising given that previous reports show that HHS does a poor job administering the program.

In 2000, the GAO found that 76 percent of Head Start grantees reviewed were not in compliance with financial management standards. In a subsequent review, more than half remained out of compliance. In 2005, the GAO reported that HHS still couldn’t adequately identify financial management weaknesses of Head Start grantees. In 2008, the GAO reported that HHS still had not undertaken a comprehensive assessment of Head Start’s risks, and said that it had made “little progress” in ensuring that the data it collects from grantees are reliable.

But as a Cato essay on Head Start explains, the program’s biggest problem is that it isn’t effective in helping children from low-income families succeed later in life:

In 2010, HHS released a long-anticipated study of Head Start’s effectiveness, which is the most rigorous analysis to date. The program is supposed to give disadvantaged children a “head start” in life. However, the study found almost no advantages to children in kindergarten and grade one from having gone through Head Start, compared to children who had not.

Of the 112 measurements in the new HHS study—which covered areas such as academics, socio-emotional development, and health—only a handful showed any statistically significant benefit to participants of Head Start. In addition, most measured benefits disappeared once more rigorous statistical methods were applied. In other words, there was virtually no benefit to children of having attended Head Start.

After 45 years and $166 billion in spending, it’s apparent that this Great Society relic isn’t the best way to help disadvantaged children.

Opponents of federal welfare programs are often accused of being unconcerned about the needs of the poor. However, the burden of proof should be on the advocates who claim that federal bureaucracies and concomitant subsidies are the best option for assisting the less fortunate. Head Start, and other smoldering embers from the Great Society’s “War on Poverty,” continues to show otherwise.

GAO’s Damning Report on ‘SPOT’

Via the Identity Project’s “Papers, Please” web site, and despite my colleague David Rittgers’ excellent post from yesterday, I note last week’s utterly damning Government Accountability Office report on the SPOT program. “SPOT” stands for “Screening Passengers by Observation Techniques.” In the program “BDO’s,” or “Behavior Detection Officers,” observe travelers in airports, pulling them out of line if a secret list of behaviors signal that they’re a likely threat.

The thing is:

TSA deployed SPOT nationwide before first determining whether there was a scientifically valid basis for using behavior and appearance indicators as a means for reliably identifying passengers as potential threats in airports. … TSA state[s] that no other large-scale U.S. or international screening program incorporating behavior- and appearance-based indicators has ever been rigorously scientifically validated. While TSA deployed SPOT on the basis of some risk-related factors, such as threat information and airport passenger volume, it did not use a comprehensive risk assessment to guide its strategy of selectively deploying SPOT to 161 of the nation’s 457 TSA-regulated airports. TSA also expanded the SPOT program over the last 3 years without the benefit of a cost-benefit analysis of SPOT.

The Israeli airline El Al uses behavior detection, counters the TSA—as did DHS Secretary Janet Napolitano when I asked her about this report at a meeting of the DHS Privacy Committee Tuesday.

The GAO report notes that El Al’s processes, which are different from the TSA’s, have not been scientifically validated. As of 2008, El Al had 34 aircraft, operating out of one hub airport, Ben-Gurion International. There are 457 TSA-regulated airports in the United States. In 2008, El Al had passenger boardings of about 3.6 million; one U.S. airline, Southwest, flew about 102 million passengers that year.

From late May 2004 through August 2008, BDOs referred 152,000 travelers to secondary inspection. Of those, TSA agents referred 14,000 people to law enforcement, which resulted in approximately 1,100 arrests. TSA officials did not identify any direct links to terrorism or any threat to aviation in these cases. GAO noted its inability to determine if this is a better arrest rate than would occur under random screenings.

GAO also determined that at least 16 individuals allegedly involved in terrorism plots have moved at least 23 different times through eight airports where the SPOT program has been implemented. SPOT caught none of them.

The Government Accountability Office is a master of understatement, leaving conclusions for readers to draw. Mine is that the $1.2 billion in planned spending on the program over the next five years will be a wasteful producer of civil liberties violations.