Cleveland schools missed out on millions in technology rebates, but why is unclear, panel says

The Cleveland schools' construction watchdog panel has found the district failed to claim millions of dollars in federal rebates for technology upgrades, sticking taxpayers with some of those costs.

At issue are rebates for Internet and communications equipment installed in new schools in one of Ohio's largest districts from 2006 to 2011. The district was pre-approved for nearly $12.3 million in rebates through the "E-Rate" program but got only about $3.7 million, The Plain Dealer ( ) reported.

The difference is more than $8.5 million, with about $6.6 million never claimed — enough for a new elementary school or football stadium.

Exactly why Cleveland schools missed out on that money remains unclear, especially because the district and the state paid for the work and sometimes got extensions on the rebate deadlines, the newspaper said.

In some cases, the district didn't submit appropriate receipts for reimbursement, CEO Eric Gordon told the school board. The lack of reimbursements "is a problem and it must be addressed," and the district is working on that, he said.

The question is: How? The watchdog commission urged officials to sort out what happened so they can re-apply for rebates or seek restitution as appropriate.

A statement from the district said it "acknowledges serious flaws in past practice" but that it's up to the panel, the Bond Accountability Commission, to provide evidence for authorities to substantiate any claims of fraud that might arise.

The commission's new report said it has tried to get answers for over a year but hasn't received a clear explanation from the district or all the documentation it requested.

Employee departures, "bureaucratic dysfunction" in the district, non-compliance by contractors and even possible fraud could be factors, the panel concluded.

Two criminal cases from recent years also raise concerns about possible links to the technology upgrades, the newspaper said. Most of the work was completed by a company whose owner has since been sentenced to prison for racketeering and other charges in a county corruption case. And the contracts were awarded when the district employed a chief operating officer who was later convicted of racketeering, theft in office and records tampering.


Information from: The Plain Dealer,