All smoke, no fire

Title I monitor has a good article on the Reading First scandal that you should read.

All you need to know about this so-called scandal can be summed up by looking at the contortions OIG went through to establish a "conflict of interest."

The legal issue, however, is complicated. The RMC Research Corporation of Portsmouth, New Hampshire operated three contracts — totaling nearly $40 million — to provide technical assistance to states and districts on Reading First. Its contract with ED contained boilerplate federal conflict-of-interest language designed to prevent “the existence of conflicting roles that might bias a contractor’s judgment” and stave off an “unfair competitive advantage.”

Got that? RMC's contract contained standard conflict-of-interest (COI) boilerplate.

But when RMC later subcontracted the actual operations to three regional centers — at the University of Texas, the University of Oregon, and Florida State University — the contracts did not contain the conflict-of-interest clause. The clause also was absent in consulting agreements between RMC and its technical assistance providers. As a result, the OIG said, “they may not have disclosed any actual or potential” conflicts of interest.

RMC's failing to put the COI boilerplate in its subcontracts is a technical infraction at best. The question OIG was supposed to be investigating was whether the technical assistance providers had actual conflicts. Apparently, the answer to that question was "no they didn't" or else we would have gotten a detailed accounting of all the actual conflicts from OIG. Instead, we got the statement that the technical assistance providers "may not have disclosed any actual or potential" conflicts of interest. That's something a senior auditor tells a junior auditor before telling the junior auditor to go out and find conflicts. Go get 'em, son.

Apparently, the junior auditor failed to find anything useful using this standard, so the OIG switched gears to salvage something.

The conflict of interest standard is much more clear-cut, and at the same time, more limited, than the OIG’s suggested standard of “bias or impaired objectivity.”

What's up with that? Since when do auditor's get to suggest their own standards instead of following the standard set down by law. Love 'em or hate 'em, we elect politicians to make laws and standards like this, not unelected OIG auditors who are supposed to be looking for real live legal violations instead of fabricating their own based on their own made-up standards. Title I explains the problem with OIG's made-up standard.

A conflict-of-interest standard would, at the very least, suggest that someone providing technical assistance for Reading First not have a connection to reading programs for students in kindergarten through the third grade, the program’s constituency. But a technical assistance provider who has designed a McGraw-Hill math product, to use a hypothetical example, while perhaps not having a direct conflict of interest in recommending against a Harcourt reading program, might have “an appearance of bias or impaired objectivity” in connection to any McGraw-Hill product.

See? Under the real COI standard OIG couldn't find any real or potential conflicts. So they made up their own COI standard to fit the the "violation" to the facts. This is how the OIG found violations by finding a technical assistance provider who's written a college level textbook for a publisher who also publishes textbooks eligible for Reading First funds. And, even under this contrived standard, OIG was only able to find “an appearance of bias or impaired objectivity” as opposed to actual bias or actual impaired objectivity. Even OIG admits this:

The OIG acknowledged there “is no federal requirement that contractors, subcontractors or consultants be vetted for bias or impaired objectivity” but said that not having one damaged the “integrity and reputation” of RMC and the department.

So what we're left with is no actual legal violations, but OIG's opinion that DoE should have gone beyond the requirements of the law and should have adopted OIG's made-up COI standard because not to have done so damaged the “integrity and reputation” of DoE.

I suppose there exists a forum for OIG to give their opinions somewhere, but one place that I'm certain those opinions do not belong is in an audit. There is no room for judgments or opinions in an audit. Only clear violations of law, which in this case there were not, are supposed to go into OIG audits.

Are all OIG's as incompetent as DoE's OIG?