United States Government Accountability Office

GAO Report to the Ranking Minority Member, 

Education and the Workforce Committee, 

House of Representatives 

DISCRETIONARY 

GRANTS 

Further Tightening of 

Education’s 

Procedures for Making 

Awards Could 

Improve Transparency 

and Accountability 

February 2006 

 

GAO-06-268 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

February 2006

DISCRETIONARY GRANTS 

Further Tightening of Education’s 

Procedures for Making Awards Could 

Improve Transparency and Accountability 

Highlights of GAO-06-268, a report to the 

Ranking Minority Member, Committee on 

Education and the Workforce, House of 

Representatives 

www.gao.gov/cgi-bin/getrpt?GAO-06-268.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Marnie Shaul 

(202)512-7215 or shaulm@gao.gov. 

In the past 3 years, Education 

awarded an average of $4.8 billion 

annually in discretionary grants 

through its competitive awards 

process and through consideration 

of unsolicited proposals. GAO 

assessed Education’s policies and

procedures for both competitive 

awards and unsolicited proposals 

awarded by its Office of Innovation 

and Improvement in 2003 and 2004 

and determined whether it

followed them in awarding grants

in those years. GAO also reviewed

Education’s grant award decisions 

for several 2001 and 2002 grants to

determine whether the department 

followed its own policies. 

What GAO Recommends

GAO recommends several 

improvements to Education’s grant

award processes. Education agreed 

with all three recommendations for 

improving the competitive awards 

process and said it has 

implemented corrective actions. 

Education disagreed with GAO’s 

recommendation to develop a more

systematic approach to selecting 

unsolicited proposals and said it 

would not help the agency select 

high-quality applications. GAO

modified its recommendation to 

address some of Education’s 

concerns, but thinks collecting

some systematic information 

would help Education effectively 

screen applicants. GAO is not 

recommending the Secretary take

actions regarding the three 2001

and 2002 grants GAO reviewed in

detail because GAO found no clear 

violation of applicable statutes and

regulations. 

In 2003 and 2004, the Department of Education took steps to improve its 

procedures for awarding discretionary grants through competitions but 

certain procedures were not always followed. During this time, after 

Education introduced some new management controls to its competitive 

grants procedures, we found it generally adhered to these new policies. For 

example, GAO did not find evidence that Education reduced any applicant’s 

request without first conducting a budget analysis, as required, or that 

Education rescored applications after they had been peer reviewed. 

However, certain procedures were not always followed; for example, 

Education frequently did not finalize its plans for conducting competitions 

before starting the competitions—a step that would help ensure 

transparency in making awards. In addition, many files lacked 

documentation that the department screened the applicants, as required, to 

identify incompetent applicants, ineligible grantees, or unallowable 

expenditures. 

Since 2003, Education has also taken steps to reform its process for 

awarding grants based on unsolicited proposals, but it based its screening 

decisions on proposals that vary greatly and frequently provided extensive 

technical assistance. Following a departmental reorganization, Education 

established a centralized process for reviewing unsolicited proposals. 

However, these proposals, which Education used as a basis to certify that 

there is a substantial likelihood that the application will meet regulatory 

requirements, varied greatly in content and detail. GAO also found that 

Education provided extensive technical assistance to applicants, in some 

instances, providing applicants with the notes of peer reviewers and 

allowing applicants to revise and resubmit applications. Specifically, in 2004, 

10 of the 27 applicants did not get reviewers’ support and were provided a 

chance to re-apply. Of those 10 applicants, 8 revised their proposals, 

received favorable recommendations, and were subsequently funded. 

Prior to 2003, Education made exceptions to some of its policies in awarding

three grants, totaling about $12.3 million, where particular allegations were 

raised. Two of the grants were awarded through a competitive process, but 

GAO found that Education reduced funding to all of the grantees to expand 

the number of grantees funded and to accommodate awards to lower rated 

grantees. In doing so, Education altered its selection methodology after it 

developed and recommended a list of grantees. In one case, Education 

rescored and reversed the order of selected grantees after the peer reviewers 

had completed their assessments. Education awarded the third grant based 

on an unsolicited proposal and regulations require that the department seek 

recommendations from peer reviewers prior to funding. In this case, the peer 

reviewers could not agree on a recommendation. GAO found that Education 

lacked a process to reconcile disagreements among reviewers and awarded 

a grant that two of three reviewers did not recommend. Moreover, Education 

awarded four grants in 2001 for unsolicited proposals that had not been 

recommended for funding by any one of the three reviewers.
Contents 

Letter 1

Results in Brief 2

Background 5

In 2001 and 2002, Education Made Exceptions to Its Policies in

Awarding the Three Grants 9 

In 2003 and 2004, Education Strengthened Its Policies for 

Competitive Grants and Generally Adhered to Them 12 

Education Selected Unsolicited Proposals That Varied Greatly in 

Content and Provided Extensive Technical Assistance 15 

Conclusions 18

Recommendations for Executive Action 18 

Agency Comments 19 

Appendix I Scope and Methodology 21 

Appendix II Grants Awarded Based on Unsolicited Proposals 

(2003-2004) 24 

Appendix III Comments from the Department of Education 27 

Appendix IV GAO Contacts and Staff Acknowledgments 30 

Related GAO Products 31 

Tables 

Table 1: Comparison of Policy Guidance for 1997 and 2003 for 

Select Requirements 13 

Table 2: Grants Awarded in 2003 Based on Unsolicited Proposals 

(cumulative obligations as of November 30, 2005) 24 

Table 3: Grants Awarded in 2004 Based on Unsolicited Proposals 

(cumulative obligations as of November 30, 2005) 26 

Page i GAO-06-268 Discretionary Grants
Figures 

Figure 1: Education Grants—fiscal year 2005 (in billions of dollars) 5 

Figure 2: Fund for the Improvement of Education Appropriations, 

1989-2005 (in millions of inflation-adjusted dollars) 8 

Figure 3: Voluntary Public School Choice Funding in Fiscal Year 

2002 10

Abbreviations 

ABCTE American Board for Certification of Teacher Excellence 

ATRP Application Technical Review Plan 

FIE Fund for the Improvement of Education 

GAPS Grant Administration and Payment System 

IES Institute of Education Sciences 

IG Inspector General 

OII Office of Innovation and Improvement 

NCTQ National Council on Teacher Quality 

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reproduce this material separately. 

Page ii GAO-06-268 Discretionary Grants
United States Government Accountability Office

Washington, DC 20548 

February 21, 2006 

The Honorable George Miller 

Ranking Minority Member 

Committee on Education and the Workforce 

House of Representatives 

Dear Mr. Miller: 

In fiscal year 2005, the Department of Education (Education) provided 

more than $42 billion in grants to state and local education agencies, 

school districts, colleges and universities, and other organizations to 

conduct various program and research activities. While Congress directs 

the allocation of most of these funds, a small portion of this money—$4.7 

billion in 2005—is awarded by the Secretary either through program 

competitions or through consideration of unsolicited proposals. In the 

case of competitions, selection of awardees is governed by regulations and 

policies designed to ensure that federal funds are directed to those 

proposals of highest merit. In the case of proposals that are unsolicited, 

awards are to be made to grantees that are recommended for funding by 

external reviewers based on proposals they deem to be of high quality and 

national significance. 

Allegations were made that Education did not follow its policies in making 

the grant awards that benefited specific grantees. You asked us to review 

two grant awards—a competitive grant awarded in 2002 from the 

Voluntary Public School Choice program to the Arkansas Department of 

Education to fund its partnership with K12, Inc.,

1

 and a 2001 award based 

on an unsolicited proposal to the National Council on Teacher Quality 

(NCTQ). In the course of our review, program officials directed us to 

another competitive grant where they noted similar concerns as those 

raised in your letter. This third grant was awarded from the Credit 

Enhancement for Charter School Facilities Grant program to America’s 

Charter School Finance Corporation. The grants in question were awarded 

in 2001 and 2002 and Education has subsequently issued new guidance for 

making grant awards and has moved the grant programs in question to the 

 1

K12, Inc. provides on-line curriculum for students enrolled in public schools, including

students who were previously home-schooled or attended private schools. 

Page 1 GAO-06-268 Discretionary Grants
newly created Office of Innovation and Improvement (OII). We assessed 

Education’s policies and procedures for both competitive awards and 

unsolicited proposals in 2003 and 2004 and determined whether Education 

followed them in awarding grants in those years and we reviewed 

Education’s grant award decisions for several 2001 and 2002 grants to 

determine whether the department followed its own policies. 

To assess the policies and procedures in place for the 2003 and 2004 

competitive awards processes, we reviewed departmental guidance issued

in March 2003 that governed the grants awarded in those years. We 

reviewed a stratified random sample of 91 of the 521 competitive grants 

made by OII in 2003 and 2004, including all 10 grants with over $15 million

in obligations. All percentage estimates from this sample have margins of 

error of plus or minus 10 percent or less. To assess Education’s process 

for reviewing unsolicited proposals in 2003 and 2004, we reviewed 

departmental guidance and all 65 files for unsolicited grants awarded by 

OII in 2003 and 2004. We used the department’s Grant Administration and 

Payment System (GAPS) to identify all grants awarded in 2003 and 2004.

We assessed the reliability of the data in GAPS and found it to be reliable 

for our purposes. To review Education’s decisions to award the 2001 and

2002 grants, we obtained and reviewed departmental grant-making 

guidance in place at the time these grants were awarded. To determine 

whether or not departmental guidance was followed, we reviewed the 

official grant files for each of these grants, the corresponding files for the 

competitions that contain information on all of the applicants’ proposals, 

the competition plans, and external reviewers’ rankings and comments. In 

2002, 34 applicants competed for grants from the Credit Enhancement for 

Charter School Facilities Grant program and Education awarded five 

grants, including the grant in question. That year, the department also 

considered 21 unsolicited proposals and made awards to 18 grantees, 

including the grantee in question. In 2002, 46 applicants participated in the 

Voluntary Public School Choice grant competition and the department 

awarded 13 grants, including the grant in question. For additional details 

about our scope and methodology, see appendix I. Our work was 

conducted from May 2005 through February 2006 according to generally

accepted government auditing standards. 

In 2003 and 2004, after Education introduced some new management 

controls to improve its process for awarding competitive grants, we found 

the department generally adhered to its policies, although certain 

procedures were not always followed or documented. In our review of all 

25 competitions we found no evidence that Education made funding 

Results in Brief 

Page 2 GAO-06-268 Discretionary Grants
reductions without conducting budget analyses of the potential impact of

the cuts on the projects or rescored applications after they had been

assessed by expert reviewers. However, we found that some areas of the 

guidance were not always followed. In particular, Education’s competition 

plans were not finalized prior to the competition, as required and, as a 

result, could have been subject to change. In addition, in the sample of 

files that we reviewed we found many lacked documentation that 

Education had conducted reviews to screen out (1) incompetent or 

unreliable applicants by examining, among other factors, their past audit 

histories; (2) ineligible grantees; or (3) proposals for unallowable 

expenditures. Policy officers for grants said that they never implemented a 

policy to check a grantee’s audit history to ascertain an applicant’s ability 

to manage grant funds competently and reliably. Our file review confirmed 

that this check was rarely done. In addition, even though program officials 

said they perform checks for eligibility and analyze the applicants’ 

proposed budgets before grants are awarded, we found that about half of 

the files lacked evidence that these checks were completed. 

In 2003, Education also took steps to centralize and improve its process 

for reviewing unsolicited proposals; however, it still bases its screening 

decisions on proposals that vary greatly and frequently provides extensive 

technical assistance for some applicants. Following a departmental 

reorganization in 2003, Education established a centralized process for 

reviewing unsolicited proposals. To select among the proposals it 

received, senior OII officials told us they chose those proposals that 

aligned with the Secretary’s priorities. In response to an Education 

Inspector General (IG) report, Education revised it procedures to 

document better that required screenings were conducted and to ensure 

that only applicants recommended for funding by expert reviewers 

received awards. While Education developed a standard process for 

reviewing unsolicited proposals, it did not require that proposals be 

submitted in a standard format and, as a result, the proposals the 

department received varied greatly in content and detail. Nonetheless, OII 

has to make its determination that proposals are likely to meet regulatory 

requirements for exceptional quality and national significance on the basis

of these varying proposals. Also, OII provided extensive technical 

assistance to some applicants, including, in some instances, providing 

applicants with the notes of peer reviewers and allowing applicants to 

revise and resubmit applications. Specifically, in 2004, 10 of the 

27 applicants failed to garner the reviewers’ support and were provided 

another chance to apply. Of those 10 applicants, 8 revised their proposals, 

received favorable recommendations from peer reviewers and were 

subsequently funded. 

Page 3 GAO-06-268 Discretionary Grants
However, in awarding the three grants in 2001 and 2002, we found that 

Education made exceptions to its policies that benefited the grantees in 

question. For the two competitive grants, we found that Education 

officials reduced funding to all of the grantees to accommodate awards to 

lower-rated grantees and did not conduct budget analyses of the potential 

impact of these reductions on the proposals. In doing so, Education 

altered the selection methodology it had planned to use after it had 

developed a list of grantees recommended for funding. In the first 

competition, grantees’ requested amounts were decreased by 47 percent 

across the board—while the award to the grantee in question, which was 

the lowest ranked on the list—was reduced just 23 percent. In the second

competition, an Education official re-reviewed the two applications that 

were ranked just below those recommended for funding. In doing so, 

Education rescored the applications and reversed their rank order. This 

process resulted in the grantee’s in question receiving the higher ranking. 

The list of grantees to be funded was then expanded to include the grantee 

in question. Consequently, the highest ranked grants received funding 

reductions between 16 percent and 40 percent while the grantee in 

question received a funding reduction of about 50 percent. On the third 

grant, which was an unsolicited proposal, we found that Education lacked 

an objective process to reconcile disagreements among reviewers and 

awarded a grant that two of three reviewers recommended against 

funding. Furthermore, we found that Education awarded four grants in 

2001 that had not been recommended for funding by any one of the three 

reviewers, contrary to Education’s regulation. 

While the new management controls Education put in place to govern its 

competitive awards process provide reasonable assurance that awards are 

made appropriately, we are recommending that the Secretary take steps to

ensure that the new controls are consistently followed and that programs 

officers better document the steps that are required under the new 

controls. Education agreed with these recommendations and said it has 

implemented corrective actions. In addition, to improve the process for 

selecting and awarding grants based on unsolicited proposals, we are 

recommending that the OII develop a more systematic format to select 

proposals for peer reviewers. Education disagreed with this 

recommendation and said it would not help the agency select high-quality

proposals. While we have modified our recommendation to address some 

of Education’s concerns, we think that collecting some systematic 

information would enhance Education’s ability to more effectively screen 

the quality of its applicants. Based on this review, GAO is not 

recommending that the Secretary take actions regarding the three 2001 

Page 4 GAO-06-268 Discretionary Grants
and 2002 grants we reviewed in detail because we found no clear violation 

of applicable statutes and regulations. 

Education administers discretionary grants both through competitions and 

through consideration of unsolicited proposals. In 2003, OII awarded 

267 competitive grants totaling $335 million and 41 grants based on 

unsolicited proposals totaling $64 million. In 2004, the department 

approved 254 competitive grants for $826 million and 24 grants for 

unsolicited proposals totaling $17.5 million. 

Education distributed more than $42 billion in grants in fiscal year 2005, 

but only a small portion—12 percent—was discretionary. The rest of the 

funds were allocated to grantees on the basis of statutory formulas or as a 

result of a congressional earmarks; the department has no discretion over 

who receives grants from those funds. (See fig. 1). 

Background 

Trends in Discretionary 

Grants Awards 

Figure 1: Education Grants—fiscal year 2005 (in billions of dollars) 

.4

Earmarks

4.7

37.4

Dollars in billions

Source: GAO analysis of Education data.

Discretionary grants

Formula grants

Although Education’s grant awards have increased by about a third since 

before the enactment of the No Child Left Behind Act, funding for 

discretionary grants decreased by 19 percent. Most of the increase in grant

Page 5 GAO-06-268 Discretionary Grants
funding is allocated through formula grants, such as Title I—Improving the 

Academic Achievement of the Disadvantaged. Total funding for formula 

grants grew by about 45 percent between 2001 and 2005. 

Competitive Grant-Making 

Process 

In the case of competitions, selection of awardees is governed by policies 

and procedures designed to ensure a fair and objective evaluation of all of 

the applications. Education begins the competition process by publishing 

a notice in the Federal Register. This announcement serves as a notice 

that federal funds are available through a specific program and invites 

interested parties to prepare an application for funding. The notice 

provides information on the estimated number of awards that will be made 

and the estimated size of each award. Importantly, the notice establishes

the rules by which the competition will be conducted; among other things, 

this notice provides information on the eligibility criteria, the issues 

Education expects the applicants to address in their applications, and the 

evaluation criteria for the competition. The notice serves as a blueprint for 

applicants to use in developing a successful application. 

In addition, program officials must develop a plan for how they will 

administer the competition. The competition plan, known as an 

Application Technical Review Plan (ATRP), is a key management control 

that helps promote fairness and transparency in the process. The 

competition plan includes such information as the schedule for the 

competition, the process for identifying and using external peer reviewers, 

the composition of the peer reviewer panels, a description of how the 

applications will be assigned to these panels, the process for resolving 

peer reviewers’ conflicts of interest, and the methodology for selecting 

applications for funding. Any deviation from the original plan for 

reviewing the applications, selecting applicants, and approving the list of

prospective grantees must be justified in writing, which is designed to 

enhance transparency. 

Another key control for ensuring fairness in the award process for grants 

is the peer review process. Peer reviewers are typically external experts 

who bring an independent assessment of the merits of the applications. 

The number of individuals selected to serve as peer reviewers depends on 

the number of applications received for a specific competition. These peer 

reviewers are usually grouped together in panels of three or more 

members to review applications. Each peer reviewer independently reads

and scores a group of applications randomly assigned to the panel, 

generally using a numerical scoring system, against program criteria based

on legislative and regulatory requirements. Program officials prepare a 

Page 6 GAO-06-268 Discretionary Grants
single score for each application—usually by averaging the scores of all 

the peer reviewers on the panel that reviewed the application or, less 

frequently, using a statistical technique to equalize unusual scoring 

variances among reviewers. Program officials then prepare a rank-ordered 

list of applications based on the single scores and use this list to prepare 

their funding recommendations. 

Education’s regulations stipulate that the rank-order list is one of many 

factors the Secretary may use in selecting new grants. The Secretary may 

also use information from the application as well as information 

concerning the applicants’ performance and use of funds under a previous 

award. Ultimately, the peer reviewers’ comments are advisory, and the

Secretary can determine which new grants to fund based on the program 

criteria outlined in the statute and the Federal Register notice. 

In addition to developing the ATRP, Education’s policy requires program 

officials to screen the applicants for eligibility, typically before 

applications are peer reviewed. Before making an award, program officials 

must conduct checks to ensure the applicants’ competence to manage 

federal funds. A budget analysis is also required to be conducted to ensure

that no grant funds are awarded for unallowable purposes. 

Process for Making 

Awards Based on 

Unsolicited Proposals 

Education’s policy is to award the vast majority of discretionary grant 

funds through the competitive process, however it may also fund grants 

based on unsolicited proposals. Although Education can fund unsolicited 

proposals from any program, the primary source for funding such 

proposals is the Fund for the Improvement of Education (FIE). This 

program was created in 1988 as the Secretary’s Fund for Innovation in 

Education.2

 At the time, it provided the Secretary with the authority to 

fund proposals that showed promise of identifying and disseminating 

innovative educational approaches. The program has been reauthorized 

over the years, most recently in 2002 with enactment of the No Child Left 

Behind Act and maintains flexibility by providing the Secretary with the 

authority to fund “meritorious” programs to improve the quality of 

elementary and secondary education at the state and local levels and help 

all children meet challenging state academic content and student 

academic achievement standards. The FIE program is also used to fund 

congressional earmarks for elementary and secondary education activities. 

 2

Pub. L. No. 100-297, § 4601 (Apr. 8, 1988). 

Page 7 GAO-06-268 Discretionary Grants
The statute does not require Education to compare the relative merits of 

all the proposals it receives in any given year; however, it does require that 

the Secretary use a peer review process for reviewing applications. 

Appropriations for the FIE program remained relatively steady until 1998. 

Since 1998 appropriations increased dramatically. (See fig. 2). 

Figure 2: Fund for the Improvement of Education Appropriations, 1989-2005 (in

millions of inflation-adjusted dollars) 

0

50

100

150

200

250

300

350

400

450

199

1999

2000

2001

2002

20032004

2005

8

19

1990

1991

1992

1993

1994

1995

1996

1997

89

In millions of inflation-adjusted dollars

Source: GAO analysis of Education data.

Year

Before funding unsolicited proposals, Education must also make sure that 

the regulatory requirements for funding such proposals are met. Education 

must first determine whether the unsolicited proposal could be funded 

under a competitive grant program; if it could be funded under a 

competition, the Secretary refers the proposal to the appropriate 

competition. If an appropriate competition does not exist, departmental 

regulations require the Secretary to decide if (1) there is a substantial 

likelihood that the application is of exceptional quality and national 

significance, (2) the application satisfies the requirements of all applicable 

statutes and codified regulations that apply to the program, and 

Page 8 GAO-06-268 Discretionary Grants
(3) selection of the project would not have an adverse impact on the funds

available for other awards planned for the program.3

 If these criteria are 

met, Education assembles a panel of experts to evaluate the unsolicited 

proposal based on the selection criteria. If the experts highly rate the 

application and determine that the application is of such exceptional 

quality and national significance that it should be funded as an unsolicited 

application, then the Secretary may fund the application.4

Education made progress since 2003 in improving its policies for awarding 

discretionary grants; however, prior to these improvements we found that 

Education made exceptions to its policies that benefited the grantees in 

question. For the two competitive grants, we found that Education 

officials reduced funding to all of the grantees to accommodate awards to 

lower-rated grantees and did not conduct analyses to assess the impact of

these reductions on the ability of the applicants to achieve the goals of 

their projects. In doing so, Education broke from established practice by

altering its selection methodology after it had developed a list of grantees 

recommended for funding. With regard to the third grant, which was an 

unsolicited proposal, we found that Education made the award with 

approval from only one of three independent reviewers and lacked a 

process for reconciling differences among peer reviewers’ ratings. 

Furthermore, Education awarded four unsolicited grants in 2001 that had

not been recommended for funding by any one of the three reviewers, 

contrary to departmental regulations. 

In order to fund a grant to the Arkansas Department of Education, 

Education officials reduced the prospective grant awards to all other 

competitors in the 2002 Voluntary Public School Choice Program by nearly 

50 percent. Specifically, Education’s program office recommended 

10 grantees for funding, but subsequently expanded this list to 

13 awardees, including 13th-ranked Arkansas. As part of its decision to 

fund 13 grants instead of 10, Education funded each of the top 12 grantees 

at just 53 percent of its request, while it funded Arkansas at 77 percent of

its request. (See fig. 3). 

In 2001 and 2002, 

Education Made 

Exceptions to Its 

Policies in Awarding 

the Three Grants 

Arkansas Department of 

Education 

 3

34 C.F.R. 75.222 (b). 

4

34 C.F.R. 75.222 (e). 

Page 9 GAO-06-268 Discretionary Grants
Figure 3: Voluntary Public School Choice Funding in Fiscal Year 2002 

Dollars in millions

Source: GAO analysis of Education data.

Grantee

0

1

2

3

4

5

6

New Heaven Public

Schools/Conn.

Miami-Dade County

 Public Schools/Fla.

Greenburgh Central

 7 School District/N.Y.

Monadnock Regional

School District/N.H.

School District of

 Hillsborough County/Fla.

Desert Sands Unified

School District/Calif.

Chicago Public

School/Ill.

Rockford Public School

District #205//Ill.

School District #1,

Multnomah County/Oreg.

Florida Department

of Education

Brighter Choice

Chapter Schools/N.Y.

Minnesota Department of

 Children, Families and Learning

Arkansas Department

of Education

Amount requested

Amount awarded

3.6

1.9

4.9

2.6

.4

.7

.8

1.6

5.0

2.6

3.5

1.9

5.0

2.6

4.7

2.5

5.0 5.0

2.7 2.7 2.3

3.0

.8

.4

.7

.4

Note: State of Florida requested $7.35 million but amount of request was capped by Education at 

$5 million. 

In reducing the grant awards to accommodate 13 grants, Education set 

aside its policy to conduct a thorough budget analysis of the programmatic 

impact of the reductions. The program official responsible for the 

competition received assurances from all of the grantees that they could 

still achieve the goals of their proposals with decreased funds, and 

according to this official, all of the grantees submitted revised budgets 

reflecting reduced award amounts. However, this official told us that 

Education did not analyze the revised budgets, and we found no evidence 

from our file review that a budget analysis was conducted to determine if 

there would be a programmatic impact resulting from the reductions. 

Additionally, neither the assurances nor the rescoped proposals, which 

given the magnitude of the reductions could be substantially different 

from original proposals, were vetted by any external reviewers. For 

example, Arkansas scaled back its proposal by eliminating foreign 

language instruction and summer school programs. 

In addition, we found that Education broke from established practice and 

altered its selection methodology outlined in the competition plan. The 

department’s original list of 13 grantees would have required cutting the

requests of the applicants other than Arkansas across-the-board by 

Page 10 GAO-06-268 Discretionary Grants
51 percent in order to fund each applicant. Arkansas received a reduction 

of only 23 percent. The department altered its selection methodology, 

which resulted in one grant request for $3.6 million being replaced by one 

for $749,000. Using the new methodology, funding reductions for each of 

the 12 grantees went from 51 percent to 47 percent. Officials told us it was 

not normal procedure to make changes to the selection methodology so 

close to the time of the award decision. 

We found that the process used by senior departmental officials in making 

an award to America’s Charter School Finance Corporation under the 

Credit Enhancement for Charter School Facilities program set aside 

departmental policy and varied from standard departmental practice. 

Specifically, after receiving a list of four grantees recommended for 

funding, the deputy secretary asked his staff—a senior political 

appointee—to re-review the fifth and sixth ranked competitors, as ranked 

by expert reviewers. Based on this re-review, the order of the fifth and 

sixth ranked grantees was reversed, according to the department official 

conducting this review, because “the application from America’s Charter 

was stronger and had been evaluated too harshly by its peer review panel.” 

Program officials said that they had never before experienced a case

whereby a senior political appointee selectively re-reviewed and rescored 

particular applicants after the peer review process had been completed. 

Furthermore, the appointee recommended that “this excellent, ambitious 

application be awarded the fifth of five allowable grants,” expanding the

initial list recommended by the program staff. To fund five grantees, 

program officials reduced the awards to each of the grantees by anywhere

from 16 to 40 percent. We found no evidence that a budget analysis was 

conducted, as required by policy, to determine whether the reductions 

impeded the grantee’s ability to perform the proposed activities and 

achieve the intended outcomes on which the reviewers based their scores. 

In the case of the grant to NCTQ in 2001, Education awarded $5 million to

the council, despite the fact that its proposal was not recommended for 

funding by two of three reviewers. The council’s award was based on an 

unsolicited proposal to create a new national accreditation program for 

teachers—the American Board for Certification of Teacher Excellence 

America’s Charter School 

Finance Corporation 

National Council on 

Teacher Quality 

Page 11 GAO-06-268 Discretionary Grants
(ABCTE).

5

 We also found that in 2001 Education funded eight other 

unsolicited proposals that had been rejected by at least two of three 

reviewers. Four of these eight were funded despite not being 

recommended by any of the three reviewers, which was contrary to 

departmental regulations. 

In 2003, Education strengthened some of its policies governing the 

competitive grant process and in both 2003 and 2004 generally adhered to

its key policies, although certain procedures were not always carried out 

or documented. In our review of all 25 competitions we did not find 

evidence that Education made funding reductions without conducting 

budget analyses of the potential impact on the proposals or rescored 

applications after they had been assessed by expert reviewers. Nor did we 

encounter any changes to the competition plans for 2003 and 2004 after 

peer reviewers had assessed the applications. However, we did find found

that many of the original competition plans we examined had not been 

finalized—that is to say, formally approved. For this reason, we cannot be

certain that all competitions had proceeded without alteration to the 

plans. In addition, we found many of the grant files lacked documentation

documented evidence that Education had conducted three standard 

procedures for screening potential grantees: (1) a review of the applicant’s

compliance with audit requirements; (2) a review of the applicant’s 

eligibility for the program; and (3) a review of requested costs and 

expenses to determine whether they were allowable. 

In 2003, Education added certain controls over the competitive grants 

process aimed at increasing its fairness and transparency. Among these is 

an explicit requirement to document any changes to a competition plan, 

which would include changes to how competitors are scored or how peer 

reviewers are selected. The new guidance provides that if there is a need 

to deviate from a plan during a competition, it should be formally amended 

and a written justification should be approved by a senior departmental 

official and included in the official file for the competition. Also, the 

department clarified the conditions under which it may reduce funding 

In 2003 and 2004, 

Education 

Strengthened Its 

Policies for 

Competitive Grants 

and Generally 

Adhered to Them 

Education in 2003 

Introduced New Controls 

to the Competitive Grant 

Process 

 5

In 2003 NCTQ submitted another unsolicited proposal for $35 million to cover 5 years. In

2003, all three peer reviewers rated NCTQ’s proposal highly and it was funded. Officials 

told us that Education has funded ABCTE directly since 2004, after NCTQ transferred the

grant. Although the Congress sharply cut the funding for discretionary grants from the FIE 

program in 2005, this grant is now funded through the Advanced Credentialing Program. 

Page 12 GAO-06-268 Discretionary Grants
from what was applied for. In addition, the department added several 

checks for program staff to consider before making awards as part of their 

responsibility for determining that potential awardees are competent to 

manage federal funds. One of these checks requires that program staff 

submit for screening a list of the likely awardees to determine whether any 

have a grant history and met auditing requirements.6

 If the audit record 

reveals any problem, program staff are required to withhold or delay an 

award until such problems are resolved.7

 Table 1 compares certain 

requirements from Education’s 1997 guidance with 2003 guidance. 

Table 1: Comparison of Policy Guidance for 1997 and 2003 for Select Requirements 

1997 Policy guidance 2003 Policy guidance 

Approval of competition plan The plan is subject to review and approval of 

the senior officer or his/her designee. 

The plan must be approved by the principal 

officer or his/her designee. 

Changes to competition plan Not addressed. If there is a need to deviate from the plan 

during a competition, the plan should be 

amended, and a written justification of why 

the plan was amended must be approved

by the Principal Officer or his/her designee 

and included in the competition file. 

Reductions from requested amounts Program offices must assure that any 

reductions from requested amounts do not 

impede the grantee’s ability to perform 

proposed activities and achieve intended 

outcomes on which the reviewers based their

recommendation for making an award. 

Program staff must ensure that any 

recommended changes to the project 

activities or requested amounts do not 

impede the applicant’s ability to perform the 

proposed activities and achieve the 

intended outcomes. In limited 

circumstances, the department may fund 

projects for less than their requested 

amounts as long as it does not result in a 

change to the scope or objectives of the 

funded application. 

Pre-award check of grantee’s audit 

history 

Not addressed. In reviewing applications, program staff 

should consider whether the applicant has 

submitted federally-required audits, and, if 

applicable, adhered to corrective actions 

required in those audits. 

Source: GAO analysis of Education’s A Basic Guide to the Discretionary Grants Process (1997) and Handbook for the Discretionary 

Grant Process (2003).

 6

OMB Circular A-133, which implements the Single Audit Act, as amended, requires 

nonfederal entities that expend $500,000 or more in federal funds to have a single or

program-specific audit conducted for that year. 

7

Another option available to program managers is to designate the candidate as high risk 

and make the award. 

Page 13 GAO-06-268 Discretionary Grants
In our review of all 25 competitions run by OII in 2003 and 2004, we found 

that Education generally adhered to its policies for ensuring fairness in the 

competitive process, and we found no evidence that Education made 

funding reductions without conducting budgetary analysis of the potential 

impact on the proposals. Nor did we find any instances in which 

Education officials re-reviewed peer reviewers’ initial assessments. In 

addition, we found that grants were generally awarded to the highestscoring eligible applicants, as policy requires, and that exceptions to the 

rank order were appropriately documented and justified, as policy 

requires. For example, we found several instances where applicants were 

dropped from the slate because they were ineligible for the program.8

In 2003 and 2004 we found no evidence that competition plans—the 

procedural and scoring blueprint for each grant competition and a key 

management control—were changed after the expert reviews were 

completed. However, only 5 of the 14 plans covering the 25 competitions 

had been finalized as required. Specifically, the plans did not contain 

documentation of approval by a principal officer, nor did the plans show 

whether they had been amended. Without such documentation, we could 

not determine whether changes had, in fact, been made to the plans that 

would have required justification and approval under Education’s 2003 

guidance. Officials acknowledged that competition plans should be signed 

and dated when they are developed, but officials said they at times 

overlooked this step. Additionally, they said that any amendments to the 

plans were rare and usually not substantive in nature. 

Further, our review of the 2003 and 2004 grants showed that the files 

frequently lacked documentation that Education had conducted three 

management controls that are designed to ensure that applicants are 

qualified to receive federal funds. Specifically, many of the files did not 

contain evidence that Education determined whether the applicant had

any past audit findings, met the eligibility requirements for the program, or 

requested any unallowable expenses. We estimate that in 98 percent of the 

files, there was no evidence that program officers checked a grantee’s 

audit history—a key check on an applicant’s ability to manage federal 

grant funds. The guidance requires program staff to submit lists of 

In 2003 and 2004, 

Education Generally 

Adhered to Its Policies for 

Competitive Grants 

Formal Plans That Govern 

Grant Competitions 

Frequently Were Not 

Finalized As Required 

Screenings for Grantee 

Competence, Eligibility,

and Allowable Expenses 

Were Not Always 

Performed or Documented 

by Education Officials 

 8

Officials said this occurred when Education received many more applications than

anticipated and found it necessary to rank applications before they are screened for 

eligibility. Subsequent screening resulted in removal from the funding slate.

Page 14 GAO-06-268 Discretionary Grants
potential applicants to the audit administrator to determine whether 

applicants submitted federally required audits and, if applicable, adhered 

to corrective actions required in the audits. The director of the audit 

division informed us, however, that this check was not universally 

implemented due to resource constraints. As a result, there is no preaward assessment of an applicant’s prior performance under any previous

federal grant, or that an applicant with audit findings resolved any 

deficiencies before a new grant was awarded. 

Further, we estimate that 45 percent of the grant files did not contain 

documentation that Education, prior to award, screened the applicants for 

eligibility, and 68 percent of the grant files did not contain documentation 

of a thorough analysis of the applicant’s requested budget to determine 

whether all costs were allowable. Program officials assured us that they 

perform both of these checks and acknowledged that documentation of 

the checks should be in the file. 

While Education has taken steps to centralize and improve its process for 

reviewing unsolicited proposals, it based its screening decisions on 

proposals that varied greatly and frequently provided extensive technical 

assistance. Prior to a departmental reorganization, Education officials told

us there was no established process for considering unsolicited 

applications; instead, various offices within Education ushered select 

applications through a peer review process, and the Secretary decided

among those which to fund. In December 2002, the Secretary notified the 

various offices within the department to send any unsolicited proposals 

relating to elementary and secondary education initiatives to OII for 

review. 

Education Selected 

Unsolicited Proposals 

That Varied Greatly in 

Content and Provided 

Extensive Technical 

Assistance 

In 2003, OII developed a process for reviewing unsolicited proposals to 

determine which would be asked to submit an application for peer review. 

To select among the proposals received, senior OII officials told us they 

chose those proposals that aligned with the Secretary’s priorities. At the 

beginning of the year, these officials said they met with the Secretary to 

discuss his priorities and then, over the course of the year, selected some 

that matched the Secretary’s priorities to submit full applications. In 2004,

Education’s IG reviewed OII’s process to ensure that it complied with 

departmental regulations and policy and found that it failed to document 

Page 15 GAO-06-268 Discretionary Grants
compliance with a number of regulatory requirements.9

 Specifically, the IG

reported that Education was not documenting whether unsolicited 

proposals that had been selected for peer review had been screened to

ensure, among other things, that there was a substantial likelihood that the 

application was of exceptional quality and national significance, as 

required by regulations. In response to the IG’s findings, OII began to

document the required screenings by including a memo in the grant file for 

each proposal that it planned to forward to peer review certifying, among 

other things, that there was a substantial likelihood that peer reviewers 

would deem the proposal to be of exceptional quality and national 

significance.

While Education developed a standard process for reviewing unsolicited 

proposals, these proposals varied greatly in content and detail. OII officials 

said that the proposals could range from multipage documents from 

experienced grantees to less formal proposals—sometimes one-page 

letters or e-mails—from novice grantees. OII does not require that 

proposals be in a standard format before it selects which ones to forward

to peer reviewers. OII officials told us it was often difficult to discern from 

the submitted material which proposals would ultimately gain the support 

of the peer reviewers. Nonetheless, OII made its determinations that 

proposals were likely to meet regulatory requirements of national 

significance and exceptional quality on the basis of these varying 

proposals. OII officials said that because the regulatory criteria defining 

significance and quality are broad10 many of the proposals submitted 

during the year met the criteria. 

OII officials said that they were concerned that if they had to promulgate 

rules governing the format or topics for unsolicited proposals, they might 

be overwhelmed with applicants. However, another office within 

Education—the Institute of Education Sciences (IES)—invites unsolicited 

research proposals and requires a standard submission. IES’ invitation 

provides guidance on standardized presentation formats—proposals are 

 9

Office of the Inspector General, U. S. Department of Education, Improvements to 

Department Policy on Unsolicited Applications, ED-OIG/L03-E0026 (Washington, D.C.: 

Mar. 8, 2005). 

1034 C.F.R. 75.210. 

Page 16 GAO-06-268 Discretionary Grants
limited to six pages—and imposes deadlines on submitting the proposals 

to IES.11

We also found that OII provided extensive technical assistance to some 

applicants. Our file review of unsolicited proposals showed that in many 

cases OII staff were in regular communication with the applicants, 

provided them with suggestions for how to organize and structure the 

narrative portion of their applications, assisted them in preparing 

proposed budgets, and commented on drafts of their applications. 

In 2003, despite Education’s screening and technical assistance efforts, 

peer reviewers gave low scores to 14 of 42 applicants, and Education 

funded 13 of these low-scoring proposals.12 (See appendix II for a list of 

grants awarded in 2003 based on unsolicited proposals). In its 2004 study,

the IG found that OII failed to comply with regulations that make funding 

for unsolicited proposals contingent on recommendations from peer 

reviewers. In response to the IG’s findings and to comply with the 

regulation, OII began, in 2004, to ask the peer reviewers to provide 

recommendations for or against funding, rather than just having them 

provide a numerical score for each proposal. 

However, in 2004, if peer review failed to recommend approving a 

proposal that OII had selected, OII provided the applicants with the 

reviewers’ comments and asked them to rewrite their proposals. In 2004,

10 of the 27 applicants failed to garner the reviewers’ support. Of those 

10 grantees, 2 declined to resubmit their applications—citing time 

constraints—and were not approved. The remaining eight applicants 

revised their proposals and were subsequently recommended for approval 

by peer reviewers after the revisions were submitted. All eight were 

approved and funded. (See app. III for a list of grants awarded in 2004 

based on unsolicited proposals). 

 11In 2004, IES received 171 proposals; they were screened by IES staff to ensure that the

research would likely make a contribution to IES’ overall research agenda—a selection 

criteria that is nearly as broad as FIE’s requirement that the proposal should be nationally 

significant and of exceptional quality. Based on that screening process, IES asked eight

prospective applicants to submit a full application and, like any unsolicited proposals that

received funding from Education, IES submitted those applications to peer reviewers for 

their recommendations. Peer reviewers do not score the applications but provide written 

narrative comments. IES bases its decisions to award grants on these comments. In 2005, 

IES funded four of the eight proposals.

12We defined low scores as any score of 70, out of 100, or below. 

Page 17 GAO-06-268 Discretionary Grants
Conclusions The Department of Education has the responsibility to ensure that when it 

makes discretionary grant awards it follows a transparent and fair process 

that results in awards to deserving eligible applicants. In the case of 

unsolicited applications, OII’s process is designed to meet statutory and 

regulatory requirements. However, Education based its decisions about 

the likely national significance and quality of proposals on information 

that varied greatly in detail and, as a result, sent applications forward for 

peer review that sometimes required extensive revisions. Without 

requiring a more uniform format for unsolicited proposals, OII may not 

have adequate information on which to base its screening decisions. 

Regarding its competitive awards process, the department has put in place 

management controls that, if followed, provide a reasonable assurance 

that awards are made appropriately. These controls protect the integrity

and transparency of the departmental grant award process by requiring, 

among other things, that competition plans are finalized prior to the 

competition, that any changes to such plans are documented and 

approved, that grantees are screened for competency and eligibility, and 

that departmental officials determine that proposed activities are 

allowable under the law. When the department does not consistently 

follow these procedures, as we found to be the case, the integrity of its 

competitive grant award process may be undermined. Furthermore, in the 

absence of such diligence, actions taken that benefit specific grantees, 

such as those we found in 2001 and 2002, could happen again.

We are making four recommendations to the Secretary of Education to 

address certain shortcomings in the department’s grant-making policies 

through a variety of executive actions designed to promote fairness, 

enhance transparency, and provide greater access to funding 

opportunities. Specifically, to improve the process for selecting and 

awarding grants based on unsolicited proposals, we are recommending 

that the Secretary 

Recommendations for 

Executive Action 

• develop a more systematic format to select unsolicited proposals for 

further consideration by peer reviewers. 

In addition, to ensure fairness and improve transparency in the 

competitive grants process, we recommend that the Secretary take the 

following steps: 

• Ensure that all competition plans are finalized before competitions 

begin and if a plan needs to be amended during a competition, the 

Page 18 GAO-06-268 Discretionary Grants
Secretary should provide assurances that any such amendment is 

justified in writing and has been approved by a senior department 

official. 

• Implement departmental policy to screen all applicants for compliance 

with audit requirements before the award, and ensure that outstanding 

audit issues—if there are any—are addressed before making an award. 

• Take appropriate steps to ensure that program officers better 

document required checks such as budget analyses and eligibility 

screening. 

Education provided us with comments on a draft of this report; these 

comments appear in appendix III. Education also provided technical 

comments that we incorporated as appropriate. Education agreed with 

3 of our recommendations for improving the transparency of its 

competitive review process and said it has already taken steps to improve 

its guidance and training. Specifically, it agreed to (1) finalize competition 

plans before the competitions begin and obtain approvals from senior 

department officials for any amendments to the plans, (2) ensure that 

program officers better document their analyses of applicants’ budgets 

and eligibility, and (3) implement departmental policy to screen all 

applicants for compliance with audit requirements before awarding any

new grants. 

Agency Comments 

Education disagreed with our recommendation that it develop a more 

systematic approach—modeled after the approach used by IES—to select 

unsolicited proposals for further consideration by peer reviewers. 

Education said implementation of our recommendation would not help it

to select high-quality applications because of the broad nature of the FIE

program. We disagree and think that collecting some systematic 

information would enhance Education’s ability to more effectively screen 

the quality of its applicants and enhance the transparency and consistency 

of this process. As we reported, Education officials acknowledge that, due 

to the nature of the proposals, it is often difficult to make quality screening 

decisions. We acknowledge that FIE awards and IES’ research grants are 

fundamentally different, but we point out that the FIE program does not 

necessarily need to collect information that is as detailed or that would 

place unnecessary burdens on organizations seeking FIE funds. To make it 

clear that Education should focus on developing a systematic approach to 

selecting unsolicited proposals rather than duplicating the approach used

by IES, we have modified our recommendation and removed reference to 

IES. 

Page 19 GAO-06-268 Discretionary Grants
As agreed with your staff, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days after its 

issue date. At that time, we will send copies of this report to the Secretary 

of Education, Education’s OII, relevant congressional committees, and 

other interested parties. We will also make copies available to others upon 

request. In addition, the report will be made available at no charge on 

GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions regarding this report, please 

contact me at (202) 512-7215. Contact points for our Offices of 

Congressional Relations and Public Affairs are listed on the last page of

this report. Key contributors are listed in appendix IV. 

Sincerely yours, 

Marnie S. Shaul, 

Director, Education, Workforce, and

 Income Security Issues 

Page 20 GAO-06-268 Discretionary Grants
Appendix I: Scope and Methodology 

Page 21 GAO-06-268

Appendix I: Scope and Methodology 

This appendix discusses in detail our scope and methodology for 

(1) reviewing Education’s grant award decisions for the 2001 and 2002 

grants in question to determine whether the department had followed its 

policies in place at the time, (2) assessing the department’s policies and 

procedures in place in 2003 and 2004 for the competitive awards process 

and determining whether Education followed them in making such awards 

in those years, and (3) assessing Education’s process for reviewing 

unsolicited proposals in 2003 and 2004. 

To review Education’s grant award decisions for the 2001 and 2002 grants,

we limited our in-depth inquiry to the three grants in question. These 

grants were awarded before Education reorganized in 2003. In 2003, 

Education created OII and consolidated a number of grant programs with 

it. The grants in question were funded from programs that are now housed 

in OII. In addition, in 2003 Education published revised agency guidance

on awarding. This guidance governs the policies and procedures program 

staff must follow in holding grant competitions and in awarding grants. 

Consequently, we chose 2003 and 2004 as the time period for our 

systematic review of both competitive grants and grants based on 

unsolicited proposals. 

Scope 

We used the department’s GAPS to identify all grants awarded in 2003 and

2004. We assessed the reliability of the data in GAPS and found it to be 

reliable for our purposes. We reviewed the competition files from all 

25 discretionary grant competitions held in 2003 and 2004. During this 

2-year period, a total of 521 grants were awarded. Ten of these grants were 

for $15 million or more; we selected all of these grants for review. Of the 

remaining 511 competitive grants awarded for amounts under $15 million, 

we selected a random sample of 81 additional grants to review. The 

sample size was calculated to achieve a precision of plus or minus 

10 percent for an attribute estimate with an expected proportion of 

50 percent and a 95 percent confidence level. With this probability sample, 

each grant in the population had a known nonzero probability of being 

selected. Each sample grant was subsequently weighted in the analysis to 

account statistically for all the members of the population, including those 

that were not selected. All percentage estimates from this sample have 

margins of error of plus or minus 10 percent or less. 

In addition to 91 competitive awards, we examined all 65 grants based on 

unsolicited proposals made by OII during 2003 and 2004. In 2003, 

$64 million was awarded to 41 unsolicited grantees; in 2004,

$17.5 million was awarded to 24 unsolicited grantees. 

Discretionary Grants
Appendix I: Scope and Methodology 

The grantees we examined were collectively awarded $507 million, or 

41 percent of the $1.24 billion total competitive and unsolicited grant 

funds awarded in 2003 and 2004 by OII. 

To review the 2001 and 2002 grants in question to determine whether the 

department had followed its policies, we reviewed departmental grantmaking guidance in place at the time these grants were awarded and the 

official grant files for each of these grants. For the two competitive grants, 

we also examined the corresponding files for the competitions that 

contain information on all of the applicants’ proposals, the competition 

plans, and external reviewers’ rankings and comments. In addition, for the 

competitions, we interviewed relevant managers and program officers 

responsible for monitoring the grants, program attorneys, and ethics 

officials. For the unsolicited grant, we reviewed the official grant file, 

including the peer review comments. For comparison, we also reviewed 

the expert reviewers’ rankings and comments for all other unsolicited 

awards made in 2001. Further, we interviewed program officials 

responsible for monitoring the grant.

Methodology 

To assess the department’s policies and procedures in place in 2003 and 

2004 for the competitive awards process and determine whether 

Education followed them in making such awards in those years, we 

examined departmental guidance issued in March 2003 that governed the

grants awarded in those years as well as applicable statutes authorizing 

competitions and regulations. Also, we reviewed competition files and 

individual grant files for grants awarded during this 2-year period. In 

reviewing the competition files, we recorded information in the Federal 

Register notice inviting applications, the competition plan, the funding 

memo and slate from the Deputy Under Secretary to the Executive 

Secretary and information on the funded grantees from the GAPS. We 

used a structured instrument to collect information about each grant. In 

reviewing each individual grant file, we recorded information on the 

(1) grantee’s funding levels, years in the program, and contact information; 

(2) application processing by Education, including funding checklists, 

application log screening forms, and budget analysis; (3) peer reviewers’ 

comments and rankings; and (4) single audit database reports. We also 

interviewed key program officials from three of OII’s six program offices 

to ascertain their familiarity with departmental guidance and to help us 

better understand how they implemented the department’s guidance. 

Similarly, to assess Education’s process for reviewing unsolicited 

proposals in 2003 and 2004, we reviewed departmental guidance and all 

Page 22 GAO-06-268 Discretionary Grants
Appendix I: Scope and Methodology 

65 files for unsolicited grants awarded by OII in 2003 and 2004. We 

collected information from this review on the processes used by the 

department to assess each successful application for its quality and its 

national significance, the level of technical assistance provided to each 

successful application, the peer reviewers’ comments on each application, 

and any additional post-review support provided to the awardees. Again, 

we used a structured instrument to collect information about each grant.

In addition, we interviewed officials responsible for administering grants

based on unsolicited proposals. 

We conducted our work between May 2005 and February 2006 in 

accordance with generally accepted government auditing standards. 

Page 23 GAO-06-268 Discretionary Grants
Appendix II: Grants Awarded Based on 

Unsolicited Proposals (2003-2004) 

Table 2: Grants Awarded in 2003 Based on Unsolicited Proposals (cumulative obligations as of November 30, 2005) 

Category of grant Grants awarded Grant amount

Charter Schools American Academy of Liberal Education $900,000

Arizona State University 3,179,416

Education Commission of the States 500,400 

National Association of Charter School 

Authorizers 1,513,500 

National Association of State Directors of 

Special Education 1,620,435 

New Schools Venture Fund 5,997,900 

New Visions Charter School 950,453 

Supplemental Education 

Services (SES)—Faith Based 

Organizations 

Catholic Social Services of the Archdiocese 

of Philadelphia

82,560 

Communities in Schools, New York, Inc. 80,000 

Holy Redeemer Instructional Church of God 

in Christ 75,000 

New Community Corporation 80,000 

Public/Private Ventures 80,000 

St. Stephen’s Church of God in Christ 80,000 

Supplemental Education 

Services 

American Institutes for Research 

1,000,080 

Parental Options Flagstaff Unified School District 500,000 

Great Schools.net, Inc. 500,000 

Public Information Campaign Black Alliance for Educational Options 500,000 

University of Minnesota/National Governors 

Association 607,147 

Greater Educational Opportunities 

Foundation 370,000 

Hispanic Council for Reform and Educational

Options 499,907 

Science/Math American Society of Mechanical Engineers 123,783 

Cisco Learning Institute 399,619 

Direction Services, Inc. 200,000 

National Academy of Engineering $184,499 

Appendix II: Grants Awarded Based on 

Unsolicited Proposals (2003-2004) 

Page 24 GAO-06-268 Discretionary Grants
Appendix II: Grants Awarded Based on 

Unsolicited Proposals (2003-2004) 

Category of grant Grants awarded Grant amount

Teacher Quality Initiatives Apple Tree Institute for Education Innovation $500,000 

Jackson State University $2,250,000

Milken Family Foundation $1,800,000

National Center for Education Information 

(NCEI) $2,250,000 

National Council for Accreditation of Teacher 

Education $4,496,423 

NCTQ/ABCTE $17,902,700

Oquirrh Institute/NCTQ $677,318

Teach For America (2 grants) $4,000,000 

The New Teacher Project $2,500,000 

Other Keep America Beautiful Environmental education $150,000

Charter School of the Chicago Children’s 

Choir 

Arts in education 

$750,000 

Los Angeles Operation HOPE, Inc Financial literacy $250,000 

National Association of State Boards of 

Education 

Rural education 

$268,480 

Best Friends Foundation, Inc Mentoring $1,121,043

Association of Educational Service Agencies School improvement $400,300 

The Broad Foundation Data services $4,700,000 

Total obligations $64,040,963

Source: GAO analysis of U.S. Department of Education data. 

Page 25 GAO-06-268 Discretionary Grants
Appendix II: Grants Awarded Based on 

Unsolicited Proposals (2003-2004) 

Table 3: Grants Awarded in 2004 Based on Unsolicited Proposals (cumulative obligations as of November 30, 2005) 

Category of grant Grants awarded Grant amount

Charter Schools Colorado Children’s Campaign $101,310 

Public Information Campaigns—

Supplemental Education Services 

for Faith Based Organizations

Abyssinian Development Corporation 

400,000 

Public/Private Ventures 1,604,831 

Public Information Campaigns—

Parental Options 

Black Alliance for Educational Options 

400,000 

Cuban American National Council 631,775

Greater Educational Opportunities 

Foundation 375,000 

Hispanic Council for Reform and Educational

Opportunities 400,000 

National Urban League 250,000

National Council of Negro Women, Inc. 264,234 

Public Information Campaigns—

Charter Schools 

Corporation for Educational Radio and 

Television (CERT) 20,000 

Science/Math Accountability Works, Inc./Education Leaders 

Council 492,924 

National Alliance of State Science and 

Mathematics Coalitions 175,000 

Research for Better Schools, Inc. 99,793 

Tech Corps 241,510

Teacher Quality Initiatives California State University 522,928

Teach For America 2,000,000 

University of Dayton School of Education 100,000 

Public School Choice Center for Education Innovation—Public 

Education Association 1,214,462 

Other National Football Foundation and College 

Hall of Fame, Inc 

Mentoring 

1,498,848

Alpha Kappa Alpha Sorority, Inc. Reading 1,000,000 

First & Goal, Inc. Mentoring 75,000

Reach Out and Read Inc Reading 3,976,400

Association of Educational Service Agencies Rural education 1,480,903 

Youth E-Vote, Inc Voter education 175,000

Total obligations $17,499,918

Source: GAO analysis of U.S. Department of Education data. 

Page 26 GAO-06-268 Discretionary Grants
Appendix III: Comments from the Department Appendix III: Comments from the of Education 

Department of Education 

Page 27 GAO-06-268 Discretionary Grants
Appendix III: Comments from the Department 

of Education 

Page 28 GAO-06-268 Discretionary Grants
Appendix III: Comments from the Department 

of Education 

Page 29 GAO-06-268 Discretionary Grants
Appendix IV: 

A

GAO Contacts and Staff 

cknowledgments 

Page 30 GAO-06-268

Appendix IV: GAO Contacts and Staff 

Acknowledgments 

GAO Contacts Marnie S. Shaul, (202) 512-2732, shaulm@gao.gov

Bryon Gordon, Assistant Director, and Bill Keller, Analyst-in-Charge, 

managed this assignment and made significant contributions to all aspects 

of this report. Ellen Soltow also made significant contributions, and 

Jim Ashley, Joel Grossman, and Jerry Sandau aided in this assignment. In 

addition, Richard Burkard and Jim Rebbe assisted in the legal analysis, 

and Sue Bernstein assisted in the message and report development. 

Acknowledgments 

Discretionary Grants
Related GAO Products 

Page 31 GAO-06-268

Related GAO Products 

Education U.S. Department of Education’s Use of Fiscal Year Appropriations to 

Award Multiple Year Grants. B-289801. Washington, D.C.: 

December 30, 2002. 

Financial Management: Review of Education’s Grantback Account. 

GAO/AIMD-00-228. Washington, D.C.: August 8, 2000. 

Education Discretionary Grants: Awards Process Could Benefit From

Additional Improvements. GAO/HEHS-00-55. Washington, D.C.: March 30, 

2000. 

Department of Education Grant Award. GAO/HRD-93-8R. Washington, 

D.C.: December 9, 1992. 

Grants Management: Additional Actions Needed to Streamline and 

Simplify Processes. GAO-05-335. Washington, D.C.: April 18, 2005. 

Grants Management: EPA Needs to Strengthen Efforts to Provide the 

Public with Complete and Accurate Information on Grant 

Opportunities. GAO-05-149R. Washington, D.C.: February 3, 2005. 

Federal Assistance: Grant System Continues to Be Highly Fragmented. 

GAO-03-718T. Washington, D.C.: April 29, 2003. 

Welfare Reform: Competitive Grant Selection Requirement for DOT’s Job 

Access Program Was Not Followed. GAO-02-213. Washington, D.C.: 

December 7, 2001. 

Grant Financial System Requirements: Checklist for Reviewing Systems 

Under the Federal Financial Management Improvement Act. 

GAO-01-911G. Washington, D.C.: September 3, 2001. 

Grant Financial System Requirements. GAO/JFMIP-SR-00-3. Washington, 

D.C.: June 1, 2000. 

Discretionary Grants

Grants Management 

(130462) 
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