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The Washington Examiner Reports on Violations of the federal False Claims Act by Fairfax County Schools

The Washington Examiner Reports on Violations of the federal False Claims Act by Fairfax County Schools

An interesting article this week in Washington Examiner demonstrates that false claims act violations do in fact come from sources other than the private sector.  Lisa Gartner, who covers education matters for the Examiner, did a top-notch job.

In a nutshell, Fairfax County Schools made false claims to the U.S. Department of Education in connection with a grant to help under-privileged students prepare for college.

The grant application was originally filed in 2000 and Fairfax County was paid a total of $2.7 million over five years.  The money was supposed to be used to fund the “Gear Up” college readiness program at Glasgow Middle School. 

This was a textbook-style false claims act violation (no pun intended).  As with most federal grants, this one came with some conditions; namely Fairfax County was required to certify, on the grant application, that the schools system had been able to raise an amount equal to or greater than the amount of the federal grant in order to qualify.

As with most violators of the federal False Claims Act, this case involved multiple violations in a number of different ways.  Funny how that works… 

First, the responsible FCPS employee apparently felt like the matching funds requirement was an unimportant detail, and so he or she falsely certified that $2.9 million in private funds had been raised.  The same employee also falsified signatures to make the $2.9 million magically appear.

Then, although the money was supposed to be used at Glasgow Middle School (this determination was made based on the percentage of GMS students receiving free lunches) some of the money may have gone to J.E.B. Stuart High School in Falls Church.

To the credit of Fairfax County Public Schools (which consistently rank among the top school systems nationwide both in terms of administration and the results obtained) the violation was self-disclosed in 2004 after it was discovered.  That is a rare step indeed, and one which FCPS deserves much credit for taking.  As further evidence that the school system wanted to make good for the wrongdoing, it immediately suspended the use of $1.6 million of the money and began discussing settlement with the U.S. DOE and DOJ.

I think these two steps were rewarded by DOJ and DOE because FCPS didn’t pay for the violation in multiples of the $2.7 million.  As readers of this blog know, the federal False Claims Act makes treble damages and civil penalties mandatory, and the men and women of the United States Department of Justice are not in the habit of going light on violators.

In fact in this case the DoJ initially wanted a multimillion-dollar fine and other penalties under the federal False Claims Act.  Ultimately the federal government elected to settle for a little over $1 million after almost nine years of discussions.

I am certain that the self-disclosure figured prominently in the decision to settle for $1 million, instead of the full amount of the grant (i.e., $2.7 million) times a multiple.  The simple fact is that self-disclosures are so very rare and take such a high level of organizational integrity that they should be rewarded every time the government gets a chance….and again, the government does not get the chance very often.

I also hope that this fine article will make yet another dent in the editorial opinions at the Washington Examiner which are more or less without exception anti-False Claims Act.  I have addressed this before and I hope that policy will change….