Schools are owed $23,000 by Alabama firm

Several other school systems are owed even more, according to press reports. Reports in the Citrus County (Fla.) Chronicle state that the Citrus County School District is owed $263,000 by eRate.

A federal program offers school systems reimbursement of some of their telecommunications bills through the "E-Rate" program. But the grant application is complex and any mistakes can result in delay or denial, according to Joan Gray, who is technology coordinator for the Bedford County school system. The county once had a grant application turned down because one date on the application form was incorrect; that application is still in an appeals process.

So, school systems like Bedford County hired a consultant to work with them on the E-Rate grant application process.

Bedford County had hired eRate Consulting Services, based in Montgomery, Ala., to manage its eRate grant application.

"We've never had any problems with them before," said Gray. Every six months, telecom providers AT&T and Verizon Wireless would make eRate grant payments to the county, passing them along through eRate.

Bedford County was due approximately $23,000 from AT&T for the last six months of 2007, which were the first six months of the county's fiscal year.

It now appears that eRate Consulting Services deposited a $23,000 grant check from AT&T and has not yet passed along the funds to Bedford County. Gray said the grant check was made out by AT&T to Bedford County Schools in care of an eRate employee.

Gray said the school system did not authorize the check to be made out in this fashion.

"The company just has no comment," said someone at eRate Consulting Services' telephone number who identified himself at John Slaughter.

The money has still not been paid despite several rounds of requests by Gray and promises by eRate, according to Gray. Gray said the county has cancelled its relationship with eRate and is still investigating its options in pursuing the $23,000. It has also reported the matter to the schools and libraries division of the Universal Service Administrative Company, which manages the federal program.

At first, it was thought that the county might be able to pursue action against the bank which cashed the check, but then Gray discovered that it was made out with the "in care of" payee, so the bank apparently acted properly in cashing it. That brings the matter back to why and how the check came to be made out in this fashion in the first place.

"I think we'll eventually get the money," said Gray. "I just don't know from whom."

According to the Citrus County Chronicle, school officials there are scheduled to meet with eRate Consulting next month to consider a proposed repayment plan, but may decide to pursue legal action instead.