San Diego Unified must pay $300,000 under a settlement with the federal government over how the school district used more than $1.7 million in National Science Foundation funding. Board minutes identify the disputed funds as the Urban Systemic Initiatives grant, which is aimed at improving math and science achievement in urban school districts.

The federal government claimed that the school district improperly charged more than $1.7 million, failing to document its costs, charging for “unallowable costs” and miscalculated and overcharged the government for the award, violating the False Claims Act. San Diego Unified denied any wrongdoing. Settlement documents do not detail how, specifically, the money was alleged to be improperly spent.

Under the settlement, San Diego Unified must change its operations to ensure that the National Science Foundation is not overcharged. It must implement written policies that outline how San Diego Unified will comply with rules about the federal grant. And it must audit the National Science Foundation funding annually, report any problems identified in the audits to NSF and act to solve them.

If San Diego Unified fails to correct any problems identified in those audits, the National Science Foundation can ultimately terminate or suspend its awards to the school district.

The National Science Foundation grant is one of two federal awards that have been scrutinized by the federal government for misuse at San Diego Unified. Earlier this year the U.S. Department of Education concluded that more than $3 million in federal funding for low-income students, child nutrition and other programs was improperly used on a bonus for employees leaving the school district, without getting federal approval beforehand. Whether San Diego Unified will have to repay all of some of those costs is unclear.

Working out the National Science Foundation settlement has also cost San Diego Unified at least $130,000 in legal fees to Coughlan, Semmer and Lipman LLP and $80,000 in forensic analysis, according to school board minutes.

I’ve been checking in periodically with U.S. Department of Education spokesman Jim Bradshaw about whether the government has decided what, if anything, to charge San Diego Unified for the misuse of funds on the low-income and child nutrition grants. No word yet. Check back for updates later in the week.


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