Diploma Mills: Federal Employees Have Obtained Degrees from	 
Diploma Mills and Other Unaccredited Schools, Some at Government 
Expense (11-MAY-04, GAO-04-771T).				 
                                                                 
As requested, GAO conducted an investigation to determine whether
the federal government has paid for degrees from diploma mills	 
and other unaccredited postsecondary schools. Section 4107 of	 
title 5, U. S. Code, only permits the federal government to pay  
for the cost of academic degree training provided by a college or
university that is accredited by a nationally recognized	 
accrediting body. GAO was also asked to determine whether federal
employees who hold senior-level positions have degrees from	 
diploma mills and other unaccredited schools. This report	 
summarizes our investigative findings.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-771T					        
    ACCNO:   A09993						        
  TITLE:     Diploma Mills: Federal Employees Have Obtained Degrees   
from Diploma Mills and Other Unaccredited Schools, Some at	 
Government Expense						 
     DATE:   05/11/2004 
  SUBJECT:   Adult education					 
	     Colleges and universities				 
	     Education or training				 
	     Education or training costs			 
	     Educational standards				 
	     Higher education					 
	     Internal controls					 

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GAO-04-771T

Madam Chairman and Members of the Committee:

I am pleased to be here today to discuss issues related to degrees from
"diploma mills" and other unaccredited postsecondary schools. As you
requested, we conducted an investigation to determine whether the federal
government has paid for degrees from diploma mills and other unaccredited
postsecondary schools. Section 4107 of title 5, U. S. Code, only permits
the federal government to pay for the cost of academic degree training
provided by a college or university that is accredited by a nationally
recognized accrediting body. You also asked us to determine whether
federal employees who hold senior-level positions have degrees from
diploma mills and other unaccredited schools. My testimony today
summarizes our investigative findings.

We conducted our investigation from July 2003 through February 2004, in
accordance with quality standards for investigations as set forth by the
President's Council on Integrity and Efficiency. We searched the Internet
for nontraditional, unaccredited, postsecondary schools that offer degrees
for a relatively low flat fee, promote the award of academic credits based
on life experience, and do not require any classroom instruction. We
requested that four such schools provide information on the number of
current and former students identified in their records as federal
employees and payment of fees for such federal employees by the federal
government. In addition, posing as a prospective student who is employed
by a federal agency, our investigator contacted three unaccredited schools
to obtain information on how he might have a federal agency pay for a
degree.

Additionally, we requested that eight federal agencies-the Departments of
Education (ED), Energy (DOE), Health and Human Services (HHS), Homeland
Security (DHS), Transportation (DOT), and Veterans Affairs (VA); the Small
Business Administration (SBA), and the Office of Personnel Management
(OPM)-provide us with a list of senior employees, level GS-15 (or
equivalent) or higher, and the names of any postsecondary institutions
from which such employees had reported receiving degrees. We compared the
names of the schools on the lists provided by these agencies with those
that are accredited by accrediting bodies recognized by the Department of
Education. We also requested that the agencies examine their financial
records to determine if they had paid for degrees from unaccredited
schools, and we interviewed six federal employees who have obtained
degrees from unaccredited schools.

Summary

In summary, 3 of the 4 unaccredited schools responded to our requests for
information and provided records that identified 463 students employed by
the federal government. Two of the four schools provided records that
federal agencies paid them $150,387.80 for the fees of federal employee
students. In addition, DOE and DOT advised us of separate payments
totaling $19,082.94 for expenses associated with degrees from these two
schools, for total federal payments of $169,470.74 to them. However, for
the reasons explained below, the records provided by the schools and
agencies likely understate the extent of federal payments for degrees at
diploma mills and other unaccredited schools.

Data provided by 8 agencies indicated that 28 senior-level employees have
degrees from diploma mills and other unaccredited schools. In our
follow-up interviews with six of these employees and their managers, we
were told that experience, rather than educational credentials, was
considered in hiring and promotion decisions concerning these employees.
Again, however, for reasons set forth below, this number is believed to be
an understatement of the actual number of employees at these 8 agencies
who have degrees from diploma mills and other unaccredited schools.

Background

The Homeland Security Act amended section 4107 of title 5, U. S. Code, by
allowing federal reimbursement for degrees only from accredited
institutions. Specifically, section 4107 states that an agency may "pay or
reimburse the costs of academic degree training ... if such training ...
is accredited and is provided by a college or university that is
accredited by a nationally recognized body." (Emphasis supplied). For
purposes of this provision, a "nationally recognized body" is a regional,
national, or international accrediting organization recognized by the
Department of Education.1 Because the law governs only academic degree
training, it does not preclude an agency from paying for the costs of
individual training courses offered by unaccredited institutions. Prior to
the enactment of the Homeland Security Act, federal agencies were not
authorized to pay for employee academic degree training unless the head of
the agency determined that it was necessary to assist in recruitment or
retention of

employees in occupations in which the government had a shortage of
qualified personnel.2

Accreditation of degree-granting institutions in the United States is a
voluntary process. Unaccredited schools, and the quality of education they
offer, vary significantly. At one end of the spectrum are schools that
offer standard curricula traditionally found at accredited universities.
Other schools, commonly referred to as diploma mills, sell academic
degrees based upon life experience or substandard or negligible academic
work. Some diploma mills require no academic work at all and merely sell
degrees for a fee, such as those we discussed in our November 2002
report.3

Records Produced by Agencies and Schools Understate Federal Payments for
Degrees from Unaccredited Schools

Several factors make it extremely difficult, if not impossible, to
determine the extent of unauthorized federal payments for degrees issued
by unaccredited schools. First, the data we received from both schools and
federal agencies understate the extent to which the federal government has
made such payments. Additionally, the way in which some agencies maintain
records of payments for employee education makes such information
inaccessible. For example, HHS responded to our request for records of
employee education payments by informing us that it could not produce them
because it maintains a large volume of such records in five different
accounting systems, has no way to differentiate academic degree training
from other training, and does not know whether payments for training made
through credit cards are captured in its training payment records.

Moreover, diploma mills and other unaccredited schools modify their
billing practices so students can obtain payments for degrees by the
federal government. Purporting to be a prospective student, our
investigator placed telephone calls to three schools that award academic
credits based on life experience and require no classroom instruction:
Barrington University (Mobile, Alabama); Lacrosse University (Bay St.
Louis, Mississippi); and Pacific Western University (Los Angeles,
California). These schools each charge a flat fee for a degree. For
example, fees for degrees for domestic students at Pacific Western
University are as follows: Bachelor of Science ($2,295); Master's Degree
in Business Administration ($2,395); and PhD ($2,595). School
representatives emphasized to our undercover investigator that they are
not in the business of providing, and do not permit students to enroll
for, individual courses or training. Instead, the schools market and
require payment for degrees on a flat-fee basis.

However, representatives of each school told our undercover investigator
that they would structure their charges in order to facilitate payment by
the federal government. Each agreed to divide the degree fee by the number
of courses a student was required to take, thereby creating a series of
payments as if a per course fee were charged. All of the school
representatives stated that students at their respective schools had
secured payment for their degrees by the federal government.

Information we obtained from two unaccredited schools confirms that the
federal government has paid for degrees at those schools. We asked four
such schools that charge a flat fee for degrees to provide records of
federal payments for student fees: California Coast University (Santa Ana,
California); Hamilton University (Evanston, Wyoming); Pacific Western
University (Los Angeles, California); and Kennedy-Western University
(Thousand Oaks, California). Hamilton University failed to respond to our
request. Pacific Western University reported that it could not locate any
records indicating that federal payments were made, although this claim
directly contradicts representations made to our undercover investigator
by a school representative that federal agencies had paid for degrees
obtained by Pacific Western University students.

Pacific Western University, California Coast University, and
Kennedy-Western University provided data indicating that 463 of their
students were federal employees. California Coast University and
Kennedy-Western University provided records indicating that they had
received $150,387.80 from federal agencies for 14 California Coast
University students and 50 Kennedy-Western University students. The
information is summarized in table 1.

Table 1: Federal Employees and Payments Associated with Unaccredited
Schools

                                        

                            Number of     Number of federal                   
                             students    employees for whom     Total tuition 
Department or agency identified as tuition payments were  payments made by 
                              federal                 madeb federal agenciesb
                           employeesa                       
Energy                          35                     3        $13,505.00 
Transportation                  17                       
Homeland Security               12                       
Health and Human                11                     4         $8,175.00 
Services                                                 
Veterans Affairs                13                     5        $12,535.00 
Office of Personnel              1                       
Management                                               
Education                        2                       
Defense                        257                    28        $68,248.05 
US Postal Service               29                     8        $24,970.00 
Agriculture                      5                     1         $1,500.00 
US Courts                        2                       
US Agency for Int'l.             1                       
Development                                              
Treasury                         8                     1         $2,050.00 
State                            3                       
Peace Corps                      1                       
National Aeronautics             9                     2         $2,131.25 
& Space Admin.                                           
General Services                 3                     1           $600.00 
Admin.                                                   
Federal Reserve Bank             1                       
Federal Deposit                  2                       
Insurance Corp.                                          
Federal                                                  
Communications                   1                       
Commission                                               
Environmental                    9                     2         $5,538.00 
Protection Agency                                        
Labor                            1                     1         $2,437.50 
Justice                         13                     5         $5,458.00 
Interior                         6                       
Commerce                         4                       
Unspecified                     17                     3         $3,240.00 
Total                          463                    64       $150,387.80 

Source: GAO analysis of data received from Kennedy-Western University,
California Coast University, and Pacific Western University.

aThese numbers represent information provided by three
schools-Kennedy-Western University, California Coast University, and
Pacific Western University.

bThese payments represent limited information provided from two
schools-Kennedy-Western University and California Coast University.

After identifying federal agencies that made payments to Kennedy-Western
and California Coast, we requested that DOE, HHS, and DOT provide records
of their education-related payments to schools for employees during the
last 5 years. As previously discussed, HHS advised us that it could not
provide the data. DOE and DOT provided data that identified payments of
$19,082.94, which were in addition to those reflected in table 1, for
expenses associated with Kennedy-Western. Thus, we found a total of
$169,470.74 in federal payments to these two unaccredited schools.

However, a comparison of the data received from the schools with the
information provided by DOE and DOT shows that the schools and the
agencies have likely understated federal payments. For example,
Kennedy-Western reported total payments of $13,505 from DOE for three
students, while DOE reported total payments of $14,532 to Kennedy-Western
for three different students. Thus, DOE made payments of at least $28,037
to Kennedy-Western. Additionally, DOT reported payments of $4,550 to
Kennedy-Western for one student, but Kennedy-Western did not report
receiving any money from DOT for that student.4

Senior-Level Federal Employees Have Degrees from Unaccredited Schools

On the basis of the information we obtained from eight agencies, we
determined that some senior-level employees obtained degrees from diploma
mills and other unaccredited schools. Specifically, we requested that
eight agencies review the personnel folders of GS-15 (or equivalent) and
above employees and provide us with the names of the postsecondary
institutions from which such employees reported receiving academic
degrees. The eight agencies were: ED, DOE, HHS, DHS, DOT, VA, SBA, and
OPM. The agencies informed us that their examination of personnel records
revealed that 28 employees listed degrees from unaccredited schools; and 1
employee received tuition reimbursement of $1,787.44 in connection with a
degree from such a school.

However, we believe that this number understates the number of federal
employees at these agencies who have such degrees. The agencies' ability
to identify degrees from unaccredited schools is limited by a number of
factors. First, diploma mills frequently use names similar to those used
by accredited schools, which often allows the diploma mills to be mistaken
for accredited schools. For example, Hamilton University of Evanston,
Wyoming, which is not accredited by an accrediting body recognized by ED,
has a name similar to Hamilton College, a fully accredited school in
Clinton, New York. Moreover, federal agencies told us that employee
records may contain incomplete or misspelled school names without
addresses. Thus, an employee's records may reflect a bachelor's degree
from Hamilton, but the records do not indicate whether the degree is from
Hamilton University, the unaccredited school, or Hamilton College, the
accredited institution. Further, we learned that there are no uniform
verification practices throughout the government whereby agencies can
obtain information and conduct effective queries on schools and their
accreditation status. Additionally, some agencies provided information
about only the most recent degrees that employees reported receiving.

We interviewed several federal employees who had reported receiving
degrees from unaccredited schools. These employees included three
management-level DOE employees who have emergency operations
responsibilities at the National Nuclear Security Administration (NNSA)
and security clearances. We also found one employee in the Senior
Executive Service at DOT and another at DHS who received degrees from
unaccredited schools for negligible work. Additional details of their
interviews are provided below.

Employees #1, #2, and #3 are managers in the Office of Emergency
Operations at NNSA and have "Q" level security clearances. Employee #1,
who was hired at NNSA in 2002, paid $5,000 for a masters degree in 1996
from LaSalle University, an unaccredited school that has been found to
have made false claims of accreditation.5 This individual obtained the
degree in 1996 while in the Air Force in order to advance his career. He
informed us that while serving as a Lieutenant Colonel in the Air Force,
he was told that he would need a master's degree in order to be considered
for promotion to colonel. He contacted LaSalle University and obtained a
degree based on life experience, courses he had taken previously in the
military, and courses for which he read books and wrote papers. Employee
#1 told us that he did not attend classes or take any tests, his master's
degree from LaSalle was a "joke," and he received it after paying
approximately $5,000.

Employee #2, hired at NNSA in 2000, received a bachelor's degree in 1992
from Chadwick University, an unaccredited school. Employee #2 never
attended classes but obtained the degree based on 30 credits for life
experience, several college level examination program tests, and nine
correspondence courses. The employee reported reading a book, writing a
paper, and taking a final exam for each of the nine courses. This is the
only postsecondary education this employee has obtained. Although agency
personnel records indicate that this individual is a candidate for a
master's degree program at an unaccredited foreign school, Employee #2 has
never completed any courses for such a degree.

Employee #3, hired at NNSA in 2000, received a PhD in engineering
administration in 1985 from Columbia Pacific University, an unaccredited
school. He performed course work required for a PhD at George Washington
University, a fully accredited school, but did not complete a
dissertation. Employee #3 claims to have completed a dissertation for
Columbia Pacific but did not attend classes or complete any coursework at
that school. In December 1999, the Marin County Superior Court ordered
Columbia Pacific University to cease operations within California. The
court determined that Columbia Pacific failed to meet various requirements
for issuing PhD degrees, awarded excessive credit based on life
experience, and failed to employ duly qualified staff.

Employee #4 is a Senior Executive Service official at DOT. Employee #4
received a Bachelor of Science degree within 6 to 8 months from Kent
College, an unaccredited school. Kent waived some credits while Employee
#4 completed three research papers and paid $3,500 for the degree. In
1992, Employee #4 listed the degree from Kent College on his application
for a master's degree program at an accredited school. Officials at the
school to which he applied did not identify Kent as an unaccredited school
with a history of awarding degrees based on negligible work. The
accredited school accepted Employee #4 into its master's program, and he
completed it.

Employee #5 was an employee in the Senior Executive Service at DHS at the
time of our interview but has since resigned. This employee received a
series of degrees based on negligible work from unaccredited Hamilton
University while working at the Department of Labor (DOL) in various
senior capacities. Between March and June 2000, this individual received a
bachelor's and a master's degree based on prior training and other life
and work experience. Subsequently, in March 2001, Employee #5 received a
PhD in computer information systems from Hamilton. This individual left
DOL and began working at DHS in a Senior Executive Service position in
April 2003. A security clearance update, initiated while the employee was
still at DOL but completed after the employee joined DHS, led to the
discovery of the degrees from Hamilton.

Concluding Remarks

In conclusion, the records that we obtained from schools and agencies
likely understate the extent to which the federal government has paid for
degrees from diploma mills and other unaccredited schools. Many agencies
have difficulty in providing reliable data because they do not have
systems in place to properly verify academic degrees or to detect fees for
degrees that are masked as fees for training courses. Additionally, the
agency data we obtained likely do not reflect the true extent to which
senior-level federal employees have diploma mill degrees. This is because
the agencies do not sufficiently verify the degrees that employees claim
to have or the schools that issued the degrees, which is necessary to
avoid confusion caused by the similarity between the names of accredited
schools and the names assumed by diploma mills. Finally, we found that
there are no uniform verification practices throughout the government
whereby agencies can obtain information and conduct effective queries on
schools and their accreditation status.

Madam Chairman, this concludes my prepared statement. I would be happy to
respond to any questions that you or Members of the Committee may have.

Contacts and Staff Acknowledgments

For further information about this testimony, please contact Robert J.
Cramer at (202) 512-7227; Andrew O'Connell at (202) 512-7449; or Paul
Desaulniers at (202) 512-7435.

(601139)
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