This is the accessible text file for GAO report number GAO-04-771T 
entitled 'Diploma Mills: Federal Employees Have Obtained Degrees from 
Diploma Mills and Other Unaccredited Schools, Some at Government 
Expense' which was released on May 11, 2004.

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Testimony: 

Before the Committee on Governmental Affairs, U.S. Senate:

For Release on Delivery Expected at 10:00a.m. EDT Tuesday, May 11, 
2004:

Diploma Mills:

Federal Employees Have Obtained Degrees from Diploma Mills and Other 
Unaccredited Schools, Some at Government Expense:

Statement of Robert J. Cramer, Managing Director Office of Special 
Investigations:

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-631T]:

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.[Footnote 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.[Footnote 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.[Footnote 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:

Department or agency: Energy; 
Number of students identified as federal employees[A]: 35; 
Number of federal employees for whom tuition payments were made[B]: 3; 
Total tuition payments made by federal agencies[B]: $13,505.00.

Department or agency: Transportation; 
Number of students identified as federal employees[A]: 17; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Homeland Security; 
Number of students identified as federal employees[A]: 12; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Health and Human Services; 
Number of students identified as federal employees[A]: 11; 
Number of federal employees for whom tuition payments were made[B]: 4; 
Total tuition payments made by federal agencies[B]: $8,175.00.

Department or agency: Veterans Affairs; 
Number of students identified as federal employees[A]: 13; 
Number of federal employees for whom tuition payments were made[B]: 5; 
Total tuition payments made by federal agencies[B]: $12,535.00.

Department or agency: Office of Personnel Management; 
Number of students identified as federal employees[A]: 1; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Education; 
Number of students identified as federal employees[A]: 2; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Defense; 
Number of students identified as federal employees[A]: 257; 
Number of federal employees for whom tuition payments were made[B]: 28; 
Total tuition payments made by federal agencies[B]: $68,248.05.

Department or agency: US Postal Service; 
Number of students identified as federal employees[A]: 29; 
Number of federal employees for whom tuition payments were made[B]: 8; 
Total tuition payments made by federal agencies[B]: $24,970.00.

Department or agency: Agriculture; 
Number of students identified as federal employees[A]: 5; 
Number of federal employees for whom tuition payments were made[B]: 1; 
Total tuition payments made by federal agencies[B]: $1,500.00.

Department or agency: US Courts; 
Number of students identified as federal employees[A]: 2; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: US Agency for Int'l. Development; 
Number of students identified as federal employees[A]: 1; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Treasury; 
Number of students identified as federal employees[A]: 8; 
Number of federal employees for whom tuition payments were made[B]: 1; 
Total tuition payments made by federal agencies[B]: $2,050.00.

Department or agency: State; 
Number of students identified as federal employees[A]: 3; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Peace Corps; 
Number of students identified as federal employees[A]: 1; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: National Aeronautics & Space Admin.; 
Number of students identified as federal employees[A]: 9; 
Number of federal employees for whom tuition payments were made[B]: 2; 
Total tuition payments made by federal agencies[B]: $2,131.25.

Department or agency: General Services Admin.; 
Number of students identified as federal employees[A]: 3; 
Number of federal employees for whom tuition payments were made[B]: 1; 
Total tuition payments made by federal agencies[B]: $600.00.

Department or agency: Federal Reserve Bank; 
Number of students identified as federal employees[A]: 1; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Federal Deposit Insurance Corp.; 
Number of students identified as federal employees[A]: 2; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Federal Communications Commission; 
Number of students identified as federal employees[A]: 1; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Environmental Protection Agency; 
Number of students identified as federal employees[A]: 9; 
Number of federal employees for whom tuition payments were made[B]: 2; 
Total tuition payments made by federal agencies[B]: $5,538.00.

Department or agency: Labor; 
Number of students identified as federal employees[A]: 1; 
Number of federal employees for whom tuition payments were made[B]: 1; 
Total tuition payments made by federal agencies[B]: $2,437.50.

Department or agency: Justice; 
Number of students identified as federal employees[A]: 13; 
Number of federal employees for whom tuition payments were made[B]: 5; 
Total tuition payments made by federal agencies[B]: $5,458.00.

Department or agency: Interior; 
Number of students identified as federal employees[A]: 6; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Commerce; 
Number of students identified as federal employees[A]: 4; 
Number of federal employees for whom tuition payments were made[B]: 
[Empty]; 
Total tuition payments made by federal agencies[B]: [Empty].

Department or agency: Unspecified; 
Number of students identified as federal employees[A]: 17; 
Number of federal employees for whom tuition payments were made[B]: 3; 
Total tuition payments made by federal agencies[B]: $3,240.00.

Department or agency: Total; 
Number of students identified as federal employees[A]: 463; 
Number of federal employees for whom tuition payments were made[B]: 64; 
Total tuition payments made by federal agencies[B]: $150,387.80. 

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

[A] These numbers represent information provided by three schools--
Kennedy-Western University, California Coast University, and Pacific 
Western University.

[B] These payments represent limited information provided from two 
schools--Kennedy-Western University and California Coast University.

[End of table]

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.[Footnote 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.[Footnote 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):

FOOTNOTES

[1] 5 C.F.R.  410.308(b).

[2] 5 U.S.C. 4107(a) and (b).

[3] U.S. General Accounting Office, Purchases of Degrees from Diploma 
Mills, GAO-03-269R (Washington, D.C.: Nov. 21, 2002).

[4] Our investigation was limited to direct federal payments to schools 
and did not include federal reimbursements of school fees to employees.

[5] Four individuals were convicted in the Eastern District of 
Louisiana for mail fraud, wire fraud, and money laundering in 
connection with their operation of LaSalle University.