Whistle Blowing Policy in Schools

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What is educational fraud and why is there a need for whistleblowing?

Higher education has become a lucrative business for thousands of colleges and universities across the country. Most of these institutes rely on the $150 billion they receive in federally backed student loans and grants to stay in business, so they can keep driving up enrollment prices without worrying about attendance.

However, many schools still turn to fraud to increase their bottom line. Anti‐kickback laws are violated by illegally paying recruiters commissions, students grades are inflated to qualify for more grant money, and accreditation standards are failed to comply with in order to save on expenses.

These education scams leave the future graduates with lackluster career prospects and overwhelming debt.

Unlike publicly funded state colleges or private nonprofit universities, for‐profit schools treat education as a business and try to maximize their profits by increasing enrollment while saving money on expenses like teacher salaries and extracurricular activities. High-pressure and deceptive sales tactics are often employed, such as misrepresenting the quality of their facilities and programs. A 2010 report by the Government Accountability Office found that almost all for‐profit institutions devised suspect and potentially fraudulent business practices. All forms of education fraud are prosecuted under the False Claims Act, which has its own provisions for whistleblower protection and rewards.

It’s easy for schools to relegate the issue of having and implementing a whistleblower system to the bottom of their daily ‘to-do’ lists. A robust whistleblower policy is however an important part of managing a school’s Student Duty of Care, Workplace Health and Safety and School Governance requirements.

Whistleblowing should not be seen by schools as threatening or complex, but as a process which encourages compliance amongst staff and also works to protect students, school executives and governors.

What are the types of educational fraud?


The U.S. Department of Education awards $120 billion every year in student aid. This federal student aid takes the form of grants, low-interest loans, or work-study funds.

These taxpayer dollars help students afford higher education at colleges, universities, trade schools, and other post-secondary education programs. The schools may be public or private and non-profit or for-profit.

Both the students and the schools must meet eligibility requirements to receive these federal funds. The federal Higher Education Act requires that the schools must be accredited by an independent agency, must enter into a program participation agreement with the Department of Education, and must follow certain standards to maintain accreditation and be eligible for student aid dollars.

Kickbacks: Paying recruiters to enroll students

A common illegal practice is to pay recruiters for convincing undergraduates to enroll. The Higher Education Act (HEA) prohibits schools that receive federal funding from offering or paying any type of commission, bonus, referral fee or other types of incentive based on student enrollment. This rule extends to agents and independent contractors associated with the institution.


Fraudsters also frequently target state and federal research grants.

Grant fraud can take many forms, such as:

  • Lying on a grant application,
  • Misrepresenting grant-funded activities and research results
  • Embezzling and misappropriating grant funds
  • Paying bribes to help obtain a grant in the first instance


In addition to federal spending on education programs, local school districts and other state education programs devote substantial resources to elementary and secondary education.

By some estimates, non-federal direct spending totals over $600 billion annually.

  • Charter schools inflating attendance rates and learning hours to obtain excessive reimbursements
  • Admitting unqualified students into disability-related programs
  • Overcharging public education purchasers for goods or services, including fraud in the E-Rate program
  • Paying kickbacks or bribes to secure contracts
  • Using Grant Money for Improper Purposes

Grant funding from federal agencies allows higher education institutes to conduct research and increase their academic standing and desirability. However, money granted must be used toward researching topics the government considers important. Some schools agree to use a fund for one purpose in order to receive the money, before using it for other things.

Forged degrees:

Perhaps the crudest form of academic fraud is the counterfeiting or purchasing of downright forged degrees. Degree counterfeiting outfits come in various forms, from small storefront operations in New York City’s Chinatown to ready-to-order internet sites.

In one recent episode, Indian authorities in 2017 charged a man with the sale 2,000 forged degrees in Bangalore, a city in which no less than 40,000 people are said to have gained employment on the basis of fake credentials, according to police estimates.

Degree shops have recently also sprung up on the on the Syrian-Turkish border, where degree merchants seek to take advantage of desperate Syrian refugees and migrants by selling them forged documents on their way to Europe. A high school diploma reportedly costs USD $600, while a university degree can be as much as USD $2,500.

In Manila, meanwhile, crude forgeries of academic documents can be openly purchased for a few dollars from hole-in-the-wall shops

What are some example cases of whistle blowing in schools

The sad reality is that school level fraud occurs every day. It’s the PTA member who takes a couple dollars out of a collection to grab a coffee with a mental note to replace it tomorrow. It’s the football coach who buys pizzas for the team using uniform funds, but forgets to replace it. It’s the school bookkeeper who takes $200 from a field trip collection, to pay for another school cost and does not create a journal entry to record the transfer of funds.


It happens all the time. Here are some noteworthy examples:


In 2012, an instance totaling $3 million over a three-year period happened in Oakland, California where a school administrator and her husband, the school’s chief executive, embezzled funds through several of their privately-owned companies.
In 2012, a British Columbia school district charged one of its former school bookkeepers with defrauding one of its secondary schools. The case centered around dozens of bogus checks from the school that the bookkeeper pocketed directly. It was also suspected that cash collected for student fees was stolen. This activity slowly took place over 2 years and the district estimates that over $100,000 was taken by the bookkeeper.
In 2016, a Texas school district was notified by local police of a criminal investigation. A forensic audit revealed that almost $3,000 was stolen from the band activity fund and that a former employee was given a $70,000 paycheck, by mistake – which was cashed and used to buy a Mercedes.

This kind of fraud happens far too frequently. It not only causes financial losses to the schools and their districts, but has a negative impact on public relations, as well as the perception of safety in the schools.

Districts need to be seen as strong stewards of public funds. When parents, volunteers, and school staff see that the funds they worked hard to raise are not being protected, they can lose trust in their district. Further, if a fraud case goes to court, it places a large burden on district employees.

What the common cases of educational fraud?

Plagiarism (copying lines from others’ published work without the proper and required citations) and dishonesty in exams or examinations are the most common forms of academic dishonesty. Obtaining access to exam papers prior to the examination, as well as collaborating with others on the fulfillment of a project which should have been handled separately, are examples of additional types.

Whistleblowing appears to be a mechanism for correcting misbehavior, such as academic misconduct. Whistle-blowing is commonly defined as the act of reporting to superiors information concerning alleged organizational misconduct by members of the organization. The disclosure receiver is a person or organization that is thought to have the ability to correct the violation. An internal disclosure receiver is someone who gets the disclosure from within the organization, whereas an external disclosure recipient is someone from outside the organization who has the authority to expose and remedy the situation that has happened In order to address academic dishonesty at a university, one option is to encourage students (and staff) to report suspected cases of dishonesty either formally (through a discussion with the student who committed academic dishonesty, for example) or informally (through a discussion with the student who committed academic dishonesty)

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