Dallas School District Settles E-Rate Case

Federal authorities say the cash-strapped Dallas school district has agreed to financial penalties to settle claims that it abused a government program that provides Internet access to lower-income schools.

The settlement announced Friday requires the district to abandon more than $150 million in requests for federal funding and pay $750,000. The district faces a $30 million budget shortfall.

The Justice Department and the U.S. Attorney's Office in Dallas say the school district engaged in noncompetitive bidding practices and accepted improper gifts from vendors, including free use of a yacht.

The E-Rate program uses telephone fees to provide needy schools and libraries the funds to pay for hardware and monthly Internet connection fees.

Copyright AP - Associated Press
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