Audit: School Leaders Squandered Grant Money on Alcohol, Karaoke

The Knowledge Is Power Program Foundation, which runs a national franchise of charter schools, spent more than $10,000 in federal grant money on unauthorized alcohol and entertainment at staff retreats in New York City and Cancun, according to an audit by the U.S. Department of Education inspector general this month.

A group of 70 math teachers spent nearly $2,000 in federal funds on alcohol at one dinner while on a KIPP retreat in New York City in January 2005, the audit states. And at two separate retreats for school leaders in Cancun, Mexico, KIPP charged the federal government more than $7,000 for alcohol and more than $2,500 for DJs, karaoke services, and basketball equipment, according to the audit, which was first reported in Education Week.

Federal law prohibits the use of grant funds for alcohol and entertainment. The audit stated that otherwise KIPP generally met financial management requirements and did not compromise the goals of its grants. In a response letter, the KIPP controller, Tina Fachs, said the foundation had implemented a new policy to prevent the use of federal money for alcohol and entertainment.

"We're the no-excuses organization," a KIPP spokesman, Steve Mancini, said, adding that the foundation had reimbursed the misspent money. "It will not happen again."