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The Cleveland school district has now spent nearly $700,000 investigating why it failed to collect more than $8 million in rebates through the federal E-rate program for technology equipment installed in schools.

(Plain Dealer File Photo)

CLEVELAND, Ohio - The Cleveland school district has now spent nearly $700,000 sorting out how it failed to apply for and collect more than $8 million in federal technology rebates.

It has also apparently not recovered a dime of those missed rebates, at least not yet.

The district cannot show any recovery of that money, 18 months after the city's school construction watchdog panel pointed out the failure, either from the federal government, its former rebate consultant or two former employees it blames for the mistake.

"Our intent is to seek recovery of funds as appropriate," district spokesperson Roseann Canfora said Wednesday. "The process is ongoing and because it is the subject of pending or anticipated litigation, there is nothing more to share at this time."

She declined to say what, if any, legal action the district has filed to date. There do not appear to be any cases filed related to these rebates in Cuyahoga Common Pleas Court.

But the district's bills to investigate the failure have risen beyond the $500,000 in then-incomplete costs the district had revealed in January.

She said bills for the investigation by the Squire Patton Boggs law firm now stand at $693,000.

The Bond Accountability Commission, the district's construction watchdog panel, reported in 2015 that district officials failed on multiple occasions to collect federal rebates on internet connectivity and communications equipment installed in new schools between 2006 and 2011.

Though the district had pre-approval from the so-called "E-Rate" program for $12.28 million in rebates on the work, it received only $3.71 million, the report states.

That left a gap of $8.5 million that the district never collected.

The majority of the mistakes occurred before district CEO Eric Gordon took office in 2011, though the district missed some application deadlines and did not respond to warnings raised by the BAC under Gordon's watch.

The district hired Squire, Patton, Boggs for $550/hour shortly after the BAC released its findings, to find out what happened and guide recovery of the money. That firm reached essentially the same conclusion as the BAC had, just in more detail.

State Auditor David Yost also had very similar findings in August, though his investigators took the added step of insuring that proper equipment had been installed and that fraud had not prevented the district from collecting the money.

"This was a combination of poor management, weak policies and a lack of communications that resulted in huge losses," Yost said. "It's not criminal, it's stupid - a very big 'stupid."