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Eighteen parents and seven financial-aid advisers in the Chicago area have been charged with federal student-aid fraud for allegedly obtaining more than $2.6-million in funds by purposefully underreporting their income on financial-aid applications. Two of the aid advisers worked at colleges.

At a Congressional hearing in April, the department's inspector general revealed that the agency has lost track of at least $450-million in the past three years. Much of the money was lost in duplicate payments to grant recipients, states, and contractors. But some of it, she said, was stolen or improperly spent by department employees and contractors.

The auditor-general is investigating the financial office of the provincial government of the Eastern Cape, which gets $827,000 a year from the federal government for a scholarship fund that is supposed to benefit 650 to 700 students from the impoverished province. At least some of the scholarships have gone unpaid as far back as 1997.

Corruption in admissions procedure, the sitting of exams and the allocation of scholarships is rampant in Chinese universities. One positive outcome of a recent plagiarism scandal is the design of a code of conduct for students and professors by Beijing's University.

Politicians obliged universities to hire friends in return for help in ensuring a steady flow of funds. By forging documents and bribing appropriate officials, university staff secure larger retirement checks than they are entitled to and retire before the customary age.

Admissions, courses, grades and diplomas are for sale in high profile higher institutions. Admissions officers offer expensive private lessons. Reforms should include an accreditation system, an entrance exam and an increase in financing.

The U.S. Education Department last week proposed new rules that would loosen a ban on incentive compensation for college recruiters and get rid of a financial-aid regulation. The proposal to eliminate the 12-hour rule follows years of debate. Distance-education providers have pushed the department and Congress to throw out the regulation, but others have cited fears that relaxing the rule would lead to fraud.

Community endowment funds are being experimented in Egypt. They are managed by village committees with the active participation of parents with support from the private sector. They lobby government for better resource allocation.

Contractors hired to build schools in Mbale district have accused primary school management committees of demanding bribes before releasing funds under the school facilitation grant programme.

A non-profit corporation that provides a high-speed computer network to colleges in New York State agreed last month to pay the federal government $1.4-million in a lawsuit alleging that it had misused a federal grant.