2022-001 The District did not have adequate internal controls for ensuring compliance with allowable activities and costs, procurement, and restricted purpose requirements. "See Schedule of Findings and Questioned Costs for chart/table" Background The Emergency Connectivity Fund (ECF) Program provides funding to meet the needs of students and school staff who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning. This is referred to as ?unmet need.? In fiscal year 2022, the District spent $1,980,574 in ECF Program funds to purchase laptops and Wi-Fi hotspots for students and school staff. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Allowable activities and costs ECF Program recipients must only seek reimbursement for the eligible devices and services provided to students and staff with unmet need. Recipients are prohibited from seeking and receiving reimbursement for eligible equipment and services purchased for use solely at the school or held for future use (i.e., warehousing). Procurement When using ECF Program funds to purchase eligible services and equipment, the Federal Communications Commission (FCC) requires recipients to comply with all applicable state or local laws by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase. State law and District policy allows for the purchase of goods and services from contracts awarded by another government or group of governments via an interlocal agreement or contract, often referred to as ?piggybacking.? If entering into such an agreement, the District must confirm the awarding entity followed all procurement laws and regulations applicable to the awarding entity when selecting the service provider. Restricted purpose ? unmet need When submitting applications to the FCC, schools only had to provide an estimate of their students? and staff?s unmet need. However, when requesting reimbursement, the District could only request program funds for eligible equipment and services provided to students and school staff with actual unmet need. Restricted purpose ? per-location and per-user limitations The FCC imposed per-location and per-user limitations to maximize the use of limited funds. Under the program, eligible schools could only be reimbursed for one connected device and Wi-Fi hotspot per student or school employee with unmet need, and no more than one fixed broadband connection per location, such as a student?s or employee?s residence. Description of Condition Allowable activities and costs/restricted purpose ? unmet need The District estimated unmet need for eligible equipment when it applied for ECF Program funds. However, our audit found the District?s internal controls were ineffective for ensuring it requested reimbursement only for eligible equipment provided to students and school staff with a documented unmet need. Specifically, the District purchased laptops, based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $1,756,800. However, the District did not maintain documentation showing it provided each laptop paid with program funds to a student or employee with unmet need. Procurement Our audit found the District?s internal controls were ineffective for ensuring it followed state law and its own policy when procuring equipment that it charged to the ECF Program. The District paid one service provider $1,756,800 for laptops, and did not maintain documentation showing the procurement method used and rationale for selecting the provider. Restricted purpose ? per-location and per-user limitations Our audit found the District?s internal controls were ineffective for demonstrating it complied with the FCC?s per-location and per-user limitations. Specifically, the District did not maintain documentation showing it monitored or had a tracking process in place to ensure it only provided one device or connection per user and location. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition Allowable activities and costs/restricted purpose ? unmet need District staff thought the estimate of unmet need provided during the application process was sufficient to comply with this requirement. They did not perform additional procedures to only request reimbursement for specific students and staff. Procurement Although the District staff compared the price paid to the awarding entity?s contract, it did not verify it paid the negotiated pricing for exact items. Restricted purpose ? per-location and per-user limitations Staff said they did not know the District needed to maintain documentation showing it only provided one device and/or connection per student and employee. Effect of Condition and Questioned Costs Allowable activities and costs/restricted purpose ? unmet need Because the District did not have documentation supporting whether it provided eligible equipment to students and school staff with actual unmet need, it cannot demonstrate compliance with the program?s requirements. Given the nature of the program and circumstances, it is likely that at least some of the equipment the District charged to the award addressed unmet needs. However, the lack of a documented assessment of students? and staff?s actual unmet need means that most costs are unsupported. Since we do not have a reasonable basis for estimating how much of the District?s expenditures are allowable, we are questioning all unsupported costs. Federal regulations require the State Auditor?s Office to report known questioned costs that are greater than $25,000 for each type of compliance requirement. We question costs when we find the District does not have adequate documentation to support expenditures. Procurement Without maintaining documentation showing the procurement method used, the District cannot demonstrate it complied with procurement requirements. Additionally, it cannot be sure all interested service providers had the opportunity to bid and that it obtained the lowest price for the laptop purchases. Restricted purpose ? per-location and per-user limitations Because the District did not maintain documentation, it cannot demonstrate compliance with the FCC?s restrictions. Additionally, we cannot determine whether the District only provided one device or connection per user and location. Recommendation We recommend the District work with the granting agency to determine audit resolution. We further recommend the District establish and follow internal controls to ensure staff fully understand the requirements for ECF awards. Specifically, the District should: ? Request reimbursement only for eligible equipment provided to students and staff with unmet need, and maintain documentation demonstrating compliance ? Comply with state law and its own policy when procuring goods and services paid with ECF Program funds, and keep documentation supporting the procurement methods it used ? Monitor to confirm it provides no more than one device per student and employee, and no more than one broadband connection per location, in compliance with the ECF Program?s requirements District?s Response The District does not concur with the audit finding or the $1.5 million of questioned costs. A component of the Emergency Connectivity Fund (ECF) program is to seek support for eligible equipment provided to students and school staff who would otherwise lack access to connected devices sufficient to engage in remote learning. When it comes to making this determination of unmet need, the Federal Communication Commission (FCC) explains that ?we think that schools are in the best position to determine whether their students and staff have devices and broadband services sufficient to meet their remote learning needs, and we recognize that they are making such decisions during the pandemic. We, therefore, will not impose any specific metrics or process requirements on those determinations.? Being forced into an unprecedented educational landscape amid a pandemic necessitated an expansive adoption of varying degrees of remote learning. Indeed, our district had the first confirmed student case of COVID-19 in the United States. These complexities unearthed many reasons why district issued devices are the only devices truly sufficient to face the new educational challenges of attempting to provide a free appropriate public education during a global health crisis. These include: consistent access to curriculum and supplemental resources through district licenses; providing access to accessibility tools not available to deploy on personal devices; web filtering of malicious content threatening student accounts off-campus and to meet e-Rate filtering requirements; content monitoring for timely intervention and support of students? social and emotional health which was significantly impacted by the pandemic; the ability to automatically authenticate student accounts for Zoom; the ability to conduct state required testing not allowed on personal devices; and the ability for technology staff to provide direct technical support through remote access. While the District was attempting to ensure all students had adequate support for learning activities amid a global health crisis, the District determined that students needed district devices and therefore had sufficient unmet need to justify 6,500 devices. While we only requested reimbursement for 4,000 devices, we know there was additional unmet need as we had over 6,500 devices in students? hands that did not support remote learning. The District firmly stands by those determinations. In the review of the District?s claim made in August 2022, the Auditor?s Office finds that we did not retain specific enough documentation to meet their interpretations of the compliance supplement which is issued for the purpose of suggesting audit practices. However, the stated program compliance standards are set in the establishing rules and the Code of Federal Regulations (CFR) 47 CFR sections 54.1700 et seq. In addition, The FCC states, ?will not impose any specific metrics or process requirements on those determinations.? The district retained documentation of our rationale of how the devices met the standards of the FCC and provided State Auditor?s Office (SAO) with this information. As such, the district maintains that it met all these requirements. Therefore, we disagree with the Auditor?s position regarding the narrowness of acceptable actions and processes relating to unmet need determinations. SAO also states the district did not retain documentation showing the procurement method used. However, the district did indeed provide the documentation and noted a quote was incorrect by $8,330. This had no impact on the total amount claimed for the program funds. The district has a review process for all purchase orders and reviewed the purchase orders for the claims of the grant. The funding and assistance to meet student needs during the pandemic was essential and necessary in all respects. The District did not take lightly our obligation to follow the established rules and guidance available to us. Based on the information outlined above, we feel strongly that we have fully accomplished that obligation. We have accounted for all our devices and have fulfilled the responsibility of determining the unmet needs of our students. We therefore do not believe that any of the $1.5 million in costs is in question. Auditor?s Remarks The State Auditor?s Office is sympathetic to the significant challenges the District faced during the COVID-19 pandemic, and deeply respects its commitment to student learning despite these challenges. SAO knows that in many cases, governments across Washington received significant pandemic-era federal funds without also receiving clear guidance on how to use them. Then, and now, SAO continues to advocate for clear, timely guidance from federal agencies to make sure Washington governments are not put in a difficult position at audit time. However, when auditing federal programs of any kind, governments must provide documentation to substantiate that they met the award requirements. As is our practice and audit standards require, we will review the status of this finding during our next audit. We value our partnership with the District in striving for transparency in public service. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 47 CFR Part 54, Universal Service, Subpart Q, Emergency Connectivity Fund, describes the ECF Program requirements.
2022-001 The District did not have adequate internal controls for ensuring compliance with allowable activities and costs, procurement, and restricted purpose requirements. "See Schedule of Findings and Questioned Costs for chart/table" Background The Emergency Connectivity Fund (ECF) Program provides funding to meet the needs of students and school staff who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning. This is referred to as ?unmet need.? In fiscal year 2022, the District spent $1,980,574 in ECF Program funds to purchase laptops and Wi-Fi hotspots for students and school staff. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Allowable activities and costs ECF Program recipients must only seek reimbursement for the eligible devices and services provided to students and staff with unmet need. Recipients are prohibited from seeking and receiving reimbursement for eligible equipment and services purchased for use solely at the school or held for future use (i.e., warehousing). Procurement When using ECF Program funds to purchase eligible services and equipment, the Federal Communications Commission (FCC) requires recipients to comply with all applicable state or local laws by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase. State law and District policy allows for the purchase of goods and services from contracts awarded by another government or group of governments via an interlocal agreement or contract, often referred to as ?piggybacking.? If entering into such an agreement, the District must confirm the awarding entity followed all procurement laws and regulations applicable to the awarding entity when selecting the service provider. Restricted purpose ? unmet need When submitting applications to the FCC, schools only had to provide an estimate of their students? and staff?s unmet need. However, when requesting reimbursement, the District could only request program funds for eligible equipment and services provided to students and school staff with actual unmet need. Restricted purpose ? per-location and per-user limitations The FCC imposed per-location and per-user limitations to maximize the use of limited funds. Under the program, eligible schools could only be reimbursed for one connected device and Wi-Fi hotspot per student or school employee with unmet need, and no more than one fixed broadband connection per location, such as a student?s or employee?s residence. Description of Condition Allowable activities and costs/restricted purpose ? unmet need The District estimated unmet need for eligible equipment when it applied for ECF Program funds. However, our audit found the District?s internal controls were ineffective for ensuring it requested reimbursement only for eligible equipment provided to students and school staff with a documented unmet need. Specifically, the District purchased laptops, based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $1,756,800. However, the District did not maintain documentation showing it provided each laptop paid with program funds to a student or employee with unmet need. Procurement Our audit found the District?s internal controls were ineffective for ensuring it followed state law and its own policy when procuring equipment that it charged to the ECF Program. The District paid one service provider $1,756,800 for laptops, and did not maintain documentation showing the procurement method used and rationale for selecting the provider. Restricted purpose ? per-location and per-user limitations Our audit found the District?s internal controls were ineffective for demonstrating it complied with the FCC?s per-location and per-user limitations. Specifically, the District did not maintain documentation showing it monitored or had a tracking process in place to ensure it only provided one device or connection per user and location. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition Allowable activities and costs/restricted purpose ? unmet need District staff thought the estimate of unmet need provided during the application process was sufficient to comply with this requirement. They did not perform additional procedures to only request reimbursement for specific students and staff. Procurement Although the District staff compared the price paid to the awarding entity?s contract, it did not verify it paid the negotiated pricing for exact items. Restricted purpose ? per-location and per-user limitations Staff said they did not know the District needed to maintain documentation showing it only provided one device and/or connection per student and employee. Effect of Condition and Questioned Costs Allowable activities and costs/restricted purpose ? unmet need Because the District did not have documentation supporting whether it provided eligible equipment to students and school staff with actual unmet need, it cannot demonstrate compliance with the program?s requirements. Given the nature of the program and circumstances, it is likely that at least some of the equipment the District charged to the award addressed unmet needs. However, the lack of a documented assessment of students? and staff?s actual unmet need means that most costs are unsupported. Since we do not have a reasonable basis for estimating how much of the District?s expenditures are allowable, we are questioning all unsupported costs. Federal regulations require the State Auditor?s Office to report known questioned costs that are greater than $25,000 for each type of compliance requirement. We question costs when we find the District does not have adequate documentation to support expenditures. Procurement Without maintaining documentation showing the procurement method used, the District cannot demonstrate it complied with procurement requirements. Additionally, it cannot be sure all interested service providers had the opportunity to bid and that it obtained the lowest price for the laptop purchases. Restricted purpose ? per-location and per-user limitations Because the District did not maintain documentation, it cannot demonstrate compliance with the FCC?s restrictions. Additionally, we cannot determine whether the District only provided one device or connection per user and location. Recommendation We recommend the District work with the granting agency to determine audit resolution. We further recommend the District establish and follow internal controls to ensure staff fully understand the requirements for ECF awards. Specifically, the District should: ? Request reimbursement only for eligible equipment provided to students and staff with unmet need, and maintain documentation demonstrating compliance ? Comply with state law and its own policy when procuring goods and services paid with ECF Program funds, and keep documentation supporting the procurement methods it used ? Monitor to confirm it provides no more than one device per student and employee, and no more than one broadband connection per location, in compliance with the ECF Program?s requirements District?s Response The District does not concur with the audit finding or the $1.5 million of questioned costs. A component of the Emergency Connectivity Fund (ECF) program is to seek support for eligible equipment provided to students and school staff who would otherwise lack access to connected devices sufficient to engage in remote learning. When it comes to making this determination of unmet need, the Federal Communication Commission (FCC) explains that ?we think that schools are in the best position to determine whether their students and staff have devices and broadband services sufficient to meet their remote learning needs, and we recognize that they are making such decisions during the pandemic. We, therefore, will not impose any specific metrics or process requirements on those determinations.? Being forced into an unprecedented educational landscape amid a pandemic necessitated an expansive adoption of varying degrees of remote learning. Indeed, our district had the first confirmed student case of COVID-19 in the United States. These complexities unearthed many reasons why district issued devices are the only devices truly sufficient to face the new educational challenges of attempting to provide a free appropriate public education during a global health crisis. These include: consistent access to curriculum and supplemental resources through district licenses; providing access to accessibility tools not available to deploy on personal devices; web filtering of malicious content threatening student accounts off-campus and to meet e-Rate filtering requirements; content monitoring for timely intervention and support of students? social and emotional health which was significantly impacted by the pandemic; the ability to automatically authenticate student accounts for Zoom; the ability to conduct state required testing not allowed on personal devices; and the ability for technology staff to provide direct technical support through remote access. While the District was attempting to ensure all students had adequate support for learning activities amid a global health crisis, the District determined that students needed district devices and therefore had sufficient unmet need to justify 6,500 devices. While we only requested reimbursement for 4,000 devices, we know there was additional unmet need as we had over 6,500 devices in students? hands that did not support remote learning. The District firmly stands by those determinations. In the review of the District?s claim made in August 2022, the Auditor?s Office finds that we did not retain specific enough documentation to meet their interpretations of the compliance supplement which is issued for the purpose of suggesting audit practices. However, the stated program compliance standards are set in the establishing rules and the Code of Federal Regulations (CFR) 47 CFR sections 54.1700 et seq. In addition, The FCC states, ?will not impose any specific metrics or process requirements on those determinations.? The district retained documentation of our rationale of how the devices met the standards of the FCC and provided State Auditor?s Office (SAO) with this information. As such, the district maintains that it met all these requirements. Therefore, we disagree with the Auditor?s position regarding the narrowness of acceptable actions and processes relating to unmet need determinations. SAO also states the district did not retain documentation showing the procurement method used. However, the district did indeed provide the documentation and noted a quote was incorrect by $8,330. This had no impact on the total amount claimed for the program funds. The district has a review process for all purchase orders and reviewed the purchase orders for the claims of the grant. The funding and assistance to meet student needs during the pandemic was essential and necessary in all respects. The District did not take lightly our obligation to follow the established rules and guidance available to us. Based on the information outlined above, we feel strongly that we have fully accomplished that obligation. We have accounted for all our devices and have fulfilled the responsibility of determining the unmet needs of our students. We therefore do not believe that any of the $1.5 million in costs is in question. Auditor?s Remarks The State Auditor?s Office is sympathetic to the significant challenges the District faced during the COVID-19 pandemic, and deeply respects its commitment to student learning despite these challenges. SAO knows that in many cases, governments across Washington received significant pandemic-era federal funds without also receiving clear guidance on how to use them. Then, and now, SAO continues to advocate for clear, timely guidance from federal agencies to make sure Washington governments are not put in a difficult position at audit time. However, when auditing federal programs of any kind, governments must provide documentation to substantiate that they met the award requirements. As is our practice and audit standards require, we will review the status of this finding during our next audit. We value our partnership with the District in striving for transparency in public service. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 47 CFR Part 54, Universal Service, Subpart Q, Emergency Connectivity Fund, describes the ECF Program requirements.
2022-001 The District did not have adequate internal controls for ensuring compliance with allowable activities and costs, procurement, and restricted purpose requirements. "See Schedule of Findings and Questioned Costs for chart/table" Background The Emergency Connectivity Fund (ECF) Program provides funding to meet the needs of students and school staff who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning. This is referred to as ?unmet need.? In fiscal year 2022, the District spent $1,980,574 in ECF Program funds to purchase laptops and Wi-Fi hotspots for students and school staff. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Allowable activities and costs ECF Program recipients must only seek reimbursement for the eligible devices and services provided to students and staff with unmet need. Recipients are prohibited from seeking and receiving reimbursement for eligible equipment and services purchased for use solely at the school or held for future use (i.e., warehousing). Procurement When using ECF Program funds to purchase eligible services and equipment, the Federal Communications Commission (FCC) requires recipients to comply with all applicable state or local laws by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase. State law and District policy allows for the purchase of goods and services from contracts awarded by another government or group of governments via an interlocal agreement or contract, often referred to as ?piggybacking.? If entering into such an agreement, the District must confirm the awarding entity followed all procurement laws and regulations applicable to the awarding entity when selecting the service provider. Restricted purpose ? unmet need When submitting applications to the FCC, schools only had to provide an estimate of their students? and staff?s unmet need. However, when requesting reimbursement, the District could only request program funds for eligible equipment and services provided to students and school staff with actual unmet need. Restricted purpose ? per-location and per-user limitations The FCC imposed per-location and per-user limitations to maximize the use of limited funds. Under the program, eligible schools could only be reimbursed for one connected device and Wi-Fi hotspot per student or school employee with unmet need, and no more than one fixed broadband connection per location, such as a student?s or employee?s residence. Description of Condition Allowable activities and costs/restricted purpose ? unmet need The District estimated unmet need for eligible equipment when it applied for ECF Program funds. However, our audit found the District?s internal controls were ineffective for ensuring it requested reimbursement only for eligible equipment provided to students and school staff with a documented unmet need. Specifically, the District purchased laptops, based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $1,756,800. However, the District did not maintain documentation showing it provided each laptop paid with program funds to a student or employee with unmet need. Procurement Our audit found the District?s internal controls were ineffective for ensuring it followed state law and its own policy when procuring equipment that it charged to the ECF Program. The District paid one service provider $1,756,800 for laptops, and did not maintain documentation showing the procurement method used and rationale for selecting the provider. Restricted purpose ? per-location and per-user limitations Our audit found the District?s internal controls were ineffective for demonstrating it complied with the FCC?s per-location and per-user limitations. Specifically, the District did not maintain documentation showing it monitored or had a tracking process in place to ensure it only provided one device or connection per user and location. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition Allowable activities and costs/restricted purpose ? unmet need District staff thought the estimate of unmet need provided during the application process was sufficient to comply with this requirement. They did not perform additional procedures to only request reimbursement for specific students and staff. Procurement Although the District staff compared the price paid to the awarding entity?s contract, it did not verify it paid the negotiated pricing for exact items. Restricted purpose ? per-location and per-user limitations Staff said they did not know the District needed to maintain documentation showing it only provided one device and/or connection per student and employee. Effect of Condition and Questioned Costs Allowable activities and costs/restricted purpose ? unmet need Because the District did not have documentation supporting whether it provided eligible equipment to students and school staff with actual unmet need, it cannot demonstrate compliance with the program?s requirements. Given the nature of the program and circumstances, it is likely that at least some of the equipment the District charged to the award addressed unmet needs. However, the lack of a documented assessment of students? and staff?s actual unmet need means that most costs are unsupported. Since we do not have a reasonable basis for estimating how much of the District?s expenditures are allowable, we are questioning all unsupported costs. Federal regulations require the State Auditor?s Office to report known questioned costs that are greater than $25,000 for each type of compliance requirement. We question costs when we find the District does not have adequate documentation to support expenditures. Procurement Without maintaining documentation showing the procurement method used, the District cannot demonstrate it complied with procurement requirements. Additionally, it cannot be sure all interested service providers had the opportunity to bid and that it obtained the lowest price for the laptop purchases. Restricted purpose ? per-location and per-user limitations Because the District did not maintain documentation, it cannot demonstrate compliance with the FCC?s restrictions. Additionally, we cannot determine whether the District only provided one device or connection per user and location. Recommendation We recommend the District work with the granting agency to determine audit resolution. We further recommend the District establish and follow internal controls to ensure staff fully understand the requirements for ECF awards. Specifically, the District should: ? Request reimbursement only for eligible equipment provided to students and staff with unmet need, and maintain documentation demonstrating compliance ? Comply with state law and its own policy when procuring goods and services paid with ECF Program funds, and keep documentation supporting the procurement methods it used ? Monitor to confirm it provides no more than one device per student and employee, and no more than one broadband connection per location, in compliance with the ECF Program?s requirements District?s Response The District does not concur with the audit finding or the $1.5 million of questioned costs. A component of the Emergency Connectivity Fund (ECF) program is to seek support for eligible equipment provided to students and school staff who would otherwise lack access to connected devices sufficient to engage in remote learning. When it comes to making this determination of unmet need, the Federal Communication Commission (FCC) explains that ?we think that schools are in the best position to determine whether their students and staff have devices and broadband services sufficient to meet their remote learning needs, and we recognize that they are making such decisions during the pandemic. We, therefore, will not impose any specific metrics or process requirements on those determinations.? Being forced into an unprecedented educational landscape amid a pandemic necessitated an expansive adoption of varying degrees of remote learning. Indeed, our district had the first confirmed student case of COVID-19 in the United States. These complexities unearthed many reasons why district issued devices are the only devices truly sufficient to face the new educational challenges of attempting to provide a free appropriate public education during a global health crisis. These include: consistent access to curriculum and supplemental resources through district licenses; providing access to accessibility tools not available to deploy on personal devices; web filtering of malicious content threatening student accounts off-campus and to meet e-Rate filtering requirements; content monitoring for timely intervention and support of students? social and emotional health which was significantly impacted by the pandemic; the ability to automatically authenticate student accounts for Zoom; the ability to conduct state required testing not allowed on personal devices; and the ability for technology staff to provide direct technical support through remote access. While the District was attempting to ensure all students had adequate support for learning activities amid a global health crisis, the District determined that students needed district devices and therefore had sufficient unmet need to justify 6,500 devices. While we only requested reimbursement for 4,000 devices, we know there was additional unmet need as we had over 6,500 devices in students? hands that did not support remote learning. The District firmly stands by those determinations. In the review of the District?s claim made in August 2022, the Auditor?s Office finds that we did not retain specific enough documentation to meet their interpretations of the compliance supplement which is issued for the purpose of suggesting audit practices. However, the stated program compliance standards are set in the establishing rules and the Code of Federal Regulations (CFR) 47 CFR sections 54.1700 et seq. In addition, The FCC states, ?will not impose any specific metrics or process requirements on those determinations.? The district retained documentation of our rationale of how the devices met the standards of the FCC and provided State Auditor?s Office (SAO) with this information. As such, the district maintains that it met all these requirements. Therefore, we disagree with the Auditor?s position regarding the narrowness of acceptable actions and processes relating to unmet need determinations. SAO also states the district did not retain documentation showing the procurement method used. However, the district did indeed provide the documentation and noted a quote was incorrect by $8,330. This had no impact on the total amount claimed for the program funds. The district has a review process for all purchase orders and reviewed the purchase orders for the claims of the grant. The funding and assistance to meet student needs during the pandemic was essential and necessary in all respects. The District did not take lightly our obligation to follow the established rules and guidance available to us. Based on the information outlined above, we feel strongly that we have fully accomplished that obligation. We have accounted for all our devices and have fulfilled the responsibility of determining the unmet needs of our students. We therefore do not believe that any of the $1.5 million in costs is in question. Auditor?s Remarks The State Auditor?s Office is sympathetic to the significant challenges the District faced during the COVID-19 pandemic, and deeply respects its commitment to student learning despite these challenges. SAO knows that in many cases, governments across Washington received significant pandemic-era federal funds without also receiving clear guidance on how to use them. Then, and now, SAO continues to advocate for clear, timely guidance from federal agencies to make sure Washington governments are not put in a difficult position at audit time. However, when auditing federal programs of any kind, governments must provide documentation to substantiate that they met the award requirements. As is our practice and audit standards require, we will review the status of this finding during our next audit. We value our partnership with the District in striving for transparency in public service. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 47 CFR Part 54, Universal Service, Subpart Q, Emergency Connectivity Fund, describes the ECF Program requirements.
2022-001 The District did not have adequate internal controls for ensuring compliance with allowable activities and costs, procurement, and restricted purpose requirements. "See Schedule of Findings and Questioned Costs for chart/table" Background The Emergency Connectivity Fund (ECF) Program provides funding to meet the needs of students and school staff who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning. This is referred to as ?unmet need.? In fiscal year 2022, the District spent $1,980,574 in ECF Program funds to purchase laptops and Wi-Fi hotspots for students and school staff. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Allowable activities and costs ECF Program recipients must only seek reimbursement for the eligible devices and services provided to students and staff with unmet need. Recipients are prohibited from seeking and receiving reimbursement for eligible equipment and services purchased for use solely at the school or held for future use (i.e., warehousing). Procurement When using ECF Program funds to purchase eligible services and equipment, the Federal Communications Commission (FCC) requires recipients to comply with all applicable state or local laws by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase. State law and District policy allows for the purchase of goods and services from contracts awarded by another government or group of governments via an interlocal agreement or contract, often referred to as ?piggybacking.? If entering into such an agreement, the District must confirm the awarding entity followed all procurement laws and regulations applicable to the awarding entity when selecting the service provider. Restricted purpose ? unmet need When submitting applications to the FCC, schools only had to provide an estimate of their students? and staff?s unmet need. However, when requesting reimbursement, the District could only request program funds for eligible equipment and services provided to students and school staff with actual unmet need. Restricted purpose ? per-location and per-user limitations The FCC imposed per-location and per-user limitations to maximize the use of limited funds. Under the program, eligible schools could only be reimbursed for one connected device and Wi-Fi hotspot per student or school employee with unmet need, and no more than one fixed broadband connection per location, such as a student?s or employee?s residence. Description of Condition Allowable activities and costs/restricted purpose ? unmet need The District estimated unmet need for eligible equipment when it applied for ECF Program funds. However, our audit found the District?s internal controls were ineffective for ensuring it requested reimbursement only for eligible equipment provided to students and school staff with a documented unmet need. Specifically, the District purchased laptops, based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $1,756,800. However, the District did not maintain documentation showing it provided each laptop paid with program funds to a student or employee with unmet need. Procurement Our audit found the District?s internal controls were ineffective for ensuring it followed state law and its own policy when procuring equipment that it charged to the ECF Program. The District paid one service provider $1,756,800 for laptops, and did not maintain documentation showing the procurement method used and rationale for selecting the provider. Restricted purpose ? per-location and per-user limitations Our audit found the District?s internal controls were ineffective for demonstrating it complied with the FCC?s per-location and per-user limitations. Specifically, the District did not maintain documentation showing it monitored or had a tracking process in place to ensure it only provided one device or connection per user and location. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition Allowable activities and costs/restricted purpose ? unmet need District staff thought the estimate of unmet need provided during the application process was sufficient to comply with this requirement. They did not perform additional procedures to only request reimbursement for specific students and staff. Procurement Although the District staff compared the price paid to the awarding entity?s contract, it did not verify it paid the negotiated pricing for exact items. Restricted purpose ? per-location and per-user limitations Staff said they did not know the District needed to maintain documentation showing it only provided one device and/or connection per student and employee. Effect of Condition and Questioned Costs Allowable activities and costs/restricted purpose ? unmet need Because the District did not have documentation supporting whether it provided eligible equipment to students and school staff with actual unmet need, it cannot demonstrate compliance with the program?s requirements. Given the nature of the program and circumstances, it is likely that at least some of the equipment the District charged to the award addressed unmet needs. However, the lack of a documented assessment of students? and staff?s actual unmet need means that most costs are unsupported. Since we do not have a reasonable basis for estimating how much of the District?s expenditures are allowable, we are questioning all unsupported costs. Federal regulations require the State Auditor?s Office to report known questioned costs that are greater than $25,000 for each type of compliance requirement. We question costs when we find the District does not have adequate documentation to support expenditures. Procurement Without maintaining documentation showing the procurement method used, the District cannot demonstrate it complied with procurement requirements. Additionally, it cannot be sure all interested service providers had the opportunity to bid and that it obtained the lowest price for the laptop purchases. Restricted purpose ? per-location and per-user limitations Because the District did not maintain documentation, it cannot demonstrate compliance with the FCC?s restrictions. Additionally, we cannot determine whether the District only provided one device or connection per user and location. Recommendation We recommend the District work with the granting agency to determine audit resolution. We further recommend the District establish and follow internal controls to ensure staff fully understand the requirements for ECF awards. Specifically, the District should: ? Request reimbursement only for eligible equipment provided to students and staff with unmet need, and maintain documentation demonstrating compliance ? Comply with state law and its own policy when procuring goods and services paid with ECF Program funds, and keep documentation supporting the procurement methods it used ? Monitor to confirm it provides no more than one device per student and employee, and no more than one broadband connection per location, in compliance with the ECF Program?s requirements District?s Response The District does not concur with the audit finding or the $1.5 million of questioned costs. A component of the Emergency Connectivity Fund (ECF) program is to seek support for eligible equipment provided to students and school staff who would otherwise lack access to connected devices sufficient to engage in remote learning. When it comes to making this determination of unmet need, the Federal Communication Commission (FCC) explains that ?we think that schools are in the best position to determine whether their students and staff have devices and broadband services sufficient to meet their remote learning needs, and we recognize that they are making such decisions during the pandemic. We, therefore, will not impose any specific metrics or process requirements on those determinations.? Being forced into an unprecedented educational landscape amid a pandemic necessitated an expansive adoption of varying degrees of remote learning. Indeed, our district had the first confirmed student case of COVID-19 in the United States. These complexities unearthed many reasons why district issued devices are the only devices truly sufficient to face the new educational challenges of attempting to provide a free appropriate public education during a global health crisis. These include: consistent access to curriculum and supplemental resources through district licenses; providing access to accessibility tools not available to deploy on personal devices; web filtering of malicious content threatening student accounts off-campus and to meet e-Rate filtering requirements; content monitoring for timely intervention and support of students? social and emotional health which was significantly impacted by the pandemic; the ability to automatically authenticate student accounts for Zoom; the ability to conduct state required testing not allowed on personal devices; and the ability for technology staff to provide direct technical support through remote access. While the District was attempting to ensure all students had adequate support for learning activities amid a global health crisis, the District determined that students needed district devices and therefore had sufficient unmet need to justify 6,500 devices. While we only requested reimbursement for 4,000 devices, we know there was additional unmet need as we had over 6,500 devices in students? hands that did not support remote learning. The District firmly stands by those determinations. In the review of the District?s claim made in August 2022, the Auditor?s Office finds that we did not retain specific enough documentation to meet their interpretations of the compliance supplement which is issued for the purpose of suggesting audit practices. However, the stated program compliance standards are set in the establishing rules and the Code of Federal Regulations (CFR) 47 CFR sections 54.1700 et seq. In addition, The FCC states, ?will not impose any specific metrics or process requirements on those determinations.? The district retained documentation of our rationale of how the devices met the standards of the FCC and provided State Auditor?s Office (SAO) with this information. As such, the district maintains that it met all these requirements. Therefore, we disagree with the Auditor?s position regarding the narrowness of acceptable actions and processes relating to unmet need determinations. SAO also states the district did not retain documentation showing the procurement method used. However, the district did indeed provide the documentation and noted a quote was incorrect by $8,330. This had no impact on the total amount claimed for the program funds. The district has a review process for all purchase orders and reviewed the purchase orders for the claims of the grant. The funding and assistance to meet student needs during the pandemic was essential and necessary in all respects. The District did not take lightly our obligation to follow the established rules and guidance available to us. Based on the information outlined above, we feel strongly that we have fully accomplished that obligation. We have accounted for all our devices and have fulfilled the responsibility of determining the unmet needs of our students. We therefore do not believe that any of the $1.5 million in costs is in question. Auditor?s Remarks The State Auditor?s Office is sympathetic to the significant challenges the District faced during the COVID-19 pandemic, and deeply respects its commitment to student learning despite these challenges. SAO knows that in many cases, governments across Washington received significant pandemic-era federal funds without also receiving clear guidance on how to use them. Then, and now, SAO continues to advocate for clear, timely guidance from federal agencies to make sure Washington governments are not put in a difficult position at audit time. However, when auditing federal programs of any kind, governments must provide documentation to substantiate that they met the award requirements. As is our practice and audit standards require, we will review the status of this finding during our next audit. We value our partnership with the District in striving for transparency in public service. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 47 CFR Part 54, Universal Service, Subpart Q, Emergency Connectivity Fund, describes the ECF Program requirements.