Audit 291776

2023-001 – Education Stabilization Fund (ESF) Reporting: 30000 Elementary and Secondary School Emergency Relief II (ESSER II) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund: Learning Loss Expanded Learning Opportunities (ELO) Grant GEER II Expanded Learning Opportunities (ELO) Grant: ESSER III: State Reserve, Learning Loss Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund (ESF) FAL Number: 84.425 Pass-Through Agency: California Department of Education Pass-Through Number: 15547, 15559, 10155, 15619, 15620, 15621 Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Reporting Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the Center reported the full allocation of ESF funds for the year ended June 30, 2022, rather than the expenditure incurred during the year. Context: While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2022 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Effect: Over-reporting of $1,010,606 in expenditures over actual expenditures for 4 of the ESSER program annual performance reports. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Repeat Finding: Not a repeat finding. Recommendation: We recommend the Center design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan: The Center became aware of a discrepancy between the annual ESSER financial reporting and the quarterly reports during the audit. While the quarterly reports to the CDE were accurately reported and expenditures accurately recorded, the annual performance report was created manually, and reported full allocations per fund, in error during 2023 by the Center’s back-office service providers without review from Center’s management. Upon the Center’s communication with the CDE, the CDE has notified that “according to the U.S. Department of Education for ESSER Annual Reporting, there will be an opportunity to correct the Year 3 report that was submitted in March of 2023. The U.S. Department of Education requires that we submit Year 4 data to them first. This data will be collected in March of 2024. At that time, the LEA should report to the best of their ability, based on the previously reported expenditures. Depending on the previous amount reported, this may mean the LEA is not yet able to fully report applicable expenditures. This will be corrected later. Following the initial Year 4 submission, the U.S. Department of Education will allow for a Year 3 correction period. At this time, the LEA will be able to correct the Year 3 report. Finally, there will be a Year 4 correction period. This correction period will be based on any changes reported during the Year 3 correction period, to allow for a final true up of Year 4 reporting based on actual expenditures.” Therefore, the correction will be made in March of 2024. In the future, the Center’s back-office service providers will be utilizing a stricter rule for cross-checking reports, and will send reports (quarterly and annual) to the Center for a third review before submitting. The Center will also make the correction in March of 2024 per the CDE’s and U.S. Department of Education direction.

2023-001 – Education Stabilization Fund (ESF) Reporting: 30000 Elementary and Secondary School Emergency Relief II (ESSER II) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund: Learning Loss Expanded Learning Opportunities (ELO) Grant GEER II Expanded Learning Opportunities (ELO) Grant: ESSER III: State Reserve, Learning Loss Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund (ESF) FAL Number: 84.425 Pass-Through Agency: California Department of Education Pass-Through Number: 15547, 15559, 10155, 15619, 15620, 15621 Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Reporting Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the Center reported the full allocation of ESF funds for the year ended June 30, 2022, rather than the expenditure incurred during the year. Context: While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2022 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Effect: Over-reporting of $1,010,606 in expenditures over actual expenditures for 4 of the ESSER program annual performance reports. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Repeat Finding: Not a repeat finding. Recommendation: We recommend the Center design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan: The Center became aware of a discrepancy between the annual ESSER financial reporting and the quarterly reports during the audit. While the quarterly reports to the CDE were accurately reported and expenditures accurately recorded, the annual performance report was created manually, and reported full allocations per fund, in error during 2023 by the Center’s back-office service providers without review from Center’s management. Upon the Center’s communication with the CDE, the CDE has notified that “according to the U.S. Department of Education for ESSER Annual Reporting, there will be an opportunity to correct the Year 3 report that was submitted in March of 2023. The U.S. Department of Education requires that we submit Year 4 data to them first. This data will be collected in March of 2024. At that time, the LEA should report to the best of their ability, based on the previously reported expenditures. Depending on the previous amount reported, this may mean the LEA is not yet able to fully report applicable expenditures. This will be corrected later. Following the initial Year 4 submission, the U.S. Department of Education will allow for a Year 3 correction period. At this time, the LEA will be able to correct the Year 3 report. Finally, there will be a Year 4 correction period. This correction period will be based on any changes reported during the Year 3 correction period, to allow for a final true up of Year 4 reporting based on actual expenditures.” Therefore, the correction will be made in March of 2024. In the future, the Center’s back-office service providers will be utilizing a stricter rule for cross-checking reports, and will send reports (quarterly and annual) to the Center for a third review before submitting. The Center will also make the correction in March of 2024 per the CDE’s and U.S. Department of Education direction.

2023-001 – Education Stabilization Fund (ESF) Reporting: 30000 Elementary and Secondary School Emergency Relief II (ESSER II) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund: Learning Loss Expanded Learning Opportunities (ELO) Grant GEER II Expanded Learning Opportunities (ELO) Grant: ESSER III: State Reserve, Learning Loss Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund (ESF) FAL Number: 84.425 Pass-Through Agency: California Department of Education Pass-Through Number: 15547, 15559, 10155, 15619, 15620, 15621 Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Reporting Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the Center reported the full allocation of ESF funds for the year ended June 30, 2022, rather than the expenditure incurred during the year. Context: While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2022 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Effect: Over-reporting of $1,010,606 in expenditures over actual expenditures for 4 of the ESSER program annual performance reports. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Repeat Finding: Not a repeat finding. Recommendation: We recommend the Center design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan: The Center became aware of a discrepancy between the annual ESSER financial reporting and the quarterly reports during the audit. While the quarterly reports to the CDE were accurately reported and expenditures accurately recorded, the annual performance report was created manually, and reported full allocations per fund, in error during 2023 by the Center’s back-office service providers without review from Center’s management. Upon the Center’s communication with the CDE, the CDE has notified that “according to the U.S. Department of Education for ESSER Annual Reporting, there will be an opportunity to correct the Year 3 report that was submitted in March of 2023. The U.S. Department of Education requires that we submit Year 4 data to them first. This data will be collected in March of 2024. At that time, the LEA should report to the best of their ability, based on the previously reported expenditures. Depending on the previous amount reported, this may mean the LEA is not yet able to fully report applicable expenditures. This will be corrected later. Following the initial Year 4 submission, the U.S. Department of Education will allow for a Year 3 correction period. At this time, the LEA will be able to correct the Year 3 report. Finally, there will be a Year 4 correction period. This correction period will be based on any changes reported during the Year 3 correction period, to allow for a final true up of Year 4 reporting based on actual expenditures.” Therefore, the correction will be made in March of 2024. In the future, the Center’s back-office service providers will be utilizing a stricter rule for cross-checking reports, and will send reports (quarterly and annual) to the Center for a third review before submitting. The Center will also make the correction in March of 2024 per the CDE’s and U.S. Department of Education direction.

2023-001 – Education Stabilization Fund (ESF) Reporting: 30000 Elementary and Secondary School Emergency Relief II (ESSER II) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund: Learning Loss Expanded Learning Opportunities (ELO) Grant GEER II Expanded Learning Opportunities (ELO) Grant: ESSER III: State Reserve, Learning Loss Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund (ESF) FAL Number: 84.425 Pass-Through Agency: California Department of Education Pass-Through Number: 15547, 15559, 10155, 15619, 15620, 15621 Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Reporting Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the Center reported the full allocation of ESF funds for the year ended June 30, 2022, rather than the expenditure incurred during the year. Context: While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2022 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Effect: Over-reporting of $1,010,606 in expenditures over actual expenditures for 4 of the ESSER program annual performance reports. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Repeat Finding: Not a repeat finding. Recommendation: We recommend the Center design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan: The Center became aware of a discrepancy between the annual ESSER financial reporting and the quarterly reports during the audit. While the quarterly reports to the CDE were accurately reported and expenditures accurately recorded, the annual performance report was created manually, and reported full allocations per fund, in error during 2023 by the Center’s back-office service providers without review from Center’s management. Upon the Center’s communication with the CDE, the CDE has notified that “according to the U.S. Department of Education for ESSER Annual Reporting, there will be an opportunity to correct the Year 3 report that was submitted in March of 2023. The U.S. Department of Education requires that we submit Year 4 data to them first. This data will be collected in March of 2024. At that time, the LEA should report to the best of their ability, based on the previously reported expenditures. Depending on the previous amount reported, this may mean the LEA is not yet able to fully report applicable expenditures. This will be corrected later. Following the initial Year 4 submission, the U.S. Department of Education will allow for a Year 3 correction period. At this time, the LEA will be able to correct the Year 3 report. Finally, there will be a Year 4 correction period. This correction period will be based on any changes reported during the Year 3 correction period, to allow for a final true up of Year 4 reporting based on actual expenditures.” Therefore, the correction will be made in March of 2024. In the future, the Center’s back-office service providers will be utilizing a stricter rule for cross-checking reports, and will send reports (quarterly and annual) to the Center for a third review before submitting. The Center will also make the correction in March of 2024 per the CDE’s and U.S. Department of Education direction.