2023-002 The District did not have adequate internal controls for ensuring compliance with allowable activities and costs, and restricted purpose requirements.
Assistance Listing Number and Title: 32.009, COVID-19 Emergency Connectivity Fund Program
Federal Grantor Name: Federal Communications Commission
Federal Award/Contract Number: ECF202204286
Pass-through Entity Name: N/A
Pass-through Award/Contract Number: N/A
Known Questioned Cost Amount: $2,188,153
Prior Year Audit Finding: Yes, Finding 2022-002
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 2023, the District spent $2,188,153 in ECF Program funds to purchase laptops for students.
Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls.
Allowable activities and costs
ECF Program recipients may only seek reimbursement for eligible devices and services provided to students and staff with unmet need. Recipients are prohibited from seeking reimbursement for eligible equipment and services used solely at the school or held for future use (in other words, warehousing).
Restricted purpose – unmet need
When submitting applications to the Federal Communications Commission (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.
Description of Condition
Allowable activities and costs/restricted purpose – unmet need
The District estimated the 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 documented the determination of actual unmet need and only requested reimbursement for equipment provided to students. Specifically, the District purchased 5,359 laptops based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $2,188,153. However, the District did not maintain documentation showing it provided each laptop paid with program funds to a student with unmet need. In addition, the District held 553 of the 5,359 laptops for future use.
Cause of Condition
Allowable activities and costs/restricted purpose – unmet need
As communicated in the prior audit finding, the District staff thought the determination of unmet need provided during the application process was sufficient to comply with this requirement. Since the funding spanned two fiscal years, the District had already requested reimbursement before the prior audit identified this issue. The District did not take any additional action and is waiting for audit resolution from the federal grantor.
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 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’ actual unmet need means that all 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 Office of the Washington State Auditor 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.
Recommendation
We recommend the District work with the awarding 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 with unmet need and maintain documentation demonstrating compliance.
District’s Response
Marysville School District does not concur with the audit finding being issued by the State Auditors’ Office. The funds granted by the Federal Communications Commission in the midst of the COVID-19 pandemic were for Emergency Connectivity to ensure students and staff had access to devices sufficient for remote learning. A component of the funding is to only 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 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 in the midst of the pandemic. We, therefore, will not impose any specific metrics or process requirements on those determinations”.
Due to the complexities of providing a sufficient education that includes aspects of remote education, the District determined that only District issued devices with preloaded applications and security was sufficient to facilitate remote activities. Since the Marysville School District did not have enough devices for students and staff that would need them for remote learning, the “unmet need” is obvious.
Marysville School District determined that it was necessary for all students, teachers, and paraeducators to have a district issued device in order to meet the increased challenges of providing safe and equitable access to education to all students during an ongoing pandemic and state of emergency. Remote learning required district students/staff to use district devices for various reasons including:
• Instruction: access to curriculum, supplemental resources, and required software through district licenses.
• Support: the ability for technology staff to provide direct technical support through remote access.
• State Requirements: meeting state testing requirements, such as SBA which cannot be completed on a personal device.
• Safety and Security: implementing web filtering to ensure safe browsing, content monitoring for timely student and staff intervention and support and gave districts the ability to automatically authenticate student accounts to further prevent Zoom bombings.
• Equity: ensuring every student had the same level of access and provided access to accessibility tools not available on personal devices.
Before the pandemic, our district's student and staff laptops were not prepped for at-home learning scenarios and thousands were aging out of their life cycle. Recognizing the unpredictable nature of the pandemic and the potential for a sudden shift back to remote learning at any time, transitioning to a one-to-one student to district issued device ratio was determined to be a critical unmet need in the Marysville School District. In addition, to maintain equitable access to education, devices that were not individually assigned were prepared and available for immediate distribution for the following: if a device were broken and needed replacing or if a student forgot their district device at home or if a rapid return to remote learning was required.
We appreciate the funding and assistance to meet our student needs in the midst of the pandemic and we do 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 $2,188,153 in costs is in question and do not concur with the issued audit finding.
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. The State Auditor’s Office 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, the State Auditor’s Office 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.
2023-002 The District did not have adequate internal controls for ensuring compliance with allowable activities and costs, and restricted purpose requirements.
Assistance Listing Number and Title: 32.009, COVID-19 Emergency Connectivity Fund Program
Federal Grantor Name: Federal Communications Commission
Federal Award/Contract Number: ECF202204286
Pass-through Entity Name: N/A
Pass-through Award/Contract Number: N/A
Known Questioned Cost Amount: $2,188,153
Prior Year Audit Finding: Yes, Finding 2022-002
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 2023, the District spent $2,188,153 in ECF Program funds to purchase laptops for students.
Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls.
Allowable activities and costs
ECF Program recipients may only seek reimbursement for eligible devices and services provided to students and staff with unmet need. Recipients are prohibited from seeking reimbursement for eligible equipment and services used solely at the school or held for future use (in other words, warehousing).
Restricted purpose – unmet need
When submitting applications to the Federal Communications Commission (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.
Description of Condition
Allowable activities and costs/restricted purpose – unmet need
The District estimated the 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 documented the determination of actual unmet need and only requested reimbursement for equipment provided to students. Specifically, the District purchased 5,359 laptops based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $2,188,153. However, the District did not maintain documentation showing it provided each laptop paid with program funds to a student with unmet need. In addition, the District held 553 of the 5,359 laptops for future use.
Cause of Condition
Allowable activities and costs/restricted purpose – unmet need
As communicated in the prior audit finding, the District staff thought the determination of unmet need provided during the application process was sufficient to comply with this requirement. Since the funding spanned two fiscal years, the District had already requested reimbursement before the prior audit identified this issue. The District did not take any additional action and is waiting for audit resolution from the federal grantor.
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 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’ actual unmet need means that all 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 Office of the Washington State Auditor 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.
Recommendation
We recommend the District work with the awarding 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 with unmet need and maintain documentation demonstrating compliance.
District’s Response
Marysville School District does not concur with the audit finding being issued by the State Auditors’ Office. The funds granted by the Federal Communications Commission in the midst of the COVID-19 pandemic were for Emergency Connectivity to ensure students and staff had access to devices sufficient for remote learning. A component of the funding is to only 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 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 in the midst of the pandemic. We, therefore, will not impose any specific metrics or process requirements on those determinations”.
Due to the complexities of providing a sufficient education that includes aspects of remote education, the District determined that only District issued devices with preloaded applications and security was sufficient to facilitate remote activities. Since the Marysville School District did not have enough devices for students and staff that would need them for remote learning, the “unmet need” is obvious.
Marysville School District determined that it was necessary for all students, teachers, and paraeducators to have a district issued device in order to meet the increased challenges of providing safe and equitable access to education to all students during an ongoing pandemic and state of emergency. Remote learning required district students/staff to use district devices for various reasons including:
• Instruction: access to curriculum, supplemental resources, and required software through district licenses.
• Support: the ability for technology staff to provide direct technical support through remote access.
• State Requirements: meeting state testing requirements, such as SBA which cannot be completed on a personal device.
• Safety and Security: implementing web filtering to ensure safe browsing, content monitoring for timely student and staff intervention and support and gave districts the ability to automatically authenticate student accounts to further prevent Zoom bombings.
• Equity: ensuring every student had the same level of access and provided access to accessibility tools not available on personal devices.
Before the pandemic, our district's student and staff laptops were not prepped for at-home learning scenarios and thousands were aging out of their life cycle. Recognizing the unpredictable nature of the pandemic and the potential for a sudden shift back to remote learning at any time, transitioning to a one-to-one student to district issued device ratio was determined to be a critical unmet need in the Marysville School District. In addition, to maintain equitable access to education, devices that were not individually assigned were prepared and available for immediate distribution for the following: if a device were broken and needed replacing or if a student forgot their district device at home or if a rapid return to remote learning was required.
We appreciate the funding and assistance to meet our student needs in the midst of the pandemic and we do 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 $2,188,153 in costs is in question and do not concur with the issued audit finding.
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. The State Auditor’s Office 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, the State Auditor’s Office 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.