Prosser School District No. 116
September 1, 2022 through August 31, 2023
2023-001 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: N/A
Pass-through Entity Name: N/A
Pass-through Award/Contract
Number:
N/A
Known Questioned Cost Amount: $548,980
Prior Year Audit Finding: Yes, Finding 2022-001
Description of Condition
Allowable activities and costs/restricted purpose – unmet need
The District estimated unmet need for eligible equipment and services 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
and school staff with a documented unmet need. Specifically, the District purchased
laptops and Wi-Fi hotspots, based on its estimate of unmet need, and it requested
reimbursement for these purchases totaling $548,980. However, the District did not
maintain documentation showing it provided each laptop and Wi-Fi hotspot paid
with program funds to a student or employee with unmet need.
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 per user.
We consider these deficiencies in internal controls to be material weaknesses that
led to material noncompliance.
Cause of Condition
Allowable activities and costs/restricted purpose – unmet need
Although employees in the District’s Finance Department knew that another
department received an ECF Program award, they said they did not know the
program was federally funded and, therefore, were unaware of all its regulations.
Further, staff did not know about the requirement to request reimbursement only
for actual unmet need and thought the estimate that the District provided during the
application process was sufficient to comply with this requirement. Additionally,
the staff responsible for distributing the laptops to students did not know about the
unmet need requirement.
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.
Also, the District had distributed laptops and Wi-Fi hotspots for student and school
staff and requested reimbursement before the prior audit issues were identified.
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 staffs’ 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 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.
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 per user.
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
• Monitor to confirm it provides no more than one device per student and
employee, in compliance with the ECF Program’s requirements
District’s Response
The Prosser School District does not concur with the audit finding being issued by
the State Auditor’s Office. The District was acutely aware of the requirement for
the Emergency Connectivity Fund to be used to fill an “unmet need” to keep
students engaged and continue their learning progression during the COVID-19
pandemic, which presented unique and challenging circumstances that had to be
addressed immediately.
During a meeting with State Auditor’s Office, the District indicated that their
interpretation of “unmet need” did not deviate from their ECF initial application.
Therefore, if “unmet need” was established at the time of the grant application, it
should be reasonably assumed that if reimbursement was only requested for that
same interpretation of “unmet need”, it would be an allowable cost.
Per the Federal Communications Commission Order FCC-CIRC21-93-043021,
question 77: “We think schools are in the best position to determine whether their tudents 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 a pandemic. We, therefore, will not impose any specific metrics or process
requirements on those determinations.” And from question 53: “. . . we are
sensitive to the need to provide some flexibility during this uncertain time. If those
connected devices were purchased for the purpose of providing students . . . with
devices for off-campus use consistent with the rules we adopt today, we will not
prohibit such on-campus use.”
The SAO’s definition of “unmet need”, as referenced in the “Background” section
of this report, further clarifies that “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”. The District took reasonable measures to gauge
the “need” from the students and staff prior to the initial and subsequent ECF
funding requests. Given the smaller size of District and surrounding community,
with a Technology Department averaging 2.5 FTE during this time, it was easy for
the Program Coordinator to keep a pulse on the overall need of the District. The
need being that all students and staff had access to “connected devices and
broadband connections sufficient to engage in remote learning.”
The initial priority was to get one device in each home (regardless of the number
of students), then to get one device for each student, which took multiple funding
cycles to achieve. Even if a student had a personal device, the District justified
unmet need due to the fact that personal devices could not be managed by the
district (tech support, security measures, etc.) which would have further hindered
the student/ teachers’ abilities to sufficiently engage in remote learning. Although
the District did not mandate a 1:1 Chromebook initiative, students were expected
to utilize their Chromebooks and were never given the opportunity to check out a
secondary device. Unfortunately, the software system widely used for checking out
Chromebooks is limited to current data, which prevented the District from
providing historical data to prove the compliance with the FCC guidelines.
It is important to note that the expectation to maintain historical software data,
rather than dynamic software data, was not addressed by the State Auditor’s Office
until the end of the 2022-2023 school year and was not an initial requirement of
the EFC program. Therefore, the audit conducted for the 2022-2023 school year
will likely end in a similar audit finding.
It should also be noted that due to District turnover, the staff within the Finance
Department, who were questioned about the Emergency Connectivity Funding
(ECF) Program, were not responsible for submitting the reimbursement claim, nor
tracking the “unmet need” requirement during this audit period and therefore, should not be reflected in the finding. Further, the staff who may not have
understood the ECF funding type during the specific audit cycle are knowledgeable
about both state and federal funding and will take the appropriate steps to ensure
future grant submissions, reporting, and funding requests are handled in
accordance with the associated funding source. Lastly, the statement that staff who
were distributing the devices did not know about the unmet need requirement, may
be partially true, only in the fact that they did not know they needed to document
the unmet need at the time of distribution. If ECF is utilized for the distribution of
future devices or services, the District will ensure to add questions for the students
and staff to justify the need for such device/s prior to distribution.
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.
Prosser School District No. 116
September 1, 2022 through August 31, 2023
2023-001 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: N/A
Pass-through Entity Name: N/A
Pass-through Award/Contract
Number:
N/A
Known Questioned Cost Amount: $548,980
Prior Year Audit Finding: Yes, Finding 2022-001
Description of Condition
Allowable activities and costs/restricted purpose – unmet need
The District estimated unmet need for eligible equipment and services 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
and school staff with a documented unmet need. Specifically, the District purchased
laptops and Wi-Fi hotspots, based on its estimate of unmet need, and it requested
reimbursement for these purchases totaling $548,980. However, the District did not
maintain documentation showing it provided each laptop and Wi-Fi hotspot paid
with program funds to a student or employee with unmet need.
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 per user.
We consider these deficiencies in internal controls to be material weaknesses that
led to material noncompliance.
Cause of Condition
Allowable activities and costs/restricted purpose – unmet need
Although employees in the District’s Finance Department knew that another
department received an ECF Program award, they said they did not know the
program was federally funded and, therefore, were unaware of all its regulations.
Further, staff did not know about the requirement to request reimbursement only
for actual unmet need and thought the estimate that the District provided during the
application process was sufficient to comply with this requirement. Additionally,
the staff responsible for distributing the laptops to students did not know about the
unmet need requirement.
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.
Also, the District had distributed laptops and Wi-Fi hotspots for student and school
staff and requested reimbursement before the prior audit issues were identified.
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 staffs’ 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 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.
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 per user.
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
• Monitor to confirm it provides no more than one device per student and
employee, in compliance with the ECF Program’s requirements
District’s Response
The Prosser School District does not concur with the audit finding being issued by
the State Auditor’s Office. The District was acutely aware of the requirement for
the Emergency Connectivity Fund to be used to fill an “unmet need” to keep
students engaged and continue their learning progression during the COVID-19
pandemic, which presented unique and challenging circumstances that had to be
addressed immediately.
During a meeting with State Auditor’s Office, the District indicated that their
interpretation of “unmet need” did not deviate from their ECF initial application.
Therefore, if “unmet need” was established at the time of the grant application, it
should be reasonably assumed that if reimbursement was only requested for that
same interpretation of “unmet need”, it would be an allowable cost.
Per the Federal Communications Commission Order FCC-CIRC21-93-043021,
question 77: “We think schools are in the best position to determine whether their tudents 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 a pandemic. We, therefore, will not impose any specific metrics or process
requirements on those determinations.” And from question 53: “. . . we are
sensitive to the need to provide some flexibility during this uncertain time. If those
connected devices were purchased for the purpose of providing students . . . with
devices for off-campus use consistent with the rules we adopt today, we will not
prohibit such on-campus use.”
The SAO’s definition of “unmet need”, as referenced in the “Background” section
of this report, further clarifies that “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”. The District took reasonable measures to gauge
the “need” from the students and staff prior to the initial and subsequent ECF
funding requests. Given the smaller size of District and surrounding community,
with a Technology Department averaging 2.5 FTE during this time, it was easy for
the Program Coordinator to keep a pulse on the overall need of the District. The
need being that all students and staff had access to “connected devices and
broadband connections sufficient to engage in remote learning.”
The initial priority was to get one device in each home (regardless of the number
of students), then to get one device for each student, which took multiple funding
cycles to achieve. Even if a student had a personal device, the District justified
unmet need due to the fact that personal devices could not be managed by the
district (tech support, security measures, etc.) which would have further hindered
the student/ teachers’ abilities to sufficiently engage in remote learning. Although
the District did not mandate a 1:1 Chromebook initiative, students were expected
to utilize their Chromebooks and were never given the opportunity to check out a
secondary device. Unfortunately, the software system widely used for checking out
Chromebooks is limited to current data, which prevented the District from
providing historical data to prove the compliance with the FCC guidelines.
It is important to note that the expectation to maintain historical software data,
rather than dynamic software data, was not addressed by the State Auditor’s Office
until the end of the 2022-2023 school year and was not an initial requirement of
the EFC program. Therefore, the audit conducted for the 2022-2023 school year
will likely end in a similar audit finding.
It should also be noted that due to District turnover, the staff within the Finance
Department, who were questioned about the Emergency Connectivity Funding
(ECF) Program, were not responsible for submitting the reimbursement claim, nor
tracking the “unmet need” requirement during this audit period and therefore, should not be reflected in the finding. Further, the staff who may not have
understood the ECF funding type during the specific audit cycle are knowledgeable
about both state and federal funding and will take the appropriate steps to ensure
future grant submissions, reporting, and funding requests are handled in
accordance with the associated funding source. Lastly, the statement that staff who
were distributing the devices did not know about the unmet need requirement, may
be partially true, only in the fact that they did not know they needed to document
the unmet need at the time of distribution. If ECF is utilized for the distribution of
future devices or services, the District will ensure to add questions for the students
and staff to justify the need for such device/s prior to distribution.
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.