Audit 345751

Federal Program Information: Funding Agency: U.S. Department of Education Title: Impact Aid (Title VII of ESEA) FAL Number: 84.041 Passthrough: N/A Award Year: 2024 Criteria: Title 34 Subtitle B Chapter III Part 300 Section 300.202 Use of Amounts (a) General. Amounts provided to the LEA under Part B of the Act— (1) Must be expended in accordance with the applicable provisions of this part; (2) Must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with paragraph (b) of this section; and (3) Must be used to supplement State, local, and other Federal funds and not to supplant those funds. Condition: During our review of information provided in the Impact Aid application we identified the following issue:  The District used Impact Aid special education funds to pay 85% of the salary of the District Safety Coordinator through mid-December 2023 after which it was changed to 15% of the salary from the special education funds.  There was no justification in the files reviewed that identified why the individual’s responsibilities related to special education funding. Questioned Costs: $70,265 – The questioned costs are calculated as the entire salary of the employee paid from special education funds ($56,213) plus a 25% load for benefits. We did not identify any other employees who did not have a legitimate reason for being charged to Impact Aid funds. Cause: The District did not ensure the funds expended were related to special education. Effect: The District is not in compliance with Federal regulations related to internal control procedures and compliance requirements in relation to the grant and could put funding in jeopardy or require the District to reimburse the program. Auditor’s Recommendation: We recommend that the District establish policies which require proper review and approval from department heads for expenditures of funds on salaries. This process will ensure that any program directors are fully aware of any funds being spent and can verify if those are appropriate expenditures from the particular Federal funds. Additionally, we recommend that documentation be put in files to demonstrate why a reason was made for coverage of salaries in a Federal program when there may be questions as to why this was justified. Responsible official’s view: ● Specific corrective action plan for the finding: The Special Education Department will review expenditures to determine allowable criteria are met during the requisition review process. The salary funding source was changed July 1, 2024 and is no longer charged to Impact Aid. ● Timeline for completion of corrective action plan: July 1, 2024 ● Employee positions(s) responsible for meeting the timeline: Special Ed. Director, Special Ed. Coordinator, Special Ed. Specialist, Finance Director

Federal Program Information: Funding Agency: U.S. Department of Education Title: Impact Aid (Title VII of ESEA) FAL Number: 84.041 Passthrough: N/A Award Year: 2024 Criteria: Per the Compliance Supplement – Application for Impact Aid – Section 7003 (OMB No. 1810-0687) – Each year an LEA must submit this application, which provides the following information: counts of federally connected children in various categories, membership and average daily attendance data, and information on expenditures for children with disabilities. Please note: As a result of the public health emergency related to the coronavirus, the Impact Aid Coronavirus Relief Act (Pub. L. No. 116-211) provides LEAs the option for their fiscal year 2022 7003 application of using the same student count data from their fiscal year 2021 application or providing new student count data as prescribed in Section 7003. Membership and average attendance data should be tested. The auditor should use professional judgment when determining which categories to test, taking into account the relative materiality of the number of children reported in other categories. Condition: During our review of information provided in the Impact Aid application we identified the following issues:  A student who has no record of being in the special education program was listed on the Impact Aid application as a student with disabilities.  Two students who are special education students were left off the application because of a keying error.  One hundred regular education students were left off the application because of a keying error.  The expenditure numbers included on table 7 of the application included numbers that were significantly less than actual numbers for the District. The individual who entered the numbers took the wrong numbers from an expenditure report. Instead of using the numbers from the expenditures to date column, the remaining budget balance numbers were entered into the application. • Number 1 – total additional expenditures of all children with disabilities were underreported by $5,513,453 • Number 4 – Total funds for Part B of Individuals with Disabilities Education Act were underreported by $1,106,288 • Number 5 – Other sources of aid received for children with disabilities were underreported by $435,856. There were errors in the prior year’s application as well, different types of errors, but at this time no progress has been made in this area. Questioned Costs: $0 – The District underreported eligible students on the application and underreported expenditures incurred in the District for Impact Aid students with disabilities. The net effect is a reduction in funds that were available to the District. Even when extrapolating one student out of 40 out of the 549 special education students on the application, this equates to 13.725 students which may be in error. However, two were known to be excluded from the list plus 100 students for regular education. The total funding lost exceeds funds that may have been obtained from the error rate. Cause: There was not good inter-program communication to make sure special education students are properly accounted for on the Impact Aid application. Additionally, there is no secondary review of numbers by another individual to verify that entry or keying errors have not occurred in the application process. Effect: The District is not in compliance with Federal regulations related to internal control procedures and compliance requirements in relation to the grant and. In this case, the District has lost a significant amount of funding with the errors in completing the application. Auditor’s Recommendation: When completing the Impact Aid application, the students included on the special education portion of the application should be reviewed by the special education department to make sure all students are properly accounted for as students may move in or out of the program. Additionally, we recommend that a second person review numbers input to the application to verify correct entry and support for those numbers to ensure that legitimate students counts and expenditure amounts are properly entered. Responsible official’s view: ● Specific corrective action plan for the finding: The departments will implement a review process that will add a second person to verify data that is entered manually. ● Timeline for completion of corrective action plan: June 2025 ● Employee positions(s) responsible for meeting the timeline: Special Education Department, Intercultural & Community Outreach Department, Data Department, Finance Department.

Federal Program Information: Funding Agency: U.S. Department of Education Title: Impact Aid (Title VII of ESEA) FAL Number: 84.041 Passthrough: N/A Award Year: 2024 Criteria: Title 34 Subtitle B Chapter III Part 300 Section 300.202 Use of Amounts (a) General. Amounts provided to the LEA under Part B of the Act— (1) Must be expended in accordance with the applicable provisions of this part; (2) Must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with paragraph (b) of this section; and (3) Must be used to supplement State, local, and other Federal funds and not to supplant those funds. Condition: During our review of information provided in the Impact Aid application we identified the following issue:  The District used Impact Aid special education funds to pay 85% of the salary of the District Safety Coordinator through mid-December 2023 after which it was changed to 15% of the salary from the special education funds.  There was no justification in the files reviewed that identified why the individual’s responsibilities related to special education funding. Questioned Costs: $70,265 – The questioned costs are calculated as the entire salary of the employee paid from special education funds ($56,213) plus a 25% load for benefits. We did not identify any other employees who did not have a legitimate reason for being charged to Impact Aid funds. Cause: The District did not ensure the funds expended were related to special education. Effect: The District is not in compliance with Federal regulations related to internal control procedures and compliance requirements in relation to the grant and could put funding in jeopardy or require the District to reimburse the program. Auditor’s Recommendation: We recommend that the District establish policies which require proper review and approval from department heads for expenditures of funds on salaries. This process will ensure that any program directors are fully aware of any funds being spent and can verify if those are appropriate expenditures from the particular Federal funds. Additionally, we recommend that documentation be put in files to demonstrate why a reason was made for coverage of salaries in a Federal program when there may be questions as to why this was justified. Responsible official’s view: ● Specific corrective action plan for the finding: The Special Education Department will review expenditures to determine allowable criteria are met during the requisition review process. The salary funding source was changed July 1, 2024 and is no longer charged to Impact Aid. ● Timeline for completion of corrective action plan: July 1, 2024 ● Employee positions(s) responsible for meeting the timeline: Special Ed. Director, Special Ed. Coordinator, Special Ed. Specialist, Finance Director

Federal Program Information: Funding Agency: U.S. Department of Education Title: Impact Aid (Title VII of ESEA) FAL Number: 84.041 Passthrough: N/A Award Year: 2024 Criteria: Per the Compliance Supplement – Application for Impact Aid – Section 7003 (OMB No. 1810-0687) – Each year an LEA must submit this application, which provides the following information: counts of federally connected children in various categories, membership and average daily attendance data, and information on expenditures for children with disabilities. Please note: As a result of the public health emergency related to the coronavirus, the Impact Aid Coronavirus Relief Act (Pub. L. No. 116-211) provides LEAs the option for their fiscal year 2022 7003 application of using the same student count data from their fiscal year 2021 application or providing new student count data as prescribed in Section 7003. Membership and average attendance data should be tested. The auditor should use professional judgment when determining which categories to test, taking into account the relative materiality of the number of children reported in other categories. Condition: During our review of information provided in the Impact Aid application we identified the following issues:  A student who has no record of being in the special education program was listed on the Impact Aid application as a student with disabilities.  Two students who are special education students were left off the application because of a keying error.  One hundred regular education students were left off the application because of a keying error.  The expenditure numbers included on table 7 of the application included numbers that were significantly less than actual numbers for the District. The individual who entered the numbers took the wrong numbers from an expenditure report. Instead of using the numbers from the expenditures to date column, the remaining budget balance numbers were entered into the application. • Number 1 – total additional expenditures of all children with disabilities were underreported by $5,513,453 • Number 4 – Total funds for Part B of Individuals with Disabilities Education Act were underreported by $1,106,288 • Number 5 – Other sources of aid received for children with disabilities were underreported by $435,856. There were errors in the prior year’s application as well, different types of errors, but at this time no progress has been made in this area. Questioned Costs: $0 – The District underreported eligible students on the application and underreported expenditures incurred in the District for Impact Aid students with disabilities. The net effect is a reduction in funds that were available to the District. Even when extrapolating one student out of 40 out of the 549 special education students on the application, this equates to 13.725 students which may be in error. However, two were known to be excluded from the list plus 100 students for regular education. The total funding lost exceeds funds that may have been obtained from the error rate. Cause: There was not good inter-program communication to make sure special education students are properly accounted for on the Impact Aid application. Additionally, there is no secondary review of numbers by another individual to verify that entry or keying errors have not occurred in the application process. Effect: The District is not in compliance with Federal regulations related to internal control procedures and compliance requirements in relation to the grant and. In this case, the District has lost a significant amount of funding with the errors in completing the application. Auditor’s Recommendation: When completing the Impact Aid application, the students included on the special education portion of the application should be reviewed by the special education department to make sure all students are properly accounted for as students may move in or out of the program. Additionally, we recommend that a second person review numbers input to the application to verify correct entry and support for those numbers to ensure that legitimate students counts and expenditure amounts are properly entered. Responsible official’s view: ● Specific corrective action plan for the finding: The departments will implement a review process that will add a second person to verify data that is entered manually. ● Timeline for completion of corrective action plan: June 2025 ● Employee positions(s) responsible for meeting the timeline: Special Education Department, Intercultural & Community Outreach Department, Data Department, Finance Department.