Audit 357060

2024-001 The District did not have adequate internal controls and did not comply with federal Title I eligibility requirements. Assistance Listing Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: GT-01442 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objective of the Title I program is to improve the teaching and learning of children who are at risk of not meeting state academic standards who reside in areas with high concentrations of children from low-income families. During the 2023- 2024 school year, the District spent $753,049 in Title I program funds. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Title I requires participating districts to allocate more funds to schools with higher poverty percentages. Districts must rank schools from highest to lowest poverty concentrations based on the total number of students from low-income families attending the school or residing in the area. Furthermore, the District must ensure schools with the highest poverty concentrations receive the most funding per enrolled student. The rankings are included in the Title I application, and districts must maintain documentation supporting their rankings. Description of Condition The District’s internal controls were inadequate for ensuring compliance with eligibility requirements. When the District allocated funding between schools within the same grade span, it only checked that the school with the highest poverty concentration received the most funds. It did not ensure the allocation was adjusted to ensure the per-pupil expenditure (PPE) was higher for the school with the higher poverty concentration, as required. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition Staff responsible for allocating funding misunderstood guidance and believed allocating a higher amount in total to the school with the highest poverty concentration met requirements. Staff did not know about the requirement to also ensure schools with a higher poverty concentration receive an allocation that ensures a higher PPE than schools with a lower poverty concentration. Effect of Condition Because the District allocated Title I funds incorrectly, the amount of services provided at schools with higher percentages of low-income students might have been unfairly limited. The District did not comply with eligibility requirements and did not correctly allocate Title I funds from the highest to lowest poverty elementary school buildings, as federal regulations require. For the two schools within this grade-span, the lower poverty school received $210 more per-pupil than the school with the higher poverty level. Recommendation We recommend the District strengthen internal controls and perform additional research when necessary to ensure staff understand program guidance and confirm it is complete and accurate before ranking and allocating Title I funding to school buildings. District’s Response The district is strengthening its internal controls for monitoring the Per Pupil Expenditure (PPE) to match higher poverty concentration in its schools by the following: 1. Developing and utilizing an Excel Spreadsheet as a “PPE Tool” to allocate funds appropriately a. The PPE Tool will be a shared working document between the Business Office, Human Resources, and Title I Coordinator, b. The PPE Tool will be utilized when applying for the 2025-2026 Consolidated Grant and all future Consolidated Grant applications; and, c. The PPE Tool will be used when completing budgetary reviews at cabinet meetings. These measures will be implemented going forward as internal controls for ensuring compliance with eligibility requirements for Title I funding. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. 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 34 CFR, Part 200, Title I – Improving the Academic Achievement of the Disadvantaged, Section 78 – Allocation of funds to school attendance areas and schools

2024-001 The District did not have adequate internal controls and did not comply with federal Title I eligibility requirements. Assistance Listing Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: GT-01442 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objective of the Title I program is to improve the teaching and learning of children who are at risk of not meeting state academic standards who reside in areas with high concentrations of children from low-income families. During the 2023- 2024 school year, the District spent $753,049 in Title I program funds. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Title I requires participating districts to allocate more funds to schools with higher poverty percentages. Districts must rank schools from highest to lowest poverty concentrations based on the total number of students from low-income families attending the school or residing in the area. Furthermore, the District must ensure schools with the highest poverty concentrations receive the most funding per enrolled student. The rankings are included in the Title I application, and districts must maintain documentation supporting their rankings. Description of Condition The District’s internal controls were inadequate for ensuring compliance with eligibility requirements. When the District allocated funding between schools within the same grade span, it only checked that the school with the highest poverty concentration received the most funds. It did not ensure the allocation was adjusted to ensure the per-pupil expenditure (PPE) was higher for the school with the higher poverty concentration, as required. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition Staff responsible for allocating funding misunderstood guidance and believed allocating a higher amount in total to the school with the highest poverty concentration met requirements. Staff did not know about the requirement to also ensure schools with a higher poverty concentration receive an allocation that ensures a higher PPE than schools with a lower poverty concentration. Effect of Condition Because the District allocated Title I funds incorrectly, the amount of services provided at schools with higher percentages of low-income students might have been unfairly limited. The District did not comply with eligibility requirements and did not correctly allocate Title I funds from the highest to lowest poverty elementary school buildings, as federal regulations require. For the two schools within this grade-span, the lower poverty school received $210 more per-pupil than the school with the higher poverty level. Recommendation We recommend the District strengthen internal controls and perform additional research when necessary to ensure staff understand program guidance and confirm it is complete and accurate before ranking and allocating Title I funding to school buildings. District’s Response The district is strengthening its internal controls for monitoring the Per Pupil Expenditure (PPE) to match higher poverty concentration in its schools by the following: 1. Developing and utilizing an Excel Spreadsheet as a “PPE Tool” to allocate funds appropriately a. The PPE Tool will be a shared working document between the Business Office, Human Resources, and Title I Coordinator, b. The PPE Tool will be utilized when applying for the 2025-2026 Consolidated Grant and all future Consolidated Grant applications; and, c. The PPE Tool will be used when completing budgetary reviews at cabinet meetings. These measures will be implemented going forward as internal controls for ensuring compliance with eligibility requirements for Title I funding. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. 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 34 CFR, Part 200, Title I – Improving the Academic Achievement of the Disadvantaged, Section 78 – Allocation of funds to school attendance areas and schools