Audit 398262

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: 2025 Criteria: 20 U.S.C. Code 7703 – Payments for Eligible Federally Connected Children (a)Computation of payment (1)In general For the purpose of computing the amount that a local educational agency is eligible to receive under subsection (b) or (d) for any fiscal year, the Secretary shall determine the number of children who were in average daily attendance in the schools of such agency, and for whom such agency provided free public education, during the preceding school year and who, while in attendance at such schools— (A) (i) resided on Federal property with a parent employed on Federal property situated in whole or in part within the boundaries of the school district of such agency; or (ii) resided on Federal property with a parent who is an official of, and accredited by, a foreign government and is a foreign military officer; (B) resided on Federal property and had a parent on active duty in the uniformed services (as defined in section 101 of title 37); (C) resided on Indian lands; Impact Aid Regulations 34 CFR § 222.35 How does a local educational agency count the membership of its federally connected children? An applicant counts the membership of its federally connected children using one of the following methods: (a) Parent-pupil survey. An applicant may conduct a parent-pupil survey to count the membership of its federally connected children, which must be counted as of the survey date. (b) Source check. A source check is a type of survey tool that groups children being claimed on the Impact Aid application by Federal property. This form is used in lieu of the parent-pupil survey form to substantiate a pupil’s place of residence or parent’s place of employment on the survey date. (1) The source check must include sufficient information to determine the eligibility of the Federal property and the individual children claimed on the form. (2) A source check may also include: (iv) Certification by the Bureau of Indian Affairs (BIA) or authorized tribal official regarding the eligibility of Indian lands. Condition: During our review of information provided in the Impact Aid application, we identified the following issue:  Bloomfield Municipal Schools could not locate any of their source check certifications obtained from the Navajo Tribal Chapter Houses for the 2024-2025 application. Questioned Costs: Unknown. Bloomfield Municipal Schools has used tribal source checks for its Impact Aid application for years, and those source checks have been proper in previous years and exist for the subsequent application. However, they could not be produced for this year’s testing. They existed when the application was completed and are in line with the previous and subsequent year’s applications. Funds are owed to the District for these students, but how the Department of Education would penalize the school for the missing source checks cannot be determined. Cause: The District’s Federal Programs Director retired in December 2024 and was replaced by another individual. When the audit was begun and the Impact Aid program was selected for testing, the new Federal Program’s Director was unable to find any of the source checks from the Chapter officials. Listings of the students could be found, but the actual source checks could not be found, the hard copies nor any electronic copies of those source checks. When the previous Federal Programs Director was contacted for help in finding where the documents had been stored or where there were electronic copies of the documents, they did not receive help. The individual told them they just weren’t looking hard enough but would not volunteer to come help the District. As such, the District was unable to provide supporting documentation for the student counts. Effect: Without the Tribal source checks, we are unable to perform testing for the following testing components of the program:  L. Reporting – Special Reporting. Testing of the application student count cannot occur as none of the students now have a source check verification for them, either for total student count nor the special education student count. Auditor’s Recommendation: We recommend that the District ensure that more than one copy of critical data be maintained which would prevent the single source of support for grant funding to be eliminated by an accident or through intentional means. Copies of the source checks should be made and kept for safe keeping by more than one person. The two individuals or departments maintaining the data should not have access to the other’s data, so that data could not be destroyed, accidentally or intentionally, by one individual. Responsible official’s view:  Specific corrective action plan for the finding: Required supporting documents for Impact Aid application will be safeguarded in the Federal Programs office and a copy will be provided to the Finance office. Federal Programs will continue to attend trainings for Impact Aid to stay abreast of critical updates for this program.  Timeline for completion of corrective action plan: April 15, 2026  Employee positions(s) responsible for meeting the timeline: Federal Programs Director