The District did not have adequate internal controls for ensuring compliance with allowable activities and costs, and restricted purpose requirements. See Schedule of Findings and Questioned Costs for chart/table. 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 2022, the District spent $2,197,520 in ECF Program funds to purchase laptops for students and school staff. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Allowable activities and costs ECF Program recipients must only seek reimbursement for the eligible devices provided to students and staff with unmet need. Recipients are prohibited from seeking and receiving reimbursement for eligible equipment purchased for use solely at the school or held for future use (i.e., warehousing). Restricted purpose ? unmet need When submitting applications to the 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 provided to students and school staff with actual unmet need. Restricted purpose ? per-user limitations The FCC imposed per-location and per-user limitations to maximize the use of limited funds. Under the program, eligible schools could only be reimbursed for one connected device per student or school employee with unmet need. Description of Condition Allowable activities and costs/restricted purpose ? unmet need The District estimated 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 requested reimbursement only for eligible equipment provided to students and school staff with a documented unmet need. Specifically, the District purchased 5,200 laptops based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $2,197,520. However, the District did not maintain documentation showing it provided each laptop paid with program funds to a student or employee with unmet need. Restricted purpose ? per-user limitations Our audit found the District?s internal controls were ineffective for demonstrating it complied with the FCC?s 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. This issue was not reported as a finding in the prior audit. Cause of Condition Allowable activities and costs/restricted purpose ? unmet need District staff thought the determination of unmet need provided during the application process was sufficient to comply with this requirement. They did not perform additional procedures during the reimbursement process to only request reimbursement for specific students and staff with documented unmet need. Restricted purpose ? per-user limitations Staff did not know the District could not provide more than one device per student and employee and, therefore, did not establish a process to ensure each student or employee would only receive one computer purchased with ECF Program funds. 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 an 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 staff?s 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-user limitations The District provided documentation that included the names of users laptops purchased with ECF Program funds. We reviewed this documentation and identified 51 students who each used multiple laptops paid with ECF Program funds. Because the District provided more than one device per student and employee, and received reimbursement for them, it did not comply with the FCC?s requirement. As noted in the allowable activities and costs section above, we are questioning the costs for these devices. 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 and services 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 Mukilteo 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 Mukilteo School District did not have enough devices for students and staff that would need them for remote learning, the ?unmet need? is obvious. It is important to note how pervasive absences were during the grant period as students were frequently forced into remote learning due to state required exposure quarantines and mandated positive test isolations. During the 2021-22 school year, the District experienced unprecedented absences rates in both students and staff. This means students and staff were often abruptly sent home and required flexibility to adapt to remote learning needs that were evolving daily. Being forced into this unprecedented educational landscape in the midst of a pandemic necessitated an expansive adoption of various degrees of remote learning to accommodate our student?s needs. These complexities unearthed many reasons why district issued devices are the only devices truly sufficient to face the new educational challenges of attempting to provide a free appropriate public education during a global health crisis. These include: access to curriculum and supplemental resources through district licenses, providing access to accessibility tools not available to deploy on personal devices, web filtering of malicious content threatening student accounts off-campus and to meet eRate filtering requirements, content monitoring for timely intervention and support of student?s social and emotional health which was significantly impacted by the pandemic, the ability to automatically authenticate student accounts to further prevent Zoom bombings, the ability to conduct state required testing not allowed on personal devices, and the ability for technology staff to provide direct technical support through remote access. While we were attempting to ensure all of our students had adequate support for learning activities in the midst of a global health crisis, we made these determinations that our students needed our devices and therefore had actual unmet need to justify 5,200 devices. While we ultimately only requested reimbursement for 5,200 devices issued to students and staff, we know there was actually additional unmet need as we had over 5,600 devices in student?s hands that were reaching the end of their useful life and we had over 7,300 students qualifying for free or reduced price lunches. In their review of our determinations made in the Fall of 2021, the Auditor?s Office finds that we did not make determinations that were specific enough to meet their interpretations of the compliance supplement which is issued for the purpose of suggesting audit practices. However, the stated standards for program compliance are set in the establishing rules and the Code of Federal Regulations (CFR) 47 CFR sections 54.1700 et seq. The District maintains that it met all of these requirements. Therefore, in consulting with many other districts who are receiving similar determinations, we disagree with the Auditor?s position regarding the narrowness of acceptable actions and processes relating to unmet need determinations. Each of our devices went to students and staff who needed them. 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 $2,197,520 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. 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.
The District did not have adequate internal controls for ensuring compliance with allowable activities and costs, and restricted purpose requirements. See Schedule of Findings and Questioned Costs for chart/table. 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 2022, the District spent $2,197,520 in ECF Program funds to purchase laptops for students and school staff. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Allowable activities and costs ECF Program recipients must only seek reimbursement for the eligible devices provided to students and staff with unmet need. Recipients are prohibited from seeking and receiving reimbursement for eligible equipment purchased for use solely at the school or held for future use (i.e., warehousing). Restricted purpose ? unmet need When submitting applications to the 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 provided to students and school staff with actual unmet need. Restricted purpose ? per-user limitations The FCC imposed per-location and per-user limitations to maximize the use of limited funds. Under the program, eligible schools could only be reimbursed for one connected device per student or school employee with unmet need. Description of Condition Allowable activities and costs/restricted purpose ? unmet need The District estimated 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 requested reimbursement only for eligible equipment provided to students and school staff with a documented unmet need. Specifically, the District purchased 5,200 laptops based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $2,197,520. However, the District did not maintain documentation showing it provided each laptop paid with program funds to a student or employee with unmet need. Restricted purpose ? per-user limitations Our audit found the District?s internal controls were ineffective for demonstrating it complied with the FCC?s 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. This issue was not reported as a finding in the prior audit. Cause of Condition Allowable activities and costs/restricted purpose ? unmet need District staff thought the determination of unmet need provided during the application process was sufficient to comply with this requirement. They did not perform additional procedures during the reimbursement process to only request reimbursement for specific students and staff with documented unmet need. Restricted purpose ? per-user limitations Staff did not know the District could not provide more than one device per student and employee and, therefore, did not establish a process to ensure each student or employee would only receive one computer purchased with ECF Program funds. 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 an 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 staff?s 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-user limitations The District provided documentation that included the names of users laptops purchased with ECF Program funds. We reviewed this documentation and identified 51 students who each used multiple laptops paid with ECF Program funds. Because the District provided more than one device per student and employee, and received reimbursement for them, it did not comply with the FCC?s requirement. As noted in the allowable activities and costs section above, we are questioning the costs for these devices. 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 and services 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 Mukilteo 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 Mukilteo School District did not have enough devices for students and staff that would need them for remote learning, the ?unmet need? is obvious. It is important to note how pervasive absences were during the grant period as students were frequently forced into remote learning due to state required exposure quarantines and mandated positive test isolations. During the 2021-22 school year, the District experienced unprecedented absences rates in both students and staff. This means students and staff were often abruptly sent home and required flexibility to adapt to remote learning needs that were evolving daily. Being forced into this unprecedented educational landscape in the midst of a pandemic necessitated an expansive adoption of various degrees of remote learning to accommodate our student?s needs. These complexities unearthed many reasons why district issued devices are the only devices truly sufficient to face the new educational challenges of attempting to provide a free appropriate public education during a global health crisis. These include: access to curriculum and supplemental resources through district licenses, providing access to accessibility tools not available to deploy on personal devices, web filtering of malicious content threatening student accounts off-campus and to meet eRate filtering requirements, content monitoring for timely intervention and support of student?s social and emotional health which was significantly impacted by the pandemic, the ability to automatically authenticate student accounts to further prevent Zoom bombings, the ability to conduct state required testing not allowed on personal devices, and the ability for technology staff to provide direct technical support through remote access. While we were attempting to ensure all of our students had adequate support for learning activities in the midst of a global health crisis, we made these determinations that our students needed our devices and therefore had actual unmet need to justify 5,200 devices. While we ultimately only requested reimbursement for 5,200 devices issued to students and staff, we know there was actually additional unmet need as we had over 5,600 devices in student?s hands that were reaching the end of their useful life and we had over 7,300 students qualifying for free or reduced price lunches. In their review of our determinations made in the Fall of 2021, the Auditor?s Office finds that we did not make determinations that were specific enough to meet their interpretations of the compliance supplement which is issued for the purpose of suggesting audit practices. However, the stated standards for program compliance are set in the establishing rules and the Code of Federal Regulations (CFR) 47 CFR sections 54.1700 et seq. The District maintains that it met all of these requirements. Therefore, in consulting with many other districts who are receiving similar determinations, we disagree with the Auditor?s position regarding the narrowness of acceptable actions and processes relating to unmet need determinations. Each of our devices went to students and staff who needed them. 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 $2,197,520 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. 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.