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: COVID-19 ECF202103812 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $587,790 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 $587,790 in ECF Program funds to purchase laptops and Wi-Fi hotspot services for students. 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 and services provided to students and staff with unmet need. Recipients are prohibited from seeking and receiving reimbursement for eligible equipment and services purchased for use solely at the school or held for future use (i.e., warehousing). Office of the Washington State Auditor sao.wa.gov Restricted purpose ? unmet need When submitting applications to the Federal Communications Commission (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 and services provided to students and school staff with actual unmet need. Restricted purpose ? per-location and 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 and Wi-Fi hotspot per student or school employee with unmet need, and no more than one fixed broadband connection per location, such as a student?s or employee?s residence. 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 requested reimbursement only for eligible equipment and services provided to students with a documented unmet need. Specifically, the District purchased laptops and Wi-Fi hotspot services, based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $587,790. However, the District did not maintain documentation showing it provided each laptop and Wi-Fi hotspot service 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 or connection per user and location. 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 Although employees in the District?s Finance Department knew that another department received an ECF Program award, they said they were unaware of all its regulations. Further, they did not know about the requirement to request reimbursement only for actual unmet need, and thought the estimate of unmet need provided during the application process was sufficient to comply with this requirement. Restricted purpose ? per-location and per-user limitations Staff said they did not know the District needed to maintain documentation at the time of distribution showing it only provided one device and/or connection per student and employee with unmet need. 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 and services to students 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 and services the District charged to the award addressed unmet needs. However, the lack of a documented assessment of students? 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 or connection per user and location. Office of the Washington State Auditor sao.wa.gov 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 with unmet need, and maintain documentation demonstrating compliance ? Monitor to confirm it provides no more than one device per student and employee, and no more than one broadband connection per location, in compliance with the ECF Program?s requirements District?s Response During the COVID -19 pandemic, the District applied for ECF funding for hotspots and chrome books for our students. The Wapato School District was not a 1 to 1 District in regards to devices, but we had to pivot quickly to ensure our students had a device and connectivity. This would ensure we could provide instruction during remote learning and school closures during the pandemic. The District provided a survey to all students/parents seeking information regarding connectivity and devices. The survey results showed many of our students did not have adequate connectivity or a device to stream videos, which is needed or remote instruction. Also, the District did not receive responses from all families as they did not have connectivity to do so. The District used its library check out system to issue Chromebook and hot spots to students. The process was for students who needed a device to communicate this to their school building, then they would be directed to the library to obtain a device. The student?s requests were an unmet need. Although the student/parent did not sign a form to document unmet need, the District felt the request for a device was sufficient. As for the per location and per user limitation, the District?s library system was used to provide reports during the audit process, but it was determined the reports were not run at the time of reimbursement. The Wapato School District is a District with over 90% poverty level, the District?s priority was to ensure students were provided devices for instruction and connectivity during the pandemic. The District will strengthen its controls over documenting unmet need for students as well as maintaining reports that show per location/ per user limits at the time ECF funding is requested. Our IT department has started to implement a formal process, which includes a written application for our student/family to submit prior to receiving a device. They are also working on written instructions for the deployment of devices and documentation to be obtained. These instructions will be provided to all school buildings. 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 students 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 grant 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. Assistance Listing Number and Title: 32.009, COVID-19 ? Emergency Connectivity Fund Program Federal Grantor Name: Federal Communications Commission Federal Award/Contract Number: COVID-19 ECF202103812 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $587,790 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 $587,790 in ECF Program funds to purchase laptops and Wi-Fi hotspot services for students. 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 and services provided to students and staff with unmet need. Recipients are prohibited from seeking and receiving reimbursement for eligible equipment and services purchased for use solely at the school or held for future use (i.e., warehousing). Office of the Washington State Auditor sao.wa.gov Restricted purpose ? unmet need When submitting applications to the Federal Communications Commission (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 and services provided to students and school staff with actual unmet need. Restricted purpose ? per-location and 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 and Wi-Fi hotspot per student or school employee with unmet need, and no more than one fixed broadband connection per location, such as a student?s or employee?s residence. 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 requested reimbursement only for eligible equipment and services provided to students with a documented unmet need. Specifically, the District purchased laptops and Wi-Fi hotspot services, based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $587,790. However, the District did not maintain documentation showing it provided each laptop and Wi-Fi hotspot service 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 or connection per user and location. 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 Although employees in the District?s Finance Department knew that another department received an ECF Program award, they said they were unaware of all its regulations. Further, they did not know about the requirement to request reimbursement only for actual unmet need, and thought the estimate of unmet need provided during the application process was sufficient to comply with this requirement. Restricted purpose ? per-location and per-user limitations Staff said they did not know the District needed to maintain documentation at the time of distribution showing it only provided one device and/or connection per student and employee with unmet need. 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 and services to students 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 and services the District charged to the award addressed unmet needs. However, the lack of a documented assessment of students? 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 or connection per user and location. Office of the Washington State Auditor sao.wa.gov 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 with unmet need, and maintain documentation demonstrating compliance ? Monitor to confirm it provides no more than one device per student and employee, and no more than one broadband connection per location, in compliance with the ECF Program?s requirements District?s Response During the COVID -19 pandemic, the District applied for ECF funding for hotspots and chrome books for our students. The Wapato School District was not a 1 to 1 District in regards to devices, but we had to pivot quickly to ensure our students had a device and connectivity. This would ensure we could provide instruction during remote learning and school closures during the pandemic. The District provided a survey to all students/parents seeking information regarding connectivity and devices. The survey results showed many of our students did not have adequate connectivity or a device to stream videos, which is needed or remote instruction. Also, the District did not receive responses from all families as they did not have connectivity to do so. The District used its library check out system to issue Chromebook and hot spots to students. The process was for students who needed a device to communicate this to their school building, then they would be directed to the library to obtain a device. The student?s requests were an unmet need. Although the student/parent did not sign a form to document unmet need, the District felt the request for a device was sufficient. As for the per location and per user limitation, the District?s library system was used to provide reports during the audit process, but it was determined the reports were not run at the time of reimbursement. The Wapato School District is a District with over 90% poverty level, the District?s priority was to ensure students were provided devices for instruction and connectivity during the pandemic. The District will strengthen its controls over documenting unmet need for students as well as maintaining reports that show per location/ per user limits at the time ECF funding is requested. Our IT department has started to implement a formal process, which includes a written application for our student/family to submit prior to receiving a device. They are also working on written instructions for the deployment of devices and documentation to be obtained. These instructions will be provided to all school buildings. 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 students 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 grant 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.