Finding 1103188 (2024-005)

Significant Deficiency Repeat Finding
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2025-03-12

AI Summary

  • Core Issue: The Impact Aid application contained significant errors, including misreported special education students and incorrect expenditure figures, leading to potential funding losses.
  • Impacted Requirements: The District failed to comply with federal regulations on internal controls and accurate reporting, risking underfunding for eligible students.
  • Recommended Follow-Up: Implement a dual-review process for data entry in the Impact Aid application to ensure accuracy, with a completion target of June 2025.

Finding Text

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.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 526745 2024-004
    Significant Deficiency Repeat
  • 526746 2024-005
    Significant Deficiency Repeat
  • 1103187 2024-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
84.041 Impact Aid $6.17M
10.553 School Breakfast Program $818,042
84.060 Indian Education Grants to Local Educational Agencies $804,874
15.130 Indian Education Assistance to Schools $493,956
84.424 Student Support and Academic Enrichment Program $363,536
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $300,026
84.010 Title I Grants to Local Educational Agencies $250,223
10.565 Commodity Supplemental Food Program $175,785
84.365 English Language Acquisition State Grants $150,351
10.555 National School Lunch Program $139,943
84.040 Impact Aid Facilities Maintenance $105,821
84.173 Special Education Preschool Grants $52,727
84.027 Special Education Grants to States $26,358
84.425 Education Stabilization Fund $15,731
84.196 Education for Homeless Children and Youth $14,998
84.048 Career and Technical Education -- Basic Grants to States $12,491