Finding Text
2020-005 Maintenance of Effort (Material Weakness)
Federal Agency: U.S. Department of Education
Pass-through Agency: New Hampshire Department of Education
Cluster/Program: Special Education Cluster
Assistance Listing Numbers: 84.027 & 84.173
Passed-through Identification: 92600, 202635, & 202646
Compliance Requirement: Matching, Level of Effort, Earmarking
Type of Finding:
Internal Control over Compliance – Material Weakness
Material Noncompliance
Criteria or Specific Requirement: In accordance with 34 CFR 300.203, a Local Educational Agency (LEA) must budget and expend, for the education of children with disabilities, at least the same amount of local or state and local funds as it did in the most recent fiscal year for which the LEA met the Maintenance of Effort (MOE) requirement. Compliance is demonstrated through both a budget-based test (eligibility) and an expenditure-based test (compliance).
Additionally, the State of New Hampshire requires LEAs to complete an annual MOE worksheet that includes both budgeted and actual expenditures related to special education which is used to determine compliance with both requirements and must be completed using financial data that reflects only special education-related expenditures within the general fund.
Condition: During our audit of the School Administrative Unit's compliance with the IDEA MOE requirement, we noted that the School Administrative Unit completed and submitted the required MOE worksheet to the State for each applicable District. However, the School Administrative Unit only included special education salary costs in the worksheet, despite being required to report all special education expenditures (e.g., contracted services, supplies, tuition, transportation, etc.). The School Administrative Unit indicated it reported only salary amounts because that was the expenditure category charged to the IDEA grant during the year. As a result, the data used for MOE reporting did not accurately reflect the School Administrative Unit’s financial commitment to special education.
Effect: By not including all special education expenditures in the MOE worksheet, the School Administrative Unit may not be accurately demonstrating compliance with the MOE requirement. This could result in the State’s determination of MOE compliance being based on incomplete or inaccurate data, potentially jeopardizing the School Administrative Unit’s eligibility for continued IDEA funding.
Cause: Inexperienced staff: lack of sufficient training.
Questioned Costs: $951,135, which represents the total federal expenditures incurred during fiscal year 2020.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the School Administrative Unit ensure all special education-related expenditures, regardless of funding source, are included in the MOE worksheet, as required by federal regulations. To support accurate reporting, the School Administrative Unit should provide targeted training to personnel responsible for completing the worksheet, with a focus on understanding the requirement to report all special education expenditures, not just those charged to the IDEA grant. Additionally, the School Administrative Unit should implement an internal review process to verify the completeness and accuracy of the financial data used for MOE reporting. If any inaccuracies are identified, the School Administrative Unit should work with the New Hampshire Department of Education to correct and resubmit the worksheet using the appropriate financial figures.
Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.