Finding Text
2024-010 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: 20230296, 20240542 Compliance Requirement: Matching, Level of Effort, Earmarking Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Under 34 CFR 300.203, school districts receiving federal Individuals with Disabilities Education Act (IDEA) funds must meet the Maintenance of Effort (MOE) requirement. MOE consists of two components: • Eligibility (Budgeted MOE): The district must budget at least the same amount of local or state and local funds for special education in the current fiscal year as it did in the prior fiscal year. • Compliance (Actual MOE): At year-end, the district must demonstrate that actual local or state and local expenditures for special education were at least equal to the prior year’s level. Additionally, the State of New Hampshire’s MOE worksheet 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, we noted that the district completed both the eligibility (budgeted) and compliance (actual) sections of the required State of New Hampshire MOE worksheet using total general fund budgeted and actual expenditures, rather than isolating special education-specific expenditures. As a result, the data used for MOE reporting did not accurately reflect the district’s financial commitment to special education. Effect: Because the worksheet was completed using total general fund figures rather than special education-only amounts, the district may not have accurately demonstrated compliance with the MOE requirement. This misreporting could lead to noncompliance with federal and state regulations and, if found to be out of compliance, could result in financial consequences such as the repayment of federal IDEA funds or adjustments to future allocations. Cause: Inexperienced staff: lack of sufficient training. Questioned Costs: $88,481 Repeat Finding: As identified in Schedule III, Summary Schedule of Prior Audit Findings, this is a repeat of finding 2023-012. Recommendation: We recommend that the district provide targeted training for personnel responsible for preparing the MOE worksheet to ensure they understand the distinction between total general fund expenditures and special education-specific amounts. Additionally, the district should implement an internal review process to verify the accuracy of data used for MOE reporting. If necessary, the district 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.