Finding Text
United States Department of Education, Student Support and Academic Enrichment, Assistance Listing 84.424. Passed through by Oregon Department of Education. Compliance requirement: Level of effort, supplement, not supplant. Criteria: Federal dollars must be used to supplement state and local funds, and cannot be used to replace local funds that a recipient would normally spend on the same activity. Condition: During the course of our audit, we identified that middle school sports were funded using state and local (general fund) resources in the year ended June 30, 2024, but funded using Student Support and Academic Enrichment funding during the year ended June 30, 2025. Per the Department of Education cross-cutting section, this condition is presumed supplanting but can be rebutted. The District provided sufficient support to rebut the presumption of supplanting, however we were unable to identify controls in place that would prevent supplanting in this program. Context: In its budget narrative provided to the passthrough agency, Oregon Department of Education, the District identified that middle schools sports had been funded using ESSER funds in the fiscal year ended June 30, 2024. This was not the case, as middle school sports had been charged to the general fund. Cause: We were unable to identify a specific cause as the grant manager in charge of this program for the year ended June 30, 2025 was no longer employed by the District. Effect: Absent controls over supplanting using federal program funding, the District is at risk of using federal funding for activities that enhance or increase services, rather than simply freeing up local funds for other uses. Recommendation: The District should implement a pre-award and annual budget review that requires written documentation showing that state or local funds have not been used for activities proposed to be funded with federal dollars in the upcoming year. If presumed supplanting is anticipated to occur, the rebuttal should be documented in writing with the grant and budget documents to support the control and compliance for this federal program requirement. Views of Responsible Officials: The District concurs with the finding that controls to prevent supplanting were insufficient. The presumption of supplanting was rebutted, and procedures were not formalized. No federal funds were used to supplant state or local resources. The District has implemented pre-award and annual review procedures, including required documentation of state and local fund use. Staff have been trained on supplanting rules and documentation requirements, and written records supporting rebuttals are maintained in grant and budget files for audit verification.