Finding Text
The District?s internal controls were inadequate for ensuring compliance with federal Title I eligibility requirements. Assistance Listing Number and Title: 84.010 ? Title I Grants to Local Educational Agencies Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 0204000, 0270309, 0270595 Known Questioned Cost Amount: $0 Background The objective of the Title I program is to improve the teaching and learning of children who are at risk of not meeting state academic standards and who reside in areas with high concentrations of children from low-income families. During fiscal year 2022, the District spent $890,158 in Title I federal funding. 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. Title I requires participating districts to allocate more funds to schools with higher poverty percentages. Districts must rank schools from highest to lowest poverty concentrations based on the total number of students from low-income families attending the school or residing in the area. For districts with community eligibility provision (CEP) schools, which are those that can serve free and reduced-price lunch to all students without collecting applications because of the high concentration of students from low-income families, the districts must use the CEP school direct certification low-income count when ranking schools. The rankings are included in the Title I application, and districts must maintain documentation supporting their rankings. Description of Condition Our audit found the District?s internal controls were inadequate for ensuring compliance with Title I eligibility requirements. Specifically, the District used the building enrollment count instead of the CEP school direct certification low-income count when ranking its school buildings. It also did not properly rank three out of six school buildings. In addition, the District did not retain support for the National School Lunch Program student count used to allocate funding to its buildings. We consider this deficiency in internal controls to be a material weakness, which led to material noncompliance. The issue was not reported as a finding in the prior audit. Cause of Condition The District had turnover in its management positions. The Business Manager who prepared the Title I application no longer works with the District, and the Program Director was new at the time of submitting the application. Current staff also could not locate the supporting documentation for the counts used in the application. Effect of Condition The District cannot demonstrate that it complied with program requirements and allocated funding from the highest-to-lowest-poverty school buildings, as federal regulations require. Further, this may have limited the type and nature of services provided to schools with higher percentages of poverty. Recommendation We recommend the District establish and follow internal controls to ensure it uses correct income data for determining Title I building rankings and funding allocations, and retains documentation supporting counts used in the application. District?s Response The Wahluke School District concurs with this finding. The following corrective actions will be taken: ? The Title I Program Director will work closely with the Grants Manager and Director of Finance to ensure that the annual application is completed correctly, including the allocations to school buildings. ? An action plan was submitted to OSPI which includes initial planning with the District Office team prior to the beginning of the school year, as well as monthly meetings with the Title I Program Director to ensure ranking and allocations are maintained. ? The district now has a Grants Manager that is working closely with the Title I Program Director to ensure that the buildings are within ranking order. Auditor?s Remarks We thank the District for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue during our next audit. Applicable Laws and Regulations Title 34 U.S. Code of Federal Regulations (CFR), Part 200, Title 1 ? Improving the Academic Achievement of the Disadvantaged, Subpart A ? Improving Basic Programs Operated by the Local Educational Agencies, Section 78 ? Allocation of funds to school attendance areas and schools. Title 2 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.