U.S. Department of Education Program Name: Impact Aid AL No. 84.041 SIGNIFICANT DEFICIENCY 2022-001 REPORTING Criteria: In accordance with the program?s legislation, per Section 7003(a)(1), ?for the purpose of computing the amount that a local educational agency is eligible to receive under subsection (b) or (d) for any fiscal year, the Secretary shall determine the number of children who were in average daily attendance in the schools of such agency, and for whom such agency provided free public education, during the preceding school year and who, while in attendance at such schools [?] (G) resided with a parent employed on Federal property situation (i) in whole or in part in the county in which such agency is located, or in whole or in part in such agency if such agency is located in more than one county?. In addition, per Section 7013(6), ?the term `free public education? means education that is provided: (A) at public expense, under public supervision and direction, and without tuition charge?. Condition: During our testing of the District?s Impact Aid application student counts and average daily attendance, we noted 68 non-resident students, including those whose parents were employed by the District during the year, but who were not regularly employed by the District throughout the year. Accordingly, the District should be charging tuition per the District?s tuition policies and state statute. In addition, we noted 9 students of District employees designated as Category ?G? who do not appear to be federally connected. Questioned Costs: $213,107 Context: Per the District?s tuition policy DFI-2: ?The Knob Noster R-VIII School District School Board recognizes that there are situations where nonresident students and residents who are not otherwise entitled to free education may be allowed by law to attend the Knob Noster RVIII School District or district programs on a tuition basis. In these situations, the Board will set tuition in an amount that, minimally, recoups the costs of the program and meets any applicable legal requirements.? In addition, per the District?s tuition policy JECA ?This district does not allow nonresident students to enroll and attend the district upon payment of tuition unless otherwise required by law. However, when the law requires enrollment of nonresident students on a tuition basis, the amount of tuition will be determined by the Knob Noster R-VIII School District in accordance with law and policy? and ?The children of nonresident teachers and regular employees may enroll in the district without paying tuition when the resident district is not otherwise liable for tuition (Sections 163.011, 168.151, RSMo.). In accordance with law, these students will be considered resident students for the purpose of determining average daily attendance, and the Board shall not solicit or receive money from a teacher employed by the district for the purpose of paying tuition or any other expenses for the operation of schools.? Per Section 163.011, RSMo., teachers and regular employees are defined as ?any teacher, teacher-secretary, substitute teacher, supervisor, principal, supervising principal, superintendent or assistant superintendent, school nurse, social worker, counselor or librarian who shall, regularly, teach or be employed for no higher than grade twelve more than one-half time in the public schools and who is certified under the laws governing the certifications of teachers in Missouri?. For the 68 non-resident students included in the application, 5 of the parents/guardians were employees, but not regular employees of the District as defined by Section 163.011, RSMo, and the remainder were not employed by the District. As such, per the District?s tuition policies, the District should be charging tuition to the parents/guardians of the non-resident students and the students should not be included in the Impact Aid student counts nor in the District?s average daily attendance. Lastly, the District itself is a local government and is not a Federal property. The Federal property within the District is Whiteman Air Force Base and the only District building on the Federal property is Whiteman Elementary School. As such, students whose parents/guardians are full-time employees of the District, but do not work at Whiteman Elementary School and also are not employed by Whiteman Air Force Base, should not be included in the federally-connected student counts for the Impact Aid application. Cause: The District?s internal controls over attendance, tuition and Impact Aid application reporting are not operating according to written procedures, state statute and Impact Aid legislation. Effect: The District did not comply with reporting requirements for the Application for Impact Aid. Lack of controls over attendance, tuition and Impact Aid application reporting has resulted in the District being overpaid by ED for the additional students included on the application. Recommendation: We recommend that the District follow its tuition procedures, state statutes and Impact Aid legislation regarding which students to include and exclude from the Impact Aid application. Response: The District will ensure that all students included in future Impact Aid applications are qualified resident students, including students of regular employees.