Finding Text
2024-001 MATCHING, LEVEL OF EFFORT, AND EARMARKING – SIGNIFICANT DEFICIENCY AND COMPLIANCE FINDING
Assistance Listing 84.334 Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP)
Condition: During the fiscal year 2024 audit of the GEAR UP program, it was noted that the School District did not meet the grant’s required matching contributions for the budget period covering October 1, 2023 through September 30, 2024. The School District was required to provide a minimum contribution equal to the total GEAR UP federal funds obligated1 during the stated budget year. However, while the School District reported $2,990,975 in total program obligations for the period, its matching contribution only amounted to $820,416 representing just 27% of the total GEAR UP funds obligated, and resulting in a matching shortfall of $2,170,558. Funding for this program is from the U.S. Department of Education.
Criteria: The Code of Federal Regulations Title 34, Part 694.7 states that to be eligible for GEAR UP funding, a grantee must make substantial progress towards meeting the matching percentage stated in its approved application for each year of the project period. The non-federal share of the cost of the GEAR UP project must not be less than 50 percent of the total cost of the project (i.e., one dollar of non-federal contributions for every one dollar of Federal funds obligated for the project) over the project period. The non-federal share of the cost of a GEAR UP project may be provided in cash or in-kind.
Effect: Failure to meet the required matching amount or show yearly progress in attaining the matching percentage could result in an increased risk of noncompliance with federal regulations and/or possible disallowance of grant funding.
Cause: The School District does not have procedures in place for identifying, securing, and tracking matching contributions.
Recommendation: We recommend that the School District strengthen its internal controls over the GEAR UP program matching requirements by developing and implementing the following procedures:
• Training grant personnel to help identify eligible funding sources for matching contributions;
• Creating a detailed tracking system for in-kind and cash contributions.
• Conducting periodic reconciliations of matching contributions to ensure compliance with grant requirements.
Views of Responsible Officials and Corrective Action Plan:
The responsible School District of Philadelphia (SDP) officials agree with the deficiencies identified regarding matching contributions, level of effort, and earmarking for the GEAR UP program. To address this finding, the following corrective actions will be implemented expeditiously to ensure the matching requirements are met by the end of the grant period in 2027:
● Training for Program Staff: Targeted training will be provided for the program staff to ensure a full understanding of the GEAR UP matching requirements, including the necessity for accurate recordkeeping and compliance with the level of effort and earmarking rules.
● Review and Strengthen Documentation Procedures: Complete a comprehensive review of all records and documentation related to matching contributions (including Years 1-3 to recoup unclaimed internal matches that may have been overlooked), and level of effort. A team (including both the School District’s GEAR UP Program Office and Grants Compliance Office) will oversee the collection and verification of all supporting documentation moving forward. This will include a detailed tracking system for in-kind and cash contributions. Lastly, the comprehensive plan will add school-level match requirements for each high school to identify other matching contributions at the school level.
● Monitoring and Oversight: Implement a quarterly leadership review process to ensure that all matching and level of effort requirements are being met and documented in accordance with program guidelines. Any concerns will be immediately addressed and corrected.
● Timeline: These corrective actions will be fully implemented by September 2025, with ongoing monitoring by the GEAR UP Program Office to ensure sustained compliance.
We are confident that these actions will remedy the deficiencies that were identified and prevent future occurrences.
Dr. Aja Holden, Executive Director, Office of Postsecondary Readiness, School District of Philadelphia, 215-400-5145