Finding 597830 (2022-017)

-
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2022-12-31
Audit: 26549
Organization: Lafayette Prish School Board (LA)

AI Summary

  • Core Issue: The School Board requested reimbursement for COVID-19 hospitalization claims, which may not be allowed under grant guidelines.
  • Impacted Requirements: Grant funds should only cover public health protocols like testing and vaccinations, not hospitalization costs.
  • Recommended Follow-Up: Implement internal controls to ensure compliance with grant guidelines and appeal to LDOE for clarification on self-insured entities.

Finding Text

Condition The School Board requested grant reimbursement for amounts paid by the self-insurance fund to cover claims for COVID-19 hospitalizations. Criteria In accordance with grant guidelines, the funds may be used to implement public health protocols, such as COVID-19 testing and vaccination, meant to decrease the spread of COVID-19. Payment for hospitalizations to treat infections does not appear to be allowable within the grant guidelines of implementing public health protocols. Cause The School Board did not have internal control policies and procedures in place to ensure that funds were spent in accordance with grant guidelines. Effect The School Board expended grant funds for an activity that does not appear to be allowable under the grant guidelines. Context A sample of 65 disbursements was selected for audit from a population of 233 disbursements. The test found that 1 disbursement was a payment made to reimburse the self-insurance fund for amounts paid for claims related to COVID-19 hospitalization. There are $756,609 of questioned costs as a result of this reimbursement. Our sample was a non-statistical sample. Recommendation The School Board should implement policies and procedures to ensure that all expenditures under grant programs are allowable under grant guidelines. Views of Responsible Officials and Planned Corrective Action The Lafayette Parish School System (LPSS) Self-Funded Group Health Insurance fund paid $756,609 in hospitalization claims that were directly caused by Covid-19 according to the hospitals that provided hospitalization services to our employees. Had the Covid-19 pandemic not occurred, LPSS would not have experienced an increase in claim expenses that were directly caused by Covid-19 which is categorically tracked by hospitals. During the covid pandemic, LPSS had several conference calls with Louisiana Department of Education (LDOE) representatives concerning the allowability of Covid Testing, Vaccinations and Covid Hospitalizations. The objective was to remain compliant with all federal guidelines concerning these special funds. After many hours of conference calls and consultations with LDOE staff, we were informed these expenditures were allowed in addition to a written response. In anticipation of these charges, LPSS submitted an ESSER II budget to the LDOE, which included Covid Hospitalization claims, and the budget was approved. Based on LDOE?s budget approval and prior verbal and written responses, LPSS staff believed they were clear to proceed and recover from these unplanned Covid-19 hospitalization expenditures. As a result of this audit finding, LPSS will appeal to the LDOE and the Federal Government for relief and an eventual inclusion of guidelines for self-funded entities such as LPSS. Unlike other school districts, LPSS is self-insured and assumes the financial risks and obligation of each employee?s medical and prescription claims. We believe the writers of the federal guidelines / FAQs may not have been privy to the operational affairs of school districts that are self-insured to carve out language specific to our operations. On December 13, 2022, a request for review was sent to LDOE in response to this audit finding. The LDOE plans to utilize their resources and contacts while enlisting the help of their contracted attorneys who specialize in federal grants to provide an initial opinion on the allowability of Covid Hospitalization expenditures. It may take several months before an official response is provided by the Federal Government.

Categories

Questioned Costs Cash Management Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.010 Title I Grants to Local Educational Agencies $14.09M
10.555 National School Lunch Program $13.45M
10.558 Child and Adult Care Food Program $4.58M
10.553 School Breakfast Program $3.33M
84.367 Improving Teacher Quality State Grants $1.89M
93.575 Child Care and Development Block Grant $1.82M
84.424 Student Support and Academic Enrichment Program $1.17M
84.334 Gaining Early Awareness and Readiness for Undergraduate Programs $990,476
93.434 Every Student Succeeds Act/preschool Development Grants $608,428
84.371 Striving Readers $589,432
10.559 Summer Food Service Program for Children $549,913
84.048 Career and Technical Education -- Basic Grants to States $505,314
84.027 Special Education_grants to States $202,855
84.011 Migrant Education_state Grant Program $187,847
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $153,369
10.766 Community Facilities Loans and Grants $152,656
84.365 English Language Acquisition State Grants $145,837
84.173 Special Education_preschool Grants $126,353
84.196 Education for Homeless Children and Youth $125,681
10.582 Fresh Fruit and Vegetable Program $122,364
84.425 Education Stabilization Fund $90,714
93.981 Improving Student Health and Academic Achievement Through Nutrition, Physical Activity and the Management of Chronic Conditions in Schools $8,738
10.543 Healthier US School Challenge: Smarter Lunchrooms $1,293
84.377 School Improvement Grants $921