The District did not have adequate internal controls for ensuring compliance with allowable activities and cost and restricted purpose requirements. Assistance Listing Number and Title: 32.009, COVID-19 ? Emergency Connectivity Fund Program Federal Grantor Name: Federal Communications Commission Federal Award/Contract Number: ECF202114730 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $1,000,000 Background The Emergency Connectivity Fund (ECF) Program provides funding to meet the needs of students and school staff who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning. This is referred to as ?unmet need.? In fiscal year 2022, the District spent $1,000,000 in ECF Program funds to purchase 2,500 laptops for students. 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. Allowable activities and costs ECF Program recipients must only seek reimbursement for the eligible devices and services provided to students and staff with unmet need. Recipients are prohibited from seeking and receiving reimbursement for eligible equipment and services purchased for use solely at the school or held for future use (i.e., warehousing). Office of the Washington State Auditor sao.wa.gov Restricted purpose ? unmet need When submitting applications to the Federal Communications Commission (FCC), schools only had to provide an estimate of their students? and staff?s unmet needs. However, when requesting reimbursement, the District could only request program funds for eligible equipment and services provided to students and school staff with actual unmet need. Restricted purpose ? per-location and per-user limitations The FCC imposed per-location and per-user limitations to maximize the use of limited funds. Under the program, eligible schools could only be reimbursed for one connected device and Wi-Fi hotspot per student or school employee with unmet need, and no more than one fixed broadband connection per location, such as a student?s or employee?s residence. Description of Condition Allowable activities and costs/restricted purpose ? unmet need The District estimated unmet need for eligible equipment when it applied for ECF Program funds. However, our audit found the District?s internal controls were ineffective for ensuring it requested reimbursement only for eligible equipment provided to students with a documented unmet need. Specifically, the District purchased laptops, based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $1,000,000. However, the District did not maintain documentation showing it provided each laptop paid with program funds to a student with unmet need. Restricted purpose ? per-location and per-user limitations Our audit found the District?s internal controls were ineffective for demonstrating it complied with the FCC?s per-user limitations. Specifically, the District did not maintain documentation showing it monitored or had a tracking process in place to ensure it only provided one device per user. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition Allowable activities and costs/restricted purpose ? unmet need Office of the Washington State Auditor sao.wa.gov District officials did not know about the requirement to request reimbursement only for actual unmet need, and they thought the estimate of unmet need provided during the application process was sufficient to comply with this requirement. Additionally, the staff responsible for distributing the laptops to students did not know about the unmet need requirement. Restricted purpose ? per-location and per-user limitations The staff responsible for distributing the laptops to students did not know the District could not provide more than one device and/or connection per student. Effect of Condition and Questioned Costs Allowable activities and costs/restricted purpose ? unmet need Because the District did not have documentation supporting whether it provided eligible equipment to students with actual unmet need, it cannot demonstrate compliance with the program?s requirements. Given the nature of the program and circumstances, it is likely that at least some of the equipment the District charged to the award addressed unmet needs. However, the lack of a documented assessment of students? actual unmet need means that all costs are unsupported. Since we do not have a reasonable basis for estimating how much of the District?s expenditures are allowable, we are questioning all unsupported costs. Federal regulations require the State Auditor?s Office to report known questioned costs that are greater than $25,000 for each type of compliance requirement. We question costs when we find the District does not have adequate documentation to support expenditures. Restricted purpose ? per-location and per-user limitations Because the District did not maintain documentation, it cannot demonstrate compliance with the FCC?s restrictions. Additionally, we cannot determine whether the District only provided one device per user. Recommendation We recommend the District establish and follow internal controls to ensure staff fully understand the requirements for ECF awards. Specifically, the District should: ? Request reimbursement only for eligible equipment and services provided to students and staff with unmet need, and maintain documentation demonstrating compliance Office of the Washington State Auditor sao.wa.gov ? Provide no more than one device per student and employee in compliance with the ECF Program?s requirements District?s Response Yakima School District does not concur with the audit finding being issued by the State Auditors' Office. The funds granted by the Federal Communications Commission during the Covid-19 pandemic were awarded for "emergency connectivity." Prior to the closure of schools due to the Covid-19 pandemic and Governor Inslee's emergency proclamation, Yakima School District did not have 1:1 Student laptops. The "unmet need" is obvious, when the District had no student laptops and due to the pandemic now had to offer remote learning opportunities to all students. Additionally, the District's population is 83% low income, which drives the need for significant academic and social support. Important to note is that at the time of during the period of laptop distribution, the Yakima School district experienced a significant impact from high COVID-19 infection rates, which had profound implications for staffing and resource availability. Due to the prevailing circumstances in Yakima County, it was exceptionally challenging to find and retain sufficient staff to keep schools open, let alone conduct surveys among students. The district was operating under severe staffing shortages caused by the high COVID-19 percentages in the region. This made it virtually impossible to allocate additional personnel resources for conducting comprehensive surveys or assessments to determine the unmet need for devices or technology in every household. To address this complex situation and ensure continued access to education, the District implemented an alternative system, which required parents and students to proactively request a device if they did not possess an adequate one to participate in remote learning. This system was devised as a pragmatic response to the exceptional circumstances the district faced during the audit period. By establishing a mechanism that relied on parents and students to self-identify their need for a device, the district aimed to streamline the process and swiftly address the unmet need in a timely manner. Despite the challenges faced, the district was committed to ensuring every student had access to the necessary technology and actively encouraged families to request devices if required. It is crucial to understand that the unique circumstances in Yakima County during the audit period necessitated the implementation of creative solutions that were tailored to the local context. The district's alternative system ensured that the unmet Office of the Washington State Auditor sao.wa.gov need was effectively identified and addressed, albeit through a different approach than a traditional survey method. Furthermore, I would like to highlight that the district continuously worked towards securing additional resources during this time despite the constraints posed by staffing shortages and high COVID-19 percentages. The district actively worked with the school to identify staff that could participate in the process and prioritized device checkout to ensure to maintain compliance with OSPI's mandate to support learning environments that protect students. The compliance requirement per the FCC read as follows: Unmet Need: "To ensure that funding is focused on unmet need, the Commission requires schools, library, and consortia to certify as part of their funding application, that they are only seeking support for the eligible equipment and/or broadband provided to students and school staff who otherwise would lack access to connected devices and/or broadband connectivity sufficient to engage in remote learning." Activities Allowed: "ECF Program-funded devices and services must be used primarily for off-campus educational purposes and by students, school staff, and library patrons with otherwise unmet needs. To ensure that funding is focused on unmet needs, the Commission requires schools, library, and consortia to certify as part of their funding application, that they are only seeking support for eligible equipment and/or broadband connectivity provided to students, school staff and library patrons who would otherwise lack access to connected devices and/or broadband connectivity sufficient to engage in remote learning. Per the FCC compliance requirements, the Yakima School District provided the needed certification during the application process. The awarded funds were spent in accordance with the guidance provided by the FCC. The State Auditors' Office in this case is incorrectly applying the compliance requirements and should not issue an audit finding. Due to the necessity for emergency remote learning the District had to equip thousands students with learning devices. The District has an accurate and robust inventory system which allows us to track and safeguard the public assets. Auditor?s Remarks The State Auditor?s Office is sympathetic to the significant challenges the District faced during the COVID-19 pandemic, and deeply respects its commitment to student learning despite these challenges. SAO knows that in many cases, Office of the Washington State Auditor sao.wa.gov governments across Washington received significant pandemic-era federal funds without also receiving clear guidance on how to use them. Then, and now, SAO continues to advocate for clear, timely guidance from federal agencies to make sure Washington governments are not put in a difficult position at audit time. However, when auditing federal programs of any kind, governments must provide documentation to substantiate that they met the grant requirements. As is our practice and audit standards require, we will review the status of this finding during our next audit. We value our partnership with the District in striving for transparency in public service. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (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. Title 47 CFR Part 54, Universal Service, Subpart Q, Emergency Connectivity Fund, describes the ECF Program requirements.