oversight

State Monitoring of Formula Grants.

Published by the Department of Education, Office of Inspector General on 2001-11-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                     State Monitoring of Formula Grants





                                      FINAL AUDIT REPORT
                                          ED-OIG/A04-B0008

                                           NOVEMBER 2001





Our mission is to promote the efficient                       U.S. Department of Education
and effective use of taxpayer dollars                         Office of Inspector General
in support of American education                              Atlanta, Georgia
                                       NOTICE

       Statements that managerial practices need improvements, as well as other
     conclusions and recommendations in this report, represent the opinions of the
  Office of Inspector General. Determinations of corrective action to be taken will be
              made by the appropriate Department of Education officials.

 In accordance with the Freedom of Information Act (5 U.S.C. §552), reports issued by
the Office of Inspector General are made available, if requested, to members of the press
     and general public to the extent information contained therein is not subject to
                               exemptions under the Act.
                            UNITED STATES DEPARTMENT OF EDUCATION 


                                              OFFICE OF INSPECTOR GENERAL

                                                                                                      THE INSPECTOR GENERAL
                                                     HOV 2 1 ZOfJI,
MEMORANDUM

TO: 	            Susan B. Neuman
                 Assistant Secretary
                 Office of Elementary and Secondary Education


FROM: 	          Lorraine Lewis

SUBJECT: 	 FINAL AUDIT REPORT
                 State Monitoring ofFormula Grants
                 Control Number ED-OIGIA04-B0008

Attached is our subject final report that covers the results of our review of State monitoring of
fonnula grants. We received your comments concurring with the findings and 'recommendations
in our draft report.

Please provide the Supervisor, Post Audit Group, Office of Chief Financial Officer and the
Office of Inspector General with quarterly status reports on promised corrective actions until all
such actions have been completed or continued follow-up is unnecessary.

You have been designated as the primary action official for this report. The Assistant Secretaries
in the Office of Special Education and Rehabilitati ve Services~ and the Office of Vocational and
Adult Education are collateral officials. Please coordinate with them regarding any actions in
connection with the recommendations contained in the report.

In accordance with the Freedom of Infonnation Act (5 U.S.C. §552), reports issued by the Office
of Inspector General are made available, if requested, to members of the press and gen~ral public
to the extent infonnation contained therein is not subject to exemptions under the Act.

We appreciate the cooperation given us in the review. Should you have any questions, please
call Carol S. Lynch, Regional Inspector General for Audit, at (404) 562-6462. Please refer to the
above audit control number in all correspondence relating to this report.


Attachment


cc:        Delores Warner, ALO, OESE




                                     400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202-1510

             Our mission is to ensure equal access to education and to promote educational exreUence throughout the Nation.
                          UNITED STATES DEPARTMENT OF EDUCATION

                                            OFFICE OF INSPECTOR GENERAL

                                                                                                     THE INSPECTOR GENERAL
                                                         NOV 27       zaflf
MEMORANDUM

TO:            Robert Pasternack,
               Assistant Secretary
               Office of Special Education and Rehabilitative Services


FROM:          Lorraine Lewis

SUBJECT:       FINAL AUDIT REPORT
               State Monitoring of Formula Grants
               Control Number ED-OIG/A04-B0008

Attached is a copy of the subject·final report that covers the results of our review of State
Monitoring of Formula Grants. We received your comments concurring with the findings and
recommendations in our draft audit report.

You have been designated as a collateral action official for this report. The Assistant Secretary
for Elementary and Secondary Education has been assigned as the primary action official.
Please coordinate with her regarding any actions in connection with the recommendations.

In accordance with the Freedom of Information Act (5 U.S.C. §552), reports issued by the Office
of Inspector General are made available, if requested, to members of the press and general
public to the extent information contained therein is not subject to exemptions under the Act.

We appreciate the cooperation given to us in the review. Should you have any questions,
please call Carol S. Lynch, Regional Inspector General for Audit, at (404) 562-6462. Please
refer to the above audit control number in all correspondence relating to this report.


Attachment


cc:     Barbara Bauman, ALO, OSERS




                                   400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202·1510

           Our mission is to ensure equal access to education and to promote educational exceUence throughout the Na.tion.
                          UNITED STATES DEPARTMENT OF EDUCATION

                                            OFFICE OF INSPECTOR GENERAL

                                                                                                     THE INSPECTOR GENERAL
                                                      NOV 27 2001
MEMORANDUM

TO:            Carol D'Amico,
               Assistant Secretary
               Office of Vocational and Adult Education


FROM:           Lorraine Lewis

SUBJECT:        FINAL AUDIT REPORT
                State Monitoring of Formula Grants
                Control Number EO-OIG/A04-B0008

Attached is a copy of the subJect.final report that covers the results of our review of State
Monitoring of Formula Grants. We received your comments concurring with the findings and
recommendations in our draft audit report.

You have been designated as a collateral action official for this report. The Assistant Secretary
for Elementary and Secondary Education has been assigned as the primary action official.
Please coordinate with her regarding any actions in connection with the recommendations.

In accordance with the Freedom of Information Act (5 U.S.C. §552), reports issued by the Office
of Inspector General are made available, if requested, to members of the press and general
public to the extent information contained therein is not subject to exemptions under the Act.

We appreciate the cooperation given to us in the review. Should you have any questions,
please call Carol S. Lynch, Regional Inspector General for Audit, at (404) 562-6462. Please
refer to the above audit control number in all correspondence relating to this report.


Attachment

cc:     Helen Taylor, ALa, OVAE




                                   400 MARYLAND AVE.,     s.w. WASHINGTON,      D.C. 20202-1510 


           Our mission is to ensure equal access to education and to promote educational exceUence throughout the Nation. 

State Monitoring of Formula Grants   ED-OIG/A04-B0008




TABLE OF CONTENTS


Executive Summary                                        1


Background                                               2


Monitoring Requirements                                  2


State Agencies’ Monitoring Systems Overview


       Title I Program                                   3

       Special Education                                 4

       Vocational Education                              4

       Single Audit                                      4


Conclusion                                               5


Recommendations                                          6


Auditee Comment                                          6


Objective, Scope, and Methodology                        7


Statement on Management Controls                         8


Appendix

     Table 1                                             9

     Table 2                                            10

     Table 3                                            11


Attachment A - Auditee Comments                         12





                                             ii
State Monitoring of Formula Grants   ED-OIG/A04-B0008


EXECUTIVE SUMMARY

       We performed a review of States’ monitoring of formula-based grant programs.
       The objective of our review was to determine whether States are monitoring
       elementary and secondary education formula grants at the sub-recipient level for
       compliance with appropriate laws and regulations. In addition, we compared the
       monitoring methods used at the States to a set of standards proposed by the
       OIG, as the minimum standards needed for effective monitoring and oversight.
       To accomplish our objectives we focused our review on the three programs with
       the preponderance of formula based grants at the State level. These programs
       are Title I (Elementary and Secondary Education Act), Special Education (The
       Individuals with Disabilities Education Act, Part B), and Vocational Education
       (Carl D. Perkins Vocational Education Act).

       Based on the information we obtained during our review, we conclude that State
       program offices included in our review have monitoring systems in place to
       monitor sub-recipients. In addition, for the most part these monitoring systems
       meet the minimum monitoring standards proposed by the Office of Inspector
       General. These monitoring systems include conducting on-site visits on a
       cyclical basis, technical assistance, and enforcement of instances of
       noncompliance. State program officials indicated that the results of site visits are
       documented in writing. In addition, there was full time staff devoted to
       monitoring, and they used a formal monitoring instrument.

       In addition to the monitoring performed by State program officials, States and
       sub-recipients are being audited in accordance with Office of Management and
       Budget (OMB) Circular A-133. These audits are performed by the State Auditor,
       city or county auditors or by independent public accountants (IPA). Each State
       reported that there is an office responsible for resolving findings contained in the
       single audit reports. We found, however, that not all State program offices track
       and analyze single audit findings and site visit results. State program offices that
       performed this analysis also had the capability to report the results to the
       Department. However, these program offices were not doing so. In addition, we
       noted that there is very little coordination between the State program offices and
       the State offices responsible for performing or receiving the audits, and the
       offices responsible for resolving the audit findings. We have made two
       recommendations to Department program officials related to how States track
       single audit findings and coordinate with officials performing or receiving audits,
       and offices performing monitoring reviews.

       Department program officials concurred with our recommendations and
       discussed implementation procedures. The full text of the comments is included
       as Attachment A.




                                              1

State Monitoring of Formula Grants   ED-OIG/A04-B0008



Background

       The Department of Education awards approximately $13 billion to States
       and school districts for elementary and secondary education. These
       awards are primarily through formula-based grant programs designed to
       support improvements in basic and academic skills and to help States and
       school districts meet the special needs of schools and students. The
       awards also help States meet their responsibility to provide a free and
       appropriate public education for children with disabilities. Six programs
       account for approximately 95 percent of the Department’s funding to
       elementary and secondary education. These are the Goals 2000 Program
       under the Educate America Act, Title I of the Elementary and Secondary
       Education Act, the Dwight D. Eisenhower Professional Development
       programs, the Safe and Drug-Free Schools program, the Perkins
       Vocational Education program, and Part B of The Individuals with
       Disabilities Education Act.

       For formula-based grant programs, States are usually the primary grant
       recipient and they are required to pass the majority of grant funds through
       to local educational agencies. As the primary grant recipients, States are
       responsible for ensuring that all of the Federal funds they receive,
       including funds passed to sub-recipients are used only for program related
       purposes as described in the grant agreement or statute.



Monitoring Requirements

       The Education Department General Administrative Regulations (EDGAR)
       found in 34 CFR 80 contain provisions requiring States to monitor sub-
       recipients to ensure compliance with applicable Federal requirements. In
       addition, OMB Circular A-133 requires States to monitor sub-recipients. In
       addition to EDGAR, there are program-specific requirements that direct
       State education officials to monitor formula grant sub-recipients. For Title
       I, the Improving America's Schools Act (IASA) states that State education
       agencies (SEA) have the overall responsibility for ensuring that Title I
       monies are used in compliance with all requirements. There are specific
       requirements for Special Education in the The Individuals with Disabilities
       Education Act (IDEA) that direct SEAs to ensure that the requirements of
       IDEA Part B are met. Requirements for monitoring programs and
       activities used by the States to carry out IDEA Part C are found in both the
       U.S. Code and the Code of Federal Regulations. Aside from the
       provisions set forth in EDGAR, there are no specific statutory and
       regulatory provisions that relate specifically to monitoring vocational
       education programs.


                                             2

State Monitoring of Formula Grants   ED-OIG/A04-B0008



       Currently, there are no specific laws or regulations that require a particular
       method of monitoring or dictate the frequency of monitoring activities. To
       evaluate the adequacy of monitoring, we compared State program offices'
       current monitoring systems to the minimum standards for SEA monitoring
       of local education agencies (LEA) proposed by the Office of Inspector
       General. These standards first appeared in "An OIG Perspective on the
       Reauthorization of the Elementary and Secondary Education Act," dated
       February 1999. Using these standards the SEAs would:

       •	 Conduct monitoring of LEAs sufficient to ensure compliance with
          program requirements.
       •	 Document the purpose, scope, and results of each oversight activity.
       •	 Ensure that appropriate technical assistance and enforcement
          measures are taken when necessary.
       •	 Systematically analyze the results of LEA audits and other oversight
          activities to identify trends in findings and develop monitoring and
          technical assistance strategies to reduce occurrences of similar
          problems.
       •	 Annually report the results of these analyses to the Department.



 STATE AGENCIES MONITORING SYSTEMS OVERVIEW
       We visited nine program offices (Title I, Vocational Education, and Special
       Education) in three States to determine the level of monitoring for
       compliance regulations. We also sent a survey questionnaire to 30
       program offices in ten randomly selected States for these three programs.
       Twenty-nine of the State program offices responded to our questionnaire.
       In addition, we analyzed information on monitoring obtained by the
       General Accounting Office in a survey of State Title I directors of the Title I
       program. The following is a summary of the information we obtained by
       program.

       Title I Program
       Twelve of the thirteen State Title I program offices reported having a
       monitoring system that includes LEA site visits conducted on a cyclical
       basis. One State Title I program office indicated that they are in the
       process of developing their monitoring system. In one of the States we
       visited, program officials reported that they approach their oversight
       process from a technical assistance rather than a strictly compliance
       perspective. The reported range of site visits to LEAs was three to five
       years. One State Title I program office reported that they only visit LEAs
       with schools designated as low performing and only at the LEA's request.
       Twelve Title I program offices reported that they have a monitoring

                                             3

State Monitoring of Formula Grants   ED-OIG/A04-B0008

       instrument and one State was in the process of developing their
       instrument. Eleven of the State Title I program officials indicated that they
       issue a formal report, with twelve indicating that they have enforcement
       measures in place to handle issues of noncompliance. All thirteen Title I
       State program officials reported that they provide technical assistance.
       Only four State Title I officials reported that they have or are in the process
       of developing a database for analyzing site visit results and monitoring
       findings for trends. See Appendix, Table 3 for the results of GAO’s survey
       of all 50 States’ Title I directors regarding monitoring of the Title I program.

       Special Education
       All thirteen State special education program offices reported having a
       monitoring system that includes site visits conducted on a cyclical basis.
       LEAs’ site visits ranged from three to six years. One State program office
       indicated that there was no yearly cycle. All of the thirteen State special
       education program offices indicated that the results of reviews are
       documented in a formal report. Twelve of the State program offices
       reported that they use a monitoring instrument for the review and all
       indicated that they provide technical assistance. Also, twelve of the
       thirteen State special education offices indicated that there are procedures
       in place for handling instances of noncompliance identified through
       monitoring. Seven of the thirteen state program offices reported that they
       have a database or are in the process of developing a system that tracks
       audit and monitoring findings.

       Vocational Education
       The twelve State vocational education program offices reported having
       monitoring systems that consist of site visits conducted on a cyclical basis.
       LEAs are visited every two to five years. Two States indicated that there
       is no yearly cycle and that they visit LEAs as needed. Eight of the twelve
       vocational offices indicated that they document the results of the
       monitoring in a formal report. All twelve State vocational education
       program offices reported that they have monitoring instruments for
       compliance monitoring and provide technical assistance to LEAs when
       necessary. Nine of the twelve State vocational education offices reported
       having measures in place to address issues of noncompliance. Only three
       State offices reported that they either formally (with a database) or
       informally track previous oversight activity to identify any trends.

       Single Audit
       In addition to the monitoring performed by State Program officials, States
       and sub-recipients are being audited in accordance with Office of
       Management and Budget (OMB) Circular A-133. These audits are
       performed by the State Auditor, city or county auditors or by independent
       public accountants (IPA). In each of the three States we visited, we met
       with the State Auditor and other State officials responsible for performing


                                             4

State Monitoring of Formula Grants   ED-OIG/A04-B0008

       or receiving the single audit to discuss and review the process used by
       each of these States to perform and process single audits of sub-
       recipients.

       We found that in each of the three States a division separate from the
       program offices is responsible for resolving single audit findings. In
       discussions with the nine program offices in these States, we learned that
       the program offices only receive single audit reports if the reports contain
       findings related to their particular program. One State Title I program
       office reported that they monitor formula grant sub-recipients on a cyclical
       basis and rely on single audit reports to monitor LEA compliance annually.
       A second State Title I office indicated to us that their office has little, if any,
       interaction with the State office responsible for performing or receiving
       single audits.

       The majority of the State program offices are monitoring on a cyclical
       basis that ranges from two to six years. Since single audits are performed
       on an annual basis, these audits are an additional tool for monitoring
       compliance. As a means of monitoring, State program offices and State
       offices performing or receiving single audits, and offices resolving the
       audit findings need to coordinate in order to make the single audits more
       effective.

       All States are required to submit their LEA single audit reports to the
       Single Audit Clearinghouse. Following the minimum standards proposed
       in the OIG Perspectives Paper, State program officials would analyze the
       results of LEA audits and State program monitoring activities to identify
       trends and develop monitoring and technical assistance strategies to
       reduce the occurrence of similar problems. However, the results of our
       review show that not all State program officials track and analyze single
       audit findings and monitoring site visit results. Our review showed that
       only four State Title I offices, seven State special education offices, and
       three State vocational education offices either formally or informally
       tracked or analyzed findings from single audits or monitoring reviews to
       identify trends. State program officials that tracked and analyzed findings
       had the capability to report the results to the Department. However, none
       currently do so.



CONCLUSION

       Based on this work, for the State offices included in our review, we
       conclude that Title I, Special Education, and Vocational Education State
       program officials monitored formula grants for compliance with applicable
       program laws and regulations. EDGAR requires state education agencies
       to monitor formula grant sub-recipients to ensure compliance with

                                             5
State Monitoring of Formula Grants   ED-OIG/A04-B0008

       applicable federal laws and regulations. State program offices did have
       monitoring systems in place or were in the process of developing such a
       system. Currently, there are no specific laws and regulations that require
       a particular monitoring method or prescribe the frequency of monitoring
       activities. We did not perform extensive testing in each State to evaluate
       the effectiveness of the States’ monitoring methods to address
       compliance.

       State monitoring systems appear to be adequate when compared to the
       minimum standards proposed in the OIG Perspectives Paper. These
       monitoring systems consisted of site visits; the provision of technical
       assistance and the documentation of monitoring site visit results. State
       program officials also reported that there were enforcement measures in
       place to handle instances of noncompliance. However, not all State
       program offices tracked and analyzed single audit findings and monitoring
       site visit results. State program officials that performed this kind of
       analysis had the capability to report the results to the ED.



RECOMMENDATIONS

We recommend that the Assistant Secretaries in the Office of Elementary and
Secondary Education, the Office of Special Education and Rehabilitative
Services, and the Office of Vocational and Adult Education, in their monitoring
and oversight efforts encourage State program offices to:

1.1	   Establish better coordination between State program offices and State
       offices performing or receiving LEA Single Audits, and offices resolving
       the audit findings.

1.2	   Track and analyze single audit findings and site visit results to identify
       trends and develop and implement monitoring and technical assistance
       strategies to reduce occurrences of similar problems.


Auditee’s Comments

The primary and two collateral action officials concurred with both of the
recommendations contained in the report. A full text of the comments is included
as Attachment A.




                                             6

State Monitoring of Formula Grants   ED-OIG/A04-B0008



          OBJECTIVE, SCOPE, AND METHODOLOGY

The objective of our review was to determine whether States are monitoring
elementary and secondary education formula grants at the sub-recipient level.
We also evaluated the States’ monitoring methods using the minimum standards
proposed by the Office of Inspector General in the February 1999 Perspectives
Paper on the Reauthorization of the ESEA.

We focused our review on the three programs with the preponderance of formula
based grants at the State level. The programs were the Title I program in the
Office of Elementary and Secondary Education, Special Education (Individuals
with Disabilities Education Act, Part B) in the Office of Special Education and
Rehabilitative Services and Vocational Education (Perkins III) in the Office of
Vocational and Adult Education.

To accomplish our objectives, we performed the following:

•	 Researched statutory and regulatory provisions applicable to formula grant
   monitoring. In addition, we had discussions with Education Program officials
   concerning the monitoring requirements with the States.

•	 Analyzed information contained in the Single Audit Clearinghouse database
   related to findings contained in single audit reports.

•	 Conducted site visits to three States to interview State education program
   officials and State audit officials to determine the level of monitoring for
   compliance regulations. See the APPENDIX, Table 1 for the States visited by
   ED-OIG.

•	 Conducted a survey via a questionnaire of ten randomly selected States. The
   questionnaire was sent to State program offices to identify the level of
   monitoring in the three program areas in our scope. We did not confirm the
   information provided as a result of the survey questionnaire. See the
   APPENDIX, Table 2 for a listing of the randomly selected States.

•	 Analyzed information obtained by the General Accounting Office (GAO) in a
   survey of State Title I Directors on the Title I program. See the APPENDIX,
   Table 3 for a synopsis of GAO’s findings and the related report information.

•	 Reviewed the OIG Perspectives Paper to identify the OIG proposed minimum
   standards for State monitoring of local education agencies.




                                             7

State Monitoring of Formula Grants   ED-OIG/A04-B0008

The audit period covered fiscal year 2000 (October 1, 1999 to September 30,
2000). We conducted site visits to the States of Georgia, Tennessee, and South
Carolina in July and August of 2000. Information from our survey questionnaire
was collected during July and August 2000. Our review was conducted
according to government auditing standards appropriate to the scope of the
review described above.


              STATEMENT ON MANAGEMENT CONTROLS


We did not assess the various States’ management controls over their monitoring
systems because it was not significant to our specific audit objectives. We
summarized the information obtained from the State program offices for inclusion
in our report. In addition, we analyzed the information to identify common areas
of concern. In analyzing the adequacy of the States monitoring systems, we
compared the elements of the systems to the standards proposed in the OIG
Perspectives Paper. We did not evaluate the effectiveness of the various States’
monitoring systems.

Because of inherent limitations, a study and evaluation made for the limited
purpose described above would not necessarily disclose all material weaknesses
in management controls. However, our review did identify two areas of concern
as discussed in the body of the report.




                                             8

State Monitoring of Formula Grants    ED-OIG/A04-B0008

                                                                                    APPENDIX
                                                                                     Page 1 of 3

    SUMMARY OF STATE MONITORING DATA COLLECTED FROM
          SITE-VISITS AND SURVEY QUESTIONNAIRE


                                           Table 1

               Name of State             Monitoring System         Cycle Frequency of
               and Program                    in Place                 Site Visits


        ED-OIG SITE VISIT

        GEORGIA
                                                                              1
          Title I                                    Yes
          Special Education                          Yes                  5 years
          Vocational Education                       Yes                  5 years
        TENNESSEE
          Title I                                    Yes                  3 years
          Special Education                          Yes                  3 years
          Vocational Education                       Yes                  5 years
        South Carolina
          Title I                                    Yes                  3 years
          Special Education                          Yes                  4 years
          Vocational Education                       Yes                  Annual




1
 Visits LEA based on low performing schools (LPS). Focus of visit is technical assistance. For
FY 1999 visited 350 of designated 600 LPSs in State.


                                                 9
State Monitoring of Formula Grants      ED-OIG/A04-B0008

                                                                                         APPENDIX
                                                                                           Page 2 of 3
                                            Table 2
             Name of State                 Monitoring System            Cycle Frequency of
             and Program                        in Place                    Site Visits
        ED-OIG SURVEY
          QUESTIONNAIRE
        ALABAMA
            Title I                                  Yes                      5 years
            Special Education                        Yes                      5 years
            Vocational Education                     Yes                      5 years
        ARIZONA
            Title I                                  Yes                     4 years
            Special Education                        Yes                     6 years
            Vocational Education                     Yes                   20% per year
        ARKANSAS
                                                                                          2
            Title I                                  Yes                  Rotating Basis
            Special Education                        Yes                      3 years
            Vocational Education                     Yes                    3 - 4 years
        COLORADO
            Title I                                  Yes                      Annual
            Special Education                        Yes                      5 years
            Vocational Education                     Yes                      3 years
        LOUISIANA
             Title I                          In Development             To Be Established
                                                                                 3
             Special Education                      Yes
             Vocational Education              Being Revised                  5 years
        NEBRASKA
                                                                                     4
             Title I                                 Yes                     3 years
             Special Education                       Yes                     5 years
             Vocational Education                    Yes                     2 years
        NEW MEXICO
             Title I                                 Yes                      3 years
             Special Education                       Yes                      3 years
             Vocational Education                    Yes                      3 years
        NEW YORK
             Title I                                 Yes                      5 years
                                                                                 5
             Special Education                       Yes
                                                                                 6
             Vocational Education                    Yes
        NORTH DAKOTA
             Title I                                 Yes                      5 years
             Special Education                       Yes                      5 years
             Vocational Education                    Yes                      5 years
        WYOMING
             Title I                                Yes                      5 years
             Special Education                      Yes                      5 years
             Vocational Education               No response                No response



2
  Rotating basis, number of visits vary based on funding restraints.

3
  One-third of LEAs each year, based on LEA performance.

4
  Largest LEAs are visited annually.

5
  No cycle, LEAs are visited based on performance.

6
  No cycle, LEAs are visited as needed.



                                                  10
State Monitoring of Formula Grants    ED-OIG/A04-B0008


                                                                                    APPENDIX
                                                                                      Page 3 of 3


                                           Table 3


        GAO SURVEY and
        REPORT on the
        TITLE I PROGRAM7
            Congress requested that GAO examine the implications of the 1994
            changes to the Title I program. The objectives of the study included
            describing how States and the Federal government exercise general
            oversight for the Title I program. GAO surveyed the Title I Directors in
            all 50 States to obtain information on how they monitor the Title I
            program at the district and school levels. In regards to monitoring, GAO
            reported that States varied considerably in the frequency and focus of
            their efforts to monitor compliance with Title I requirements and to
            oversee program quality. GAO reported that some States approach
            their oversight process from a technical assistance rather than strictly a
            compliance perspective. The average time between visits ranged from 2
            years or less to more than 7 years. Three States reported that they
            made no on-site visits and three indicated that they visited all their
            school districts each year.




7
  General Accounting Office (GAO) report titled Title I Program – Stronger Accountability Needed
for Performance of Disadvantaged Students, dated June 2000. Report number GAO/HEHS-00­
89.


                                                11
                                                                                      Attachment A

             UNITED STATES DEPARTMENT OF EDUCATION
                OFFICE OF ELEMENTARY AND SECONDARY EDUCATION

                                                                         THE ASSISTANT SECRETARY




MEMORANDUM                                                             OCT    6200J
To: 	   Lorraine Lewis
        Inspector General

From: 	 Susan B. Neuman, Ed.D.             }l1~ J..-   r(lou,., h...
Subject: Draft Audit Report: State Monitoring of Formula Grants - A04-B0008

I am responding to the recommendations included in the Draft Audit Report at
page 6. My response incorporates the comments of two other principal offices
as well as the Office of Elementary and Secondary Education (OESE): the Office
of Vocational and Adult Education (OVAE) and the Office of Special Education
Programs (OSEP).

"We recommend that Department program officials, in their monitoring and
oversight efforts encourage State program offices to:

1.1 Establish better coordination between State program offices and State offices
    performing or receiving LEA Single Audits, and offices resolving the audit
    findings."

All three offices concur with this recommendation even though none of our
authorizing statutes require State program offices to conduct this type of
coordination. We all believe that better coordination will enhance the
implementation of our programs. OVAE will incorporate the recommendation
into the monitoring process scheduled to begin in January 2002. As OESE
reconsiders its monitoring activities, I have asked my senior staff to include this
recommendation.

1.2 "Track and analyze single audit findings and site visit results to identify
    trends and develop monitoring and technical assistance strategies to reduce
    occurrences of similar problems."




                 400 MARYLAND AVE.• S.W.   WASHINGTON. D.C. 20202-6100
Page 2 - Lorraine Lewis

All three offices concur with this recommendation even though none of our
authorizing statutes require State program offices to conduct this type of activity.
We all believe that better tracking and analysis of audit findings will enhance the
implementation of our programs. OVAE will incorporate the recommendation
into the monitoring process scheduled to begin in January 2002. As OESE
reconsiders its monitoring activities, I have asked my senior staff to include this
recommendation.

Please note that there is a typographical error on page 2, paragraph 1, last line.
The reference to the law should read: "The Individuals with Disabilities Education
Act."

If you have any questions about this response, please contact Delores Warner of
my staff on 202-260-1941.
                                REPORT DISTRIBUTION LIST 

                                    ED-OIGIA04-B0008 


                                                                                      No. of
                                                                                     Copies
Action Official

Susan B. Neuman, Ed.D.
Assistant Secretary
Office of Elementary and Secondary Education                                             1

Collateral Action Officials

Assistant Secretary
Office of Special Education and Rehabilitative Services                                  1

Assistant Secretary
Office of Vocational and Adult Education                                                 1


Other ED Officials

The Deputy Secretary                                                                     1
The Under Secretary                                                                      1
Chief of Staff, Office of the Secretary                                                  1
Assistant Secretary, Office of Intergovernmental and Interagency Affairs                 1
Office of General Counsel                                                                1
Director, Office of Public Affairs                                                       1
Supervisor, Post Audit Group, Office of the Chief Financial Officer                      1
Director, Program Legal Group, Office for Civil Rights                                   1


Office of Inspector General                                                (Electronic Copy)

Inspector General                                                                       1
Deputy Inspector General                                                                1
Counsel to the Inspector General                                                        1
Assistant Inspector General for Audit Services                                          1
Assistant Inspector General for Investigative Services                                  1
Director, Advisory and Assistance, State and Local Team                                 1
Regional Offices                                                                   1 each