UNITED STATES DEPARTMENT OF EDUCATION OFFICE OF INSPECTOR GENERAL THE INSPECTOR GENERAL SEP 25 2001 MEMORANDUM TO: Carol D' Amico Assistant Secretary Office of Vocational and Adult Education FROM: SUBJECT: FINAL AUDIT REPORT The Division of Vocational- Technical Education's Monitoring of Formula Grants Control No. ED-OIG/AO4-BOOlO This Final Audit Report presentsthe results of our review of the Division of Vocational -Technical Education's Monitoring of Formula Grants. The objective of our audit was to determine if the Office of Vocational and Adult Education (OV AB), Division of Vocational- Technical Education (DVTE) was monitoring vocational education formula grants for compliance with appropriate laws and regulations. A draft of this report was provided to OV AB for comments. In their response,OV AB concurred with the recommendations. We have summarized OV AB's responseafter the recommendation section of the report. A complete copy of the responseis provided as an attachment to the report. A UD IT RESUL TS In Fiscal Year (FY) 1999, new legislation was introduced for Perkins fonnula grants (Perkins III). At that time, the DVTE did not have a monitoring system in place and it was not conducting on-site monitoring visits. In FY2000, the DVTE developed a State monitoring system that focuses on compliance and other aspectssuch as educational refonn and interagency cooperation in the delivery of vocational educational services. Under DVTE's monitoring system, on-site reviews are conducted by a five member team. The compliance aspectsof the reviews include fiscal issues, administration, local applications, and special populations. We followed up with the DVTE to ascertainthe current status of its monitoring of formula grants. As of February 28,2001, the DVTE had performed four on-site reviews and issued two reports. Additionally, the DVTE had scheduled six on-site reviews for the remainder ofFY2001. The DVTE also plans to visit eight Statesin FY2002. The 400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202-151 Our mission is to ensure equal access to education and to promote educational excellence throughout the Nation. DVTE has achieved staffing goals outlined in its FY2000 proposal and it has conducted the number of reviews planned for FY2000. The DVTE has also made progresstoward completing the number of on-site reviews planned for FY 2001. Currently, the DVTE has developed a draft monitoring instrument, which includes a checklist to monitor compliance items. However, the DVTE has not yet developed written procedures covering all aspects of its on-site reviews. To ensure continuity in its reviews, the DVTE should formalize its monitoring process by writing a procedures manual for its on-site reviews that includes all aspects of its monitoring process. As part of our review, we surveyed the States' monitoring of sub-recipients of vocational education formula grants. The Education Department General Administrative Regulations (EDGAR), found in 34 CFR, §SO,contain provisions requiring Statesto monitor sub-recipients to ensure compliance with applicable Federal requirements. As a result of our on-site visits to three States and the responsesto questionnaires we sent to ten States,we concluded that State program officials are monitoring vocational education formula grant sub-recipients in accordancewith applicable existing statutory andfegulatory provisions. Currently, there are no specific laws or regulations that require a particular monitoring method or prescribe the frequency of monitoring activities. Therefore, we did not evaluate the monitoring methods used by the various States. A DVTE official stated that the DVTE does look at a State to seeif there is a process in place for sub-recipient monitoring, but it does not perform any in depth review of the State's sub-recipient monitoring. Therefore, the DVTE should, as part of its federal monitoring of the States,determine whether States' monitoring is sufficient to comply with provisions contained in EDGAR. We encouragethe DVTE to continue its current monitoring processin order to ensure adequateoversight of vocational education formula grants for compliance. RECOMMENDA TIONS We recommend that the Assistant Secretary of the Office of Vocational and Adult Education: 1 Formalize DVTE's new monitoring processby writing a proceduresmanual for its on-site reviews that includes all aspectsof its monitoring process,and 2. Determine as a part of the monitoring process whether the States' monitoring of sub- recipients is sufficient to comply with EDGAR provisions. 2 AUDITEE'S RESPONSE The Office of Vocational and Adult Education concurs with the two recommendations, and agrees that they represent a means to strengthen the DVTE on-site monitoring process. In response to the first recommendation, DVTE has already taken steps to develop a procedures manual that outlines all aspects of the monitoring process. While various portions of a State's monitoring efforts are evaluated in DVTE's current monitoring process, a more formal analysis of a State's implementation of EDGAR's monitoring requirements can be easily included as part of the on-site monitoring initiative. OV AB anticipates that the two recommendations will be integrated into the DVTE monitoring process with the advent of its monitoring visits scheduled for 2002. BACKGROUND The Division of V ocational-Technical Education administers the Carl D. Perkins Vocational and Technical Education Act, which provides formula grants to state agenciesto help provide vocational-technical education programs and services to youth and adults. In 1998, the Carl D. Perkins Vocational and Technical Education Act of 1998 (Perkins ill) was signed into law. The central goals of this law are to improve student achievement and to prepare students for postsecondaryeducation, further learning, and careers. Vocational Education formula grants received an appropriation of approximately $1 billion dollars in FY2000. There are no statutory or regulatory provisions directing the Department to monitor State compliance with the Perkins ill programs. However, the Department has an implicit obligation to ensure that recipients of funds under Elementary and Secondary Education programs comply with applicable statutory and regulatory requirements. This obligation is further supported by 0MB Circular A-133, which requires Federal agenciesto monitor non-Federal entities' use of Federal awards. OBJECTIVE, SCOPE, AND METHODOLOGY The objective of our audit was to determine whether the DVTE was monitoring vocational education formula grant programs for compliance with appropriate laws and regulations. In order to determine this, we: . researchedand summarized laws and regulations applicable to DVTE formula grant monitoring, . interviewed staff at the DVTE office to obtain a clear understanding of the type of monitoring performed and its current monitoring approach, 3 . obtained and reviewed DVTE's written monitoring proposal, . conducted site visits to three States to interview State vocational education program officials and State audit officials to determine the level of monitoring for compliance regulations, and 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, which included State vocational education offices. The original audit period was limited to fiscal year 2000. Additionally, we conducted a follow up interview with a DVTE official on February 26,2001 to ascertain the current status ofDVTE's monitoring. We are therefore reporting on the status of the DVTE's monitoring for FY2000 and FY2001. The scope of our audit included only formula grants authorized by Perkins ill. We did not review Adult Education programs. We conducted an on-site visit to DVTE offices and held interviews with DVTE personnel in Washington, DC on March 28, 2000 and during the week of May 8,2000. We conducted site visits to the Statesof 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 in accordancewith government auditing standardsapplicable to the scope of the review described above. STA TEMENT ON MANAGEMENT CONTROLS Our review was limited to the objective of the audit, which was to determine if the Department's program offices were monitoring vocational education formula grant programs for compliance with appropriate laws and regulations. Since the DVTE was in the process of developing its monitoring system for vocational education formula grant programs, we decided not to perform any additional audit work. Therefore, we did not assessthe DVTE's systems of managementcontrols over its monitoring activities. ADMINISTRA TIVE MA TTERS Statementsthat 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 accordancewith the Freedom of Information Act ( 5 U.S.C. § 552), reports issued by the Office of Inspector General are available, if requested,to members of the press and general public to the extent information contained therein is not subject to the exemptions of the Act. 4 Copies of this audit report have been provided to the offices shown on the distribution list enclosed in the report. Pleaseprovide the Supervisor, Post Audit Group, Office of the 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. We appreciate the cooperation given us in this review. If you have any questions, please call Carol Lynch, Regional Inspector General for Audit, at (404) 562-6462. Please refer to the control number in all correspondence related to the report. Attachment 5 -)' Attachment UNITED STATES DEPARTMENT OF EDUCATION OFFICE OF VOCATIONAL AND ADULT EDUCATION AUG 2 8 2001 MEMORANDUM TO: Lorraine Lewis Inspector General FROM: Robert D. Deputy SUBJECT: DRAFT AUDIT REPORT The Division ofVocational-Technical Education's Monitoring of Formula Grants Control No. ED-OIG/AO4-BOOlO This memorandum is a responseto the draft audit report (Control No. ED-OIG/ A04- BO010) issued by your office on July 23,2001. This report presentsthe results of your review of the Division of Vocational and Technical Education's (DVTE's) monitoring effort of Federal Perkins funds flowing to State and local recipients. This audit not only reviewed DVTE's monitoring procedures,but also assessedthe degree to which ten Statesimplemented the monitoring requirements of section 34 CFR 80.40. This draft report concludes with two recommendationsto strengthenthe DVTE monitoring process, namely . Fonnalize DVTE's monitoring processby developing a procedures manual for on-site reviews that includes all aspectsof the monitoring process, and . Detennine as part of the monitoring processwhether State monitoring of subrecipients is sufficient to comply with the EDGAR provisions. The Office of Vocational and Adult Education concurs with these two recommendations, and agreesthat they represent a meansto strengthenthe DVTE on-site monitoring process. In responseto the first recommendation, DVTE has already taken stepsto develop a procedures manual that outlines all aspectsof the monitoring process. This manual is moving towards a final draft state. While various portions of a State's monitoring efforts are evaluated in DVTE's current monitoring process, a more formal analysis of a State's implementation of EDGAR's 400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202 www.ed.gov Our mission is to ensure equal access to education and to promote educational excellence throughout the Nation. monitoring requirements can be easily included as part of the on-site monitoring initiative. We anticipate that the two recommendations will be integrated into the DVTE monitoring process with the advent of our monitoring visits scheduled for FY 2002. Should you have further question, please call Ron Castaldi, Director, Division of Vocational and Technical Education, at (202) 205-9444. REPORT DISTRIBUTION LIST CONTROL NUMBER ED-OIG/AO4-BOOlO No. of Copies Action Official Carol D' Amico Assistant Secretary Office of Vocational and Adult Education Other ED Officials Director, Office ofVocational-Technical Education General Counsel, Office of General Counsel Assistant Secretary, Office of Intergovernmental and Interagency Affairs Chief of Staff, Office of the Secretary Under Secretary Deputy Secretary Supervisor, Post Audit Group, Office of the Chief Financial Officer 1 Director, Office of Public Affairs 1 Audit Liaison, Office ofVocational and Adult Education 1 Office of Insvector General (Electronic Copy) Inspector General Deputy Inspector General Counsel to the Inspector General Assistant Inspector General for Audit Services Assistant Inspector General for Investigative Services Deputy Assistant Inspector General for Audit Services Director, State & Local Advisory & Assistance 1 Regional Offices 1 each
Review of the Division of Vocational-Technical Education's Monitoring of Formula Grants.
Published by the Department of Education, Office of Inspector General on 2001-09-25.
Below is a raw (and likely hideous) rendition of the original report. (PDF)