oversight

Georgia Department of Education's Administration of Title I, Part A of the Elementary and Secondary Education Act of 1965.

Published by the Department of Education, Office of Inspector General on 2004-11-08.

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

                      UNITED STATES DEPARTMENT OF EDUCATION

                                   OFFICE OF INSPECTOR GENERAL

                                       61 FORSYTH STREET, ROOM 18T71 

                                           ATLANTA, GEORGIA 30303


       Telephone: (404) 562-6470                                            Fax: (404) 562-6509

                                       November 8, 2004

MEMORANDUM

TO:            Raymond J. Simon
               Assistant Secretary
               Office of Elementary and Secondary Education

FROM:          J. Wayne Bynum        J. Wayne Bynum
               Regional Inspector General for Audit
               Office of Inspector General

SUBJECT:       FINAL AUDIT REPORT
               Georgia Department of Education’s Administration of Title I, Part A of the
               Elementary and Secondary Education Act of 1965
               Control No. ED-OIG/A04-E0002


You have been designated as the action official for the resolution of the findings and
recommendations in the attached final report. We also provided a copy to the auditee and to
your audit liaison officer.

The Office of Inspector General is required to review and approve your proposed Program
Determination Letter (PDL) and the Audit Clearance Document (ACD) before the PDL is
forwarded to the auditee. Our review of these documents will be handled through the
Department’s Audit Accountability and Resolution Tracking System (AARTS).

In accordance with the Inspector General Act of 1978, as amended, the Office of Inspector
General is required to report to Congress twice a year on the audits that remain unresolved after
six months from the date of issuance.

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

If you have any questions, please contact me at 404-562-6477 or Assistant Regional Inspector
General Mary Allen at 404-562-6465.


Enclosure
                        UNITED STATES DEPARTMENT OF EDUCATION 

                                          OFFICE OF INSPECTOR GENERAL

                                               61 FORSYTH STREET, Room 18T71

                                                   ATLANTA, GEORGIA 30303




Telephone: (404) 562-6470                                                                                   Fax: (404) 562-6509

                                                         November 8, 2004


     Kathy Cox 

     State Superintendent of Schools 

     Georgia Department of Education 

     2066 Twin Towers East 

     Atlanta, Georgia 30334-5001 



     Dear Ms. Cox:

     This Final Audit Report, Control Number A04-E0002, presents the results of our audit of the
     Georgia Department of Education’s (GDOE) allocation of Elementary and Secondary Education
     Act of 1965, as amended (ESEA),1 Title I, Part A (Title I) funds to local educational agencies
     (LEAs) and selected LEAs’ allocations to schools. Audit coverage included the period July 1,
     2002, through June 30, 2004 (award years 2002-2003 and 2003-2004). Our audit focused on
     GDOE’s allocation of Title I funds to LEAs for award years 2002-2003 and 2003-2004, and
     selected LEAs’ allocations to schools for award year 2002-2003.

     Our objective was to determine whether GDOE allocated Title I funds in accordance with Title I
     of the ESEA, governing regulations, and U.S. Department of Education (ED) guidance. To meet
     this objective, we (1) determined whether GDOE properly followed Title I regulations and
     guidance for setting aside Title I funds received from ED for State administration and school
     improvement and making final grant allocations to LEAs, (2) determined whether selected LEAs
     allocated Title I funds to the schools with the highest percentages of poor children (in rank
     order), (3) determined whether only eligible schools received Title I funds, (4) determined
     whether the proper poverty measures were used and that lower poverty schools did not receive
     higher per-pupil allocations than higher poverty schools, and (5) verified that the data used by
     the LEAs to identify and count eligible poverty children was consistent and inclusive.


                                                    AUDIT RESULTS 


     GDOE did not maintain adequate documentation regarding its calculation of set-aside funds and
     funds allocated to LEAs. We used alternative audit procedures to determine the accuracy of
     GDOE’s calculations for these funds for the 2002-2003 school year. We determined that GDOE

     1
      The Elementary and Secondary Education Act of 1965 was amended by the No Child Left Behind Act of 2001,
     enacted January 8, 2002.


     Our mission is to promote the efficiency, effectiveness, and integrity of the Department’s programs and operations.
calculated Title I set-aside funding and allocated LEA funding correctly; however, GDOE did
not maintain supporting documentation of how it (1) determined the amount of set-aside funds
for school improvement and State administration and (2) allocated funds to the LEAs for award
year 2002-2003. We also found that GDOE’s Title I allocation guidelines need to be updated to
comply with Title I regulations, and that GDOE’s procedures were not adequate for reviewing
Title I related findings identified during monitoring visits and audits of LEAs.

We also found that the 10 LEAs selected for review allocated Title I funds to schools with the
highest percentages of poor children (in rank order), allocated Title I funds to only eligible
schools, used proper poverty measures to ensure that lower poverty schools did not receive
higher per-pupil allocations than higher poverty schools, and used consistent and inclusive data
to identify and count eligible poverty children. However, we found the source documentation for
one LEA did not support the poverty count data that it used to allocate Title I funds to schools.

In its response to our draft audit report, GDOE concurred with the findings and
recommendations. We have included GDOE’s response in its entirety as an attachment.

FINDING No. 1 – 	GDOE Management Controls Over Supporting Documentation for
                 Set-Aside Funds and Allocation of Funds to LEAs Need Strengthening

GDOE did not maintain adequate supporting documentation of how it (1) set aside Title I funds
used for school improvement and State administration and (2) made final Title I grant allocations
to LEAs for the 2002-2003 school year. A former employee had deleted the Title I allocation
calculation spreadsheets. As a result, GDOE did not have documentation to support its Title I
allocations for school year 2002-2003. In addition, GDOE's Title I allocation guidelines were
missing some required procedures contained in ED’s Title I allocation guidance that prescribe
how to properly set aside and allocate Title I funds. The GDOE guidelines had not been updated
to reflect the changes for the 2003-2004 school year. As a result, the GDOE management
controls were inadequate to ensure that its staff followed adequate guidance to properly calculate
Title I set-aside funds and allocations to LEAs.

The regulations at 34 C.F.R. §76.730, the State-administered program regulations, state:

      A State and a subgrantee shall keep records that fully show:
      (a) The amount of funds under the grant or subgrant;
      (b) How the State or subgrantee uses the funds;
      (c) The total cost of the project;
      (d) The share of that cost provided from other sources; and
      (e) Other records to facilitate an effective audit.

The State-administered program regulation at 34 C.F.R. §76.731 states, “A State and a
subgrantee shall keep records to show its compliance with program requirements.”

Also, 20 U.S.C. §1232f states “Each recipient of Federal funds under any applicable program
through any grant, subgrant, cooperative agreement, loan, or other arrangement shall keep
records which fully disclose the amount and disposition by the recipient of those funds, the total
cost of the activity for which the funds are used, the share of that cost provided from other


ED-OIG/A04-E0002                        FINAL REPORT 	                        Page 2 of 21
sources, and such other records as will facilitate an effective financial or programmatic audit.
The recipient shall maintain such records for three years after the completion of the activity for
which the funds are used.”

ED issued final regulations on December 2, 2002, that govern Title I allocations to LEAs;
procedures for within-district allocations; and reservation of funds at the State level for school
improvement, State administration, and State academic achievement awards (34 C.F.R.
§§200.70-200.78, 200.100). ED also issued guidance on May 23, 2003, entitled "State
Educational Agency Procedures For Adjusting Basic, Concentration, Targeted, and Education
Finance Incentive Grant Allocations Determined by the U.S. Department of Education." This
guidance covered the 2003-2004 school year. Previously, in June 1999, ED issued guidance
entitled "School Year 1999-2000 State Educational Agency Procedures for Adjusting Basic and
Concentration Grant Allocations Determined by the U.S. Department of Education" which
covered the 2002-2003 school year (expired October 31, 2002) to the extent the guidance was
consistent with the requirements in Subpart 2 of Title I, as amended by the No Child Left Behind
Act of 2001.

Maintenance of Documentation
Our analysis showed that GDOE correctly calculated Title I set-aside funds and allocated funds
to LEAs correctly for both award years that we reviewed. However, GDOE did not maintain
supporting documentation for award year 2002-2003. During award year 2002-2003, GDOE
went through a change in administration as a result of State elections. GDOE officials stated that
a former employee prepared the allocation spreadsheets with detailed calculations that
documented how GDOE set aside Title I funds to be used for school improvement and State
administration and reallocated Title I funds to LEAs for the 2002-2003 school year. The
officials said the former employee deleted the files and no copy could be located.

GDOE did not maintain a copy of the allocation spreadsheet files and officials were not familiar
with how the Title I set-aside funds and final grant allocations to LEAs were calculated for the
2002-2003 award year. Without adequate documentation to review, we used alternative audit
procedures to determine the accuracy of GDOE’s calculations for set-aside funds and to allocate
funds to the LEAs for the 2002-2003 school year. We determined that the set-aside funds and
LEA allocations for the 2002-2003 award year were reasonable and consistent as a percentage
(varied by three percent or less) of the total set-aside funds or allocations made to LEAs for the
2003-2004 award year.

For award year 2003-2004, GDOE hired a consultant who prepared the allocation and developed
the spreadsheets showing how funds were allocated for set-asides and LEA allocations. GDOE
officials stated that the responsibility for preparing the yearly allocation had been assigned to a
budget analyst in GDOE’s finance office and that the budget analyst and Title I Director will
maintain documentation of how the Title I funds are allocated.

Updated Guidelines
GDOE's written Title I allocation guidelines had not been updated to comply with the most
recent allocation requirements contained in ED's allocation guidelines and regulations, and the
No Child Left Behind Act of 2001. For example, in fiscal years 2002 and 2003, Section 1003 of



ED-OIG/A04-E0002                        FINAL REPORT                           Page 3 of 21
the ESEA required each State educational agency to reserve 2 percent (increasing to 4 percent in
fiscal year 2004 and beyond) of the amount received from ED under Title I, Part A for school
improvement activities. However, GDOE's written Title I allocation procedures stated that a
maximum of 0.5 percent of the funds received from ED would be used to set aside funds for
school improvement activities. The GDOE guidelines had not been updated to reflect the
changes for the 2002-2003 and 2003-2004 school years.

Without up-to-date Title I allocation procedures and guidelines that comply with ED's
requirements, GDOE did not have adequate management controls in place to ensure that its staff
followed adequate guidance to properly calculate Title I set-aside funds and allocations to LEAs.
GDOE officials said that they plan to assign a specific individual the responsibility, in
conjunction with the Title I Director, for updating the Title I guidelines.

In the future, GDOE needs to have readily available documentation and staff to demonstrate that
the Title I program set-aside funds and allocations made to LEAs were prepared accurately.
Adequate documentation of the prior years allocations and written policies and procedures that
are up-to-date with ED’s regulations would help ensure effective continuity of operations and
management controls over the Title I program in accordance with Title I regulations.

RECOMMENDATIONS

We recommend that the Assistant Secretary for the Office of Elementary and Secondary
Education require GDOE to:

1.1 	 Implement controls to maintain and safeguard the documentation for setting aside Title I
      funds for State administration and school improvement, and making final Title I grant
      allocations to LEAs.

1.2 	 Develop up-to-date written procedures and guidelines that comply with Title I allocation
      requirements.

GDOE RESPONSE AND OIG COMMENTS

GDOE concurred with the finding and stated that corrective action will be implemented by
December 31, 2004. We reviewed GDOE’s planned corrective action to address the
recommendations. We agree that the corrective actions, if fully implemented, should help
GDOE improve controls over Title I funds.

FINDING No. 2 – GDOE Procedures for Monitoring Title I Related Findings Identified
                During LEA Monitoring Visits and in Audit Reports Need
                Strengthening

GDOE did not have adequate procedures in place to obtain copies of LEA monitoring reports
that identified Title I related findings. As a result, GDOE was unaware of monitoring findings
related to inaccurate counts of eligible students. In addition, the same Title I finding was
repeatedly identified in three OMB Circular A-133 audit reports of an LEA. Although GDOE



ED-OIG/A04-E0002                       FINAL REPORT 	                        Page 4 of 21
monitored approximately a fourth of the LEAs during the 2002-2003 school year, tracking Title I
findings identified from monitoring site visits and audit reports would help GDOE target LEAs
that are having problems implementing their Title I program in accordance with the Title I
regulations.

The regulations at 34 C.F.R. §80.40 state that “[g]rantees are responsible for managing the day-
to-day operations of grant and subgrant supported activities. Grantees must monitor grant and
subgrant supported activities to assure compliance with applicable Federal requirements and that
performance goals are being achieved. Grantee monitoring must cover each program, function
or activity.”

Office of Management and Budget (OMB) Circular A-133, section 400(d), Pass-through entity
responsibilities, states that a pass-through entity (such as GDOE) shall monitor the activities of
subrecipients as necessary to ensure that Federal awards are used for authorized purposes in
compliance with laws, regulations, and the provisions of contracts or grant agreements and that
performance goals are achieved.

Monitoring Site Visits
GDOE’s School Nutrition Office (School Nutrition) performed reviews at various LEAs to
review free and reduced-price meal applications. School Nutrition reviewed Atlanta Public
Schools’ (APS) school nutrition office for the past five years and found that APS made
inaccurate counts of eligible students for the free and reduced-price meal counts. APS used the
number of children eligible for free and reduced-priced meals to identify eligible school
attendance areas and to determine the ranking of each school. There were many findings
regarding APS’ eligible student counts in the reports issued by School Nutrition. GDOE Title I
officials indicated that they did not receive copies of the monitoring reports prepared by School
Nutrition and were not aware of these findings from previous years.

Of 180 LEAs that received Title I funds during the 2002-2003 school year, GDOE’s Title I
office performed monitoring visits at approximately 45 LEAs during the school year. GDOE’s
Title I office performed a monitoring visit at APS on May 11, 2004. GDOE had not conducted a
monitoring visit to APS in the two years prior to that visit. Since LEAs use free and reduced-
price meal eligibility as a basis for allocating Title I funds, GDOE should review findings
identified by School Nutrition and Title I staff to identify LEAs, like APS, who may not be using
complete and accurate data for their allocations.

A-133 Audit Reports
For the past three school years, the A-133 audit reports for the Dougherty County Board of
Education (DCBE) identified problems regarding the Title I program. For school year 2000-
2001, the A-133 audit report stated that DCBE did not provide accurate documentation to
support the determination of eligible and participating attendance areas and school allocations for
the 2001 Title I program. The audit report stated that this condition was the result of DCBE’s
failure to maintain appropriate documentation for information required on the grant application.
The report recommended that DCBE establish procedures to ensure that applications are
complete and accurate and that proper documentation is maintained.




ED-OIG/A04-E0002                        FINAL REPORT                           Page 5 of 21
For school year 2001-2002, the A-133 audit report stated that DCBE’s 2002 Title I application
pertaining to the determination of eligible and participating attendance areas and school
allocations was deficient as follows:
• 	 183 private and home schooled children were not included as resident children on the
    application submitted to GDOE;
• 	 113 students from two schools, which were closed down between the time that the number of
    resident children was calculated and the time that the application was submitted to GDOE,
    were not allocated to the remaining eligible schools; and
• 	 562 poverty children were not included in the poverty children counts as reported on the
    application to GDOE.

The report stated that this condition was the result of DCBE’s failure to implement adequate
internal controls for monitoring compliance with Federal guidelines. The report recommended
that DCBE review the Federal compliance procedures in place, design procedures to enhance
monitoring compliance, and implement those procedures to strengthen the internal control over
Federal programs.

Our follow up with the DCBE and GDOE officials revealed that the same Title I finding will be
reported in the 2002-2003 A-133 audit report.

GDOE’s Financial Review Office (Financial Review) is responsible for collecting and tracking
the resolution of LEAs’ OMB Circular A-133 audit report findings. Financial Review provides
the LEAs’ corrective action plans to the GDOE Title I office for review and resolution of the
audit findings. LEA officials stated that the corrective action plan in response to the 2002-2003
audit was being prepared. GDOE officials stated that a visit to DCBE would be conducted to
determine if DCBE would be required to reallocate Title I funds.

ED Site Visit
In a program review performed in 2001, ED’s Title I program office found that GDOE did not
adequately monitor LEAs. Our review of GDOE’s monitoring guide indicated that
improvements were needed in several areas of the guide. GDOE officials said they were in the
process of revising the monitoring guide to include a procedure to obtain monitoring reports on
LEAs. Since GDOE only monitored a fourth of the LEAs, tracking the results of monitoring
visits and A-133 audit reports would aid in getting wider coverage of LEAs and identifying
LEAs that need technical assistance and training in implementing their Title I program.

RECOMMENDATIONS

We recommend that the Assistant Secretary for the Office of Elementary and Secondary
Education require GDOE to:

2.1 	 Obtain the results of monitoring site visits from its School Nutrition Office and OMB
      Circular A-133 audit reports when Title I related findings are identified at LEAs to
      determine common and recurring findings.




ED-OIG/A04-E0002                       FINAL REPORT 	                         Page 6 of 21
2.2 	 Use information learned from Title I related findings to identify the technical assistance
      and training needs for LEAs and monitor LEAs for corrective actions and compliance with
      Title I regulations.

2.3 	 Report the corrective action taken to resolve the A-133 audit findings for the past three
      years for the Dougherty County Board of Education.

GDOE RESPONSE AND OIG COMMENTS

GDOE concurred with the findings and recommendations. We reviewed GDOE’s planned
corrective action to address the recommendations and agree that the corrective action should help
GDOE improve its administration of the Title I program.

FINDING No. 3 – 	Poverty Student Count Data Used by Atlanta Public Schools (APS) to
                 Allocate Title I Funds Was Not Supported

For school year 2002-2003, we reviewed the supporting documentation for the total student
population count and poverty student count data used by APS to allocate Title I funds to schools.
We did not identify any discrepancies in the total student population count data used by APS on
their Title I application. However, the poverty student count data used by APS to allocate Title I
funds to schools was not supported by source documentation.

Pursuant to the No Child Left Behind Act of 2001 (NCLB), Title I, Part A, §1113(a)(5), “the
local educational agency shall use the same measure of poverty, which measure shall be the
number of children ages 5 through 17 in poverty counted in the most recent census data approved
by the Secretary, the number of children eligible for free and reduced priced lunches under the
Richard B. Russell National School Lunch Act, the number of children in families receiving
assistance under the State program funded under part A of title IV of the Social Security Act, or
the number of children eligible to receive medical assistance under the Medicaid program, or a
composite of such indicators, with respect to all school attendance areas in the local educational
agency to (a) identify eligible school attendance areas; (b) determine the ranking of each area;
and (c) determine allocations under subsection (c).”

Pursuant to NCLB, Title I, Part A, §1113(c)(1), “A local educational agency shall allocate funds
received under this part to eligible school attendance areas or eligible schools, identified under
subsections (a) and (b), in rank order, on the basis of the total number of children from low-
income families in each area or school.”

Pursuant to 20 U.S.C. §1232f, "Each recipient of Federal funds under any applicable program
through any grant, subgrant, cooperative agreement, loan, or other arrangement shall keep
records which fully disclose the amount and disposition by the recipient of those funds, the total
cost of the activity for which the funds are used, the share of that cost provided from other
sources, and such other records as will facilitate an effective financial or programmatic audit.
The recipient shall maintain such records for three years after the completion of the activity for
which the funds are used."




ED-OIG/A04-E0002                        FINAL REPORT 	                         Page 7 of 21
We selected a random sample of 10 of the 88 schools that APS provided Title I funding to during
the 2002-2003 school year and reviewed the supporting documentation. We reviewed the
individual school rosters maintained by the APS School Nutrition Office, which according to
school nutrition officials was the supporting documentation for the poverty figures used on the
Title I application. The rosters showed the students who were eligible for free and reduced-price
meals. We compared the total number of students classified as eligible for free and reduced-
price meals on the school rosters with the total number of students classified as eligible for free
and reduced-price meals on APS’ Free and Reduced Price Meal Eligibility – October 2001
report. For all 10 schools, APS reported a greater number of poverty students on its Title I
application than the number shown on the individual school rosters. APS reported between 61 to
196 more poverty students on the Title I allocation calculation than supported by the school
rosters. APS used this report to prepare its Title I application.

In addition to the review of the school rosters, we randomly selected 2 of the 10 APS sampled
schools and compared the total number of students determined eligible for free and reduced-price
meals on the free and reduced-price meal applications maintained by the APS School Nutrition
Office with the total number of students reported as eligible for free and reduced-priced meals on
APS’ Title I application. Both schools showed a higher number of poverty students on the Title I
application than was supported by the free and reduced-price meal applications. APS reported
79 more poverty students for one school and 223 more poverty students for another school on the
Title I allocation calculation than supported by the free and reduced-price meal applications.

The APS Title I office used the Georgia Department of Education Free and Reduced Price Meal
Eligibility – October 2001 Report as the source for the count of the poverty students and total
student population used in their Title I application sent to GDOE. This report was downloaded
from the GDOE web site. The APS School Nutrition Office was responsible for approving and
maintaining the free and reduced-price meal applications and the individual school rosters that
document the poverty students. Officials from the APS Title I office did not verify poverty
figures to make sure they were supported and correct prior to using them in the Title I allocation.

The School Nutrition Office was responsible for reviewing, approving, and maintaining the
supporting documentation for the poverty figures reported. For 2 of the 10 sample schools, we
requested actual free and reduced-price meal applications from the School Nutrition Office. The
School Nutrition Office for APS did not maintain adequate supporting documentation for the
poverty figures reported. Free and reduced-price meal applications did not support the number
of poverty students claimed. Also, APS officials said the student poverty data stored in APS’
computer system for the audit period was lost due to a computer crash and was unrecoverable.
As a result, APS did not have any electronic support for the poverty figures reported.

For the last five years, the Georgia School Nutrition Office performed reviews of the poverty
figures reported by the APS School Nutrition Office and found that APS made inaccurate counts
of eligible students for the free and reduced-price meal counts.

APS funded 88 of the 92 schools in the district with Title I funds according to their Title I
allocation. These 88 schools received a total of $27,042,000 in Title I funds. We reviewed
supporting documentation for the total student population and poverty children used in the Title I



ED-OIG/A04-E0002                        FINAL REPORT                           Page 8 of 21
allocations for 10 of these 88 schools. These 10 schools were allocated a total of $3,563,615 in
Title I funds. Table 3.1 below shows the amount of Title I funds allocated to all 10 schools in
our sample.

APS allocated Title I funds to the schools based on a ranking percentage of poverty students.
For example, schools with poverty percentages between 100 and 98.35 percent received $825 per
pupil and schools with poverty percentages between 98.34 and 97.50 percent received $740 per
pupil. APS funded schools down to the 44.09 percent poverty level. The lowest per pupil
amount was $400. The amount a school received was based on its percentage ranking.

Using the count of poverty students shown on the school rosters, we recalculated the poverty
percentages for the 10 schools in our sample. The difference in the recalculated poverty
percentages ranged from 18.67 percent to 33.15 percent lower than the poverty percentages on
the Title I application. Our review of the supporting free and reduced-price meal applications
maintained by the School Nutrition Office further showed that the poverty level reported by APS
was not adequately supported. The poverty percentages for all 10 schools in our sample were
overstated. Table 3.1 below illustrates the differences in the poverty percentages used on APS’
Title I application and those calculated by the audit team using available supporting
documentation. As a result, some schools may have been allocated less and other schools may
have been allocated more Title I funds than they should have received.

Table 3.1 -- Differences in Poverty Counts and Percentages in Title I Application and
             Poverty Counts and Percentages Supported by Documentation
                  Poverty                       Poverty      Poverty        Percent
                 Students                       Percent      Percent       Difference
                According to                  According     Calculated    (Application    Title I Funds
                Supporting        Total        to Title I       by         Less OIG       Allocated to
School Name    Documentation    Enrollment    Application     OIG         Calculation)       Schools
Hill
Elementary           328            471         94.48%       69.64%          24.84%         $300,375
Sylvan
Middle               373            619         91.92%       60.26%         31.66%          $384,075
Adamsville           244            371         98.92%       65.77%         33.15%          $302,775
F.L. Stanton         241            337         99.41%       71.51%         27.90%          $276,375
Price Middle         623            841         92.87%       74.08%         18.79%          $527,175
Long Middle          595            857         88.10%       69.43%         18.67%          $434,125
Lakewood             270            343         99.71%       78.72%         20.99%          $282,150
Slater               252            319         98.12%       79.00%         19.12%          $231,620
Thomasville          448            618         94.34%       72.49%         21.85%          $393,525
Bethune              462            597         97.65%       77.39%         20.26%          $431,420
                                                                          Total Funds
                                                                           Allocated       $3,563,615

Based on our finding that the poverty percentages for all 10 schools we reviewed were
overstated, it is likely that the $3,563,615 in Title I allocations to these schools was incorrect. In
addition, if the Title I allocations to all 10 schools in our sample are incorrect, it is likely that
APS incorrectly allocated the $27 million to the 88 schools that received Title I funds.




ED-OIG/A04-E0002                          FINAL REPORT                           Page 9 of 21
To determine the actual dollar effect of APS using incorrect poverty counts, APS would need to
determine the correct poverty counts and percentages for all 92 schools on its Title I application
and rank all 92 schools in correct order to determine the amount of funds it should have allocated
to schools based on correct poverty percentages. The difference in the amounts allocated would
then identify which schools were allocated deficient or excessive Title I funds.

RECOMMENDATIONS

We recommend that the Assistant Secretary for the Office of Elementary and Secondary
Education require GDOE to:

3.1 	 Require APS to verify poverty figures submitted by its School Nutrition Office to GDOE
      prior to using the figures in the Title I allocation.

3.2 	 Require APS to recalculate its Title I allocation for the 2002-2003 school year and make
      reparations to the appropriate schools that did not receive the correct amount of Title I
      funds.

3.3 	 Require APS to maintain adequate documentation for the poverty figures used in the Title I
      allocation.

GDOE RESPONSE AND OIG COMMENTS

GDOE concurred with the findings and recommendations. We reviewed GDOE’s planned
corrective action to address the recommendations and agree that the corrective action should help
GDOE improve its administration of the Title I program.


                                     BACKGROUND 


The Title I program is authorized under the ESEA of 1965, as amended by the NCLB. Title I
grants are intended to help elementary and secondary schools establish and maintain programs
that will improve the educational opportunities of low-income and disadvantaged children. The
funds are intended to provide instruction and instructional support for these disadvantaged
children so they can master challenging curricula and meet State standards in core academic
subjects.

Title I funds are distributed from ED to States based primarily on poverty data provided by the
U.S. Bureau of the Census and State per pupil expenditure data. The State’s allocation is the
sum of the LEAs’ allocations as determined by ED. However, ED’s allocations are not the final
amounts the LEAs receive because the State must adjust the allocations to:

   ƒ   Reserve funds for State administration (up to 1 percent or $400,000, whichever is more)
       and for school improvement activities (2 percent for the 2002-2003 and 2003-2004
       school years and 4 percent for succeeding years); and


ED-OIG/A04-E0002                       FINAL REPORT 	                       Page 10 of 21
   ƒ   Account for changes in district boundaries, consolidations, creation of special districts
       such as charter schools or regional vocational/technical schools that are eligible for Title I
       funds but not reflected in ED’s allocations.

In distributing funds to schools, LEAs are subject to several restrictions. An LEA must
determine which school attendance areas are eligible to participate in Title I. A school
attendance area is generally eligible to participate if the percentage of children from low-income
families is at least as high as the percentage of children from low-income families in the LEA as
a whole or at least 35 percent. An LEA also may designate and provide Title I funds to a school
serving an ineligible attendance area if the percentage of children from low-income families
enrolled in that school is equal to or greater than the percentage of such children in a
participating school attendance area. When determining eligibility, an LEA must select a
poverty measure from among those specified in the statutes. The LEA must use the measure
consistently across the LEA to rank all school attendance areas according to their percentage of
poverty.

LEAs allocate funds to eligible schools or attendance areas in rank order according to their
poverty percentages. An LEA must serve those schools or areas above 75 percent poverty,
including any middle or high schools, before it serves any schools or areas with a poverty
percentage below 75 percent. Once all schools and areas above 75 percent poverty are served,
the LEA may serve lower-poverty areas and schools either by continuing with the LEA-wide
ranking or by ranking its schools below 75 percent poverty according to grade-span groupings.
An LEA with an enrollment of less than 1,000 students or with only one school per grade span is
not required to rank its school attendance areas.

LEAs are not required to allocate the same per-pupil amount to each school. If they choose not
to allocate the same per-pupil amount to each school, they must allocate higher per-pupil
amounts to poorer schools than they allocate to schools with lower concentrations of poverty.

GDOE received $313,035,038 in Title I, Part A funds for the 2002-2003 school year and ranked
10th in funding received among all States. After reserving funds for administration and school
improvement, GDOE allocated $300,521,628 (about 96 percent) of Title I funds to 180 LEAs,
including 31 charter schools. The 10 LEAs we reviewed received a total of $71,642,869 of
Title I, Part A funds.


               OBJECTIVES, SCOPE, AND METHODOLOGY 


Our objective was to determine whether GDOE allocated Title I funds in accordance with Title I
of the ESEA, governing regulations, and ED guidance. To meet this objective, we (1)
determined whether GDOE properly followed Title I regulations and guidance for setting aside
Title I funds received from ED for State administration and school improvement and making
final grant allocations to LEAs, (2) determined whether selected LEAs allocated Title I funds to
the schools with the highest percentages of poor children (in rank order), (3) determined whether
only eligible schools received Title I funds, (4) determined whether proper poverty measures


ED-OIG/A04-E0002                        FINAL REPORT                          Page 11 of 21
were used and that lower poverty schools did not receive higher per pupil allocations than higher
poverty schools, and (5) verified that the data the LEAs used to identify and count eligible
poverty children was consistent and inclusive (private school, charter school, and home school
children). Our audit covered the 2002-2003 and 2003-2004 school years (July 1, 2002, through
June 30, 2003, and July 1, 2003, through June 30, 2004).

To achieve our objectives, we -
• 	 Reviewed GDOE’s management control structure, policies, procedures, and practices
    applicable to its allocation of Title I funds to LEAs and monitoring of LEAs’ allocations of
    Title I funds to schools;
• 	 Obtained the universe of LEAs from GDOE;
• 	 Stratified the universe of 164 LEAs2 based on the amount of Title I funds received into five
    strata, selected the two LEAs (APS and the DeKalb County Schools) that made up the first
    strata, and randomly selected eight additional LEAs from the remaining four strata;
• 	 Visited the APS and the DeKalb County Schools to review policies and procedures, Title I
    applications, and source documentation to support the Title I application data;
• 	 Conducted desk reviews of policies and procedures and Title I applications for the eight
    LEAs randomly selected for review;
• 	 Obtained information regarding the selected LEAs’ allocation processes and allocations for
    the 2002-2003 school year;
• 	 Interviewed various ED, GDOE, and LEA officials as necessary to answer the audit
    objectives;
• 	 Analyzed information received from the GDOE and LEAs regarding their respective Title I
    allocations.

In addition, we reviewed each LEA’s allocation process by
• 	 Identifying the key people involved in the allocation process,
• 	 Obtaining and reviewing copies of the two most recent Single Audit reports and management
    letters,
• 	 Obtaining a list of the Title I allocations to schools,
• 	 Gaining an understanding of the allocation process and related controls,
• 	 Determining whether Title I funds were allocated to schools with the highest percentage of
    poor children (rank order) and only to eligible schools,
• 	 Ensuring lower poverty schools were not receiving higher per pupil allocations than higher
    poverty schools and that the poverty measure used was proper,
• 	 Verifying that the student count data used in the allocation was accurate and inclusive in
    accordance with the ESEA and the applicable regulations, and
• 	 Assessing the reliability of computer-processed data applicable to the allocation of Title I
    funds to schools.

To meet our objectives, we relied, in part, on computer-processed data that GDOE used to
allocate Title I funds to LEAs. The data used were GDOE’s Title I grant allocations, student
enrollment counts, and counts of students eligible for free and reduced-priced meals contained in
GDOE’s computerized database. To determine whether this data was reliable, we assessed the
2
    We excluded 17 LEAs that received less than $300,000 in Title I funds.


ED-OIG/A04-E0002                                FINAL REPORT 	               Page 12 of 21
adequacy of the policies and procedures followed by the GDOE and LEAs to calculate or
summarize the data and enter the data into the computer system. We recalculated and verified
the accuracy of GDOE’s Title I grant allocations.

Since GDOE did not have readily available documentation and staff to demonstrate that the
Title I program set-aside funds and allocations made to LEAs were prepared accurately for
award year 2002-2003, we used alternative audit procedures to determine the accuracy of
GDOE’s calculations. We compared and determined that the set-aside funds and allocations that
GDOE made to LEAs for the 2002-2003 award year were reasonable and consistent as a
percentage (varied by 3 percent or less) of the total set-asides or allocations made to LEAs for
the 2003-2004 award year.

We also compared the student enrollment count data to the LEAs’ total student population counts
shown on their Title I allocations (applications). We also compared the student counts for free
and reduced-price meals contained in GDOE’s Department of Technology Free and Reduced
Price Meal data to the LEAs’ poverty children counts shown on their Title I allocations for
selected LEAs. For two LEAs (APS and the DeKalb County Schools), we also traced enrollment
and poverty count data back to original source documentation. Based on our assessment and
tests, we concluded that the computer-processed data GDOE provided was sufficiently reliable
for the purpose of our audit.

We conducted our audit work during the period January through June 2004. As part of our audit,
we visited the GDOE offices in Atlanta, Georgia; the APS offices in Atlanta, Georgia; and the
Dekalb County Schools offices in Decatur, Georgia. We did not visit the other eight LEA offices
selected for review. Instead, we obtained the necessary information from those LEAs and
conducted a review of the information in our office. We contacted LEA officials as necessary to
obtain additional information and clarifications during our audit work. An exit conference was
held with GDOE officials on August 24, 2004. The audit was performed in accordance with
generally accepted government auditing standards appropriate to the scope of the review
described above.


                  STATEMENT ON INTERNAL CONTROLS 


As part of our review, we assessed the system of internal controls, policies, procedures, and
practices applicable to GDOE's administration of the allocation of Title I funds to LEAs. Our
assessment was performed to determine the level of control risk for determining the nature,
extent, and timing of our substantive tests to accomplish the audit objective. For the purpose of
this report, we assessed and classified the significant controls into the following categories:

       ¾ Allocation of Title I funds to LEAs including controls over the completeness and
         accuracy of student enrollment and free and reduced priced meal counts, and
       ¾ Monitoring LEAs' allocations of Title I funds to schools.




ED-OIG/A04-E0002                       FINAL REPORT                          Page 13 of 21
We also assessed the system of internal controls, policies, procedures, and practices applicable to
APS and DeKalb County Schools' administration of the allocation of Title I funds to schools.
We did not assess the internal control structure of the other eight LEAs that we audited because
such assessments were not necessary to achieve the audit objective. Instead of assessing controls
for these eight LEAs, we obtained an understanding of the processes that these LEAs used to
allocate Title I funds to schools and determined whether the processes were in compliance with
applicable laws and regulations.

Because of inherent limitations, a study and evaluation made for the limited purpose described
above would not necessarily disclose all material weaknesses in the internal controls. However,
our assessment disclosed significant internal control weaknesses that adversely affected GDOE’s
ability to administer the Title I program. These weaknesses included the lack of supporting
documentation for the amount of Title I funds set-aside for school improvement and State
administration, Title I allocation guidelines that need to be updated to comply with Title I
regulations, and inadequate procedures for reviewing Title I related findings identified during
monitoring visits and audits of LEAs. Also, APS did not maintain source documentation to
support the poverty count data used to allocate Title I funds to schools. These weaknesses and
their effects are fully discussed in the AUDIT RESULTS section of this report.


                          ADMINISTRATIVE MATTERS 


If you have any additional comments or information that you believe may have a bearing on the
resolution of this audit, you should send them directly to the following Education Department
official, who will consider them before taking final Departmental action on this audit:

               Raymond J. Simon 

               Assistant Secretary      

               Office of Elementary and Secondary Education 

               U.S. Department of Education       

               400 Maryland Avenue, SW

               Room 3W315, FB-6 

               Washington, DC 20202 


It is the policy of the U.S. Department of Education to expedite the resolution of audits by
initiating timely action on the findings and recommendations contained therein. Therefore,
receipt of your comments within 30 days would be greatly appreciated.

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




ED-OIG/A04-E0002                        FINAL REPORT                         Page 14 of 21
If you have any questions, please call me at 404-562-6477 or Assistant Regional Inspector
General Mary Allen at 404-562-6465.

                                            Sincerely,

                                            J. Wayne Bynum

                                            J. Wayne Bynum
                                            Regional Inspector General


cc: 

Scott Austensen, Deputy State Superintendent of Schools for Finance and Business 

  Operations, GDOE
Clara Keith, Title I Director, GDOE
Randy Trowell, Accounting Services Division Director for Finance and Business
  Operations (GDOE audit liaison)
Kim Site, Grants Accounting Manager, Finance and Business Operations, GDOE




ED-OIG/A04-E0002                      FINAL REPORT                        Page 15 of 21
ATTACHMENT – WRITTEN RESPONSE TO THE DRAFT REPORT 





                                   Geoo,,;. _ _ of Edu<adon
                                 0fIIc:e old. St.dc ~ 01 Sd.x!k
                                            T ....n To ....eu Eils.
                                     Ad.ata, C.o"91. 30334·5001
                                           __ . ~o •. kI2 .!1&.'"
                                         (_)6~UY7     1'_(.)651-5521
                                             September 24, 2004




          Mr_J. Wayne: Bynum
          Regionallnspcctor Gcnc:ral (or Audit
          U.S. Department ofEducatioo
          Office of Inspector General
          61 Forsyth Street, Room 1&171
          Atlanta, GA ) 0)0)

          Subject: Response to Draft Audit Repon

          Dear Mr. Bynum:

          Attached is the Georgia. Department of Educatioc!' 5 (GOOE) response to the draft audit
          report dated Ali9lSl25, 2004, Control Numba- A04-EOOO2, laldit of the Goorgia
          Department ofEduCillion's allocation ofEIememary and Secondary EdUClLlion Act of
          1965. lIS amended (ESEA). Title I, Part A (rrtle I) funds to local educational agencies
          (LEAs) and ~electcd LEAll ' alloeaaion5 to scltooIs. Audil: coverage included the period
          July 1. 2002 through June 10, 2004 (award )'eaI1l2002+2003 and 200).2004).


          Sincerely.


         ~Y)~ -
          Smlt Ausleruen. Cf A
          Deputy Superintendent for
          Financ.e and Bus;ncM (}peraIKms




ED-OIG/A04-E0002                               FINAL REPORT                                          Page 16 of 21 

ATTACHMENT - WRITTEN RESPONSE TO THE DRAFT REPORT




                                   Officeef._pd!r Ctaenl A.d.it ofUie
              Georc.i- Dgtl\"!!!t!t.r Ed.e.ti.-', AUeeadoa ofEk1ne.t.ry ,ad Seco..d.ary
                                 FAltKatto. Act   or J!6S.   Q   ,1DndeCI (f.5EA)

                                      Audit Coatrol NUllrlber A04--EOOO2

                                 State Eduafloa Ageaey Cornctive Actions



         The Georgia Department ofEducal:ioo has in lftituted t1v: following proecdun=s 10 ~ thai
         ;appropri;ate documcnIation and weguards are in p1acc when delermining allocation Tille I
         Pan A funds:

         Findina No. I - GOOE Managcmr:nt Control. Ovec Supporting Oo<:u.mentatiun for Set-Mdc
         Funds and Allocation ofFunds to LEAs Need Strengthening

         IG Reoornmendalions:
         1. 1 Implement eonlrols to mairuin aM llafeguan;llhedocumenlation for !CUing;aside Tille I
            . funds for State adminlstrmou an:!. schoo l improvemenl, aDd making final Ti tl e I grant.
              allocatioru to LEAs.
         1.2 Develop up-to-date writtco proccdurc!l an:!. guidelines that comply with Title I i1loQ.rion
              roquircmct1 ts.

             1) We concur with the fioding. The corrcaive 8Ctioo will be: implcmc:ntat by December
                31,2004. The Offtee of Finance and BUlIincss (}per.I.rions will determine allocabons
                and maintain appropriate documentation in eollabora.t.ion with the Division of Title I.
                In addition the following procc:dW:C$ were implanmud:
                    a. The Office ofF'mance and Business Operations hired a budget analyst to work
                        in collaboration with all foderal progr.un managers 10 determine al location!
                        and manage the consolidated adrnini$lraf.ion budget in accordance with federal
                        statute and regulations.

                    b. The blldget analyst and Title: I Dircctor updaled the Title I a1IOC3.tm guidance
                       in accordance with feden.! stalUte and regulations to dete rmine allocations for
                       the 2004·2005 school year. In addition, lIle budget 1NI)'St has documented
                       the procedures fix" determining a1loc«iun5. All clewunic and paper copy of
                       the dc1enninatioos, including fonnulas used 10 detamine allocatiollS, will be
                       maintained ill the Office of Finance and Busincss Opc:raI:ioru and in !he Title J
                       Division.

                    c.   'nM:: Grants Accounting Division in the Office ofFinanee and BlIsiIlCS.!!
                         Operat~ receives grant n.oan:I notifications for aU fcdcraJ 81localions.
                         Grunts Ae<:ounting rev;ews and connrna set aside: requirements fIX each g:r.n:
                         with the appropriate program manager. Once verified by program managers,
                         Gr.lnts Accounting establishes appropriate fund ae<:ounts and nolifia; proPIIm
                         m;ulagen to ensure cxpendiruros arc charged a.gainst appropriate accollnts.




ED-OIG/A04-E0002                                FINAL REPORT                                         Page 17 of 21 

ATTACHMENT - WRITTEN RESPONSE TO THE DRAFT REPORT





                     d. The Office ofFinancc and Business Opcrn,ioos, the Tille I Division., and o1her
                          federal progrmt managers will develop written pnxc:dures and guid.clillC'! for
                          subscquQlI al1ocation determinations for iIll fod<:n.l programs. The guidelines
                          will include step-by-step proa::dures as wel l as procedures for the maintenanee
                          ofpaper and electronic records. An eloctronic versioo of procedures will be
                          posted on In-Touch, the Deputnxnl's intranet.
         (Note: In the previous arlmini&lraltion, the IlIlit responsible for detenni.n.ing Ililocations did DOl
         ....~ ovcrsi te from any Office. The Aceountability Unit had complete conlrol over
         dctcnniamg allocations and did. DOt consult or oolbbonte with program managers when
         making dctcrminationa. The c wn:nt GDOE organizationaJ Slructurt reqwra mu ltiple Ia~
         offi9Cal control when determining allocations;md expending funds.)

         Findin¥ No.2 - GDOS Procedures (or Monitoring Title [ Relaled Findings Id entified DUring
         LEA Moniloring Visits IUId in Audit R.epom Needs StJen&lhening

         IG Recommenda6om;
         2.1 Obtain the results of monitoring site visits from its School Nutrition Office and OMB
             Circul2r A-133 audit reports when Title J related findings ve identified at LF.A 10
             determine common and recurring findings.
         2.2 Usc infonnation learned from T iU e J rei_cd findings to identify the IDchnical assistanee
             aDd training rteeds lOr LEAs and monitor LEAs fot COf7CCtive ;u;tion~ and comp liance
             with Tille I regulations.
         2.3 Report lhc CUTCClivc Ktion Ul:cn to rc:aoIve \he A-133 audit findings for the past three
             years for the Dougherty County Board ofEdueatio n.


             2) We coDCurwilh \he finding. l1Ic Georgia Department ofEducWon hu inaitutod the
                following prnceclurello comply with the IG rcconu:nc:ndatiom:
                    a. 1bc Office nfFinancc and Business Operations Accountability Unit in School
                       Nutrition wiD immediately upon completion of2004 dala. forwlU"d 10 the Ti lle
                       I Division a list ohchool districts (School year 2000 througf12(04) with
                       federal Perfonnance StandanI I violwOflS (7 CPR Part 2 10) involving
                       ''benefit issuance" AND a confirmation thaI the district has COlTccted the
                       eligibility status of students in the school nutrition lyslcm and that !.he district
                       has reported that it has al50 COIlllCted students' eligibility ~ in the student
                       infonnatinn &)'Stem o f th e district.

                     b. Title I Pan A n;giOllOlI spcciali.5l:> will consul l the report from the
                        ACOOOOLribility Unit in SdIooI Nutrition when approving LEA applieations fQT
                        federal funding and during the monitoring process. In addition, regional
                        specialise will review random samples of LEA eligibility doi;umenUliOl1




ED-OIG/A04-E0002                                  FINAL REPORT                                             Page 18 of 21 

ATTACHMENT - WRITTEN RESPONSE TO THE DRAFT REPORT




                             Ofllte of lamed'" ee.eral A_dit of "e

                           tAtllC:1!ti!p Art of 1m II     ._.detI
            ("_00. Dgpa r1mn!! of Edac. lloll's AllOS!dop III Elt mentuy a nd Stt.adln'
                                                                 {F_C;t:Al




                      during the monitoring prooess. The Title r Part A moni1Oring docwnalt wu
                      updat.od August 2004 and all regional stalTwith monitoring rcsponsibilities
                      was trained on thc new procedures Augusl23-24. 2004. LE.ru with federal
                      Pcriomnmec SI2Qda-d I vioblioos will be notified by the appropriate: regional
                      spa;:ialisl and tcclutkal assistance will be provided. LEAl will havc 30
                      c:aICDdar days to comply with guidelines.

                 c.    The Title I Division ClfteIldy provides regional meetings and one stalcwidc
                      confcn:nce to address lbe training needs of LEAl. During Lhe Ju ly 2004
                      Statewide COtIfermce, me Title I Division hosted three sessions on LEA
                      rcquiremCllts for dctcnnining allocations to scboo ls. The g uidelines from the
                      U.S. Department of Education were provided 10 each !W1icipant (and ema..ilto
                      all Title I c:oordinaIors). The training included documc:nwiM o f e li gible
                      children used in dcccnni:ning school allocation .00 rcconi maintenance and
                      retention.

                 d    The regiouai 5pOCWiIt assigned to Dougherty County conducted aD onsite
                      review ill August 2004. A n:port o[findinp and n:eommendatKlOs were filed
                      w;lh the Office ofFinancc and Business Operations, f"inllJcial Review
                      Division. A S\lOllllaI')' ofr.hc com:crive actiollll foT Dougherty County Schools
                      is provided bcklw:
                      i.      ProcedIJl'C:l for dctennining resident ehiklrcn and the number o[)ow­
                              intomc children have boc:n reviKd and the 2003-2Q04 school year data
                              reflects the improvement in the proce>s . Both resid ent children and
                              poverty ehildrcn nlUDbcn appear 10 he lCCUnIle fOT the 2003-2004
                              scbooJ year.

                      ii.     Preliminary data fOl' dctcnnining resident children and low-income
                              c lUldrco fo£ the 2004~200s school year has bceD reviewed. lbc:
                              Dougherty County School system was required 10 show documen.Winn
                              ofprocc:dureli use110 for detenninations. Dougherty CounC y has
                              complied and the ipw.d sheel clearly shows IlOITCCt procedures were
                              fotlowed. In addition Dougherty County has dcvc1op<xl inlcmal
                              proccdUl'CllIo ensure approprialC procedures will be [ollowed in the
                              future. Data analysis must be verified by Title 1 personnel md by
                              financial personne\.

                      iii.    No rcpantions for schools werc required at this time. Doughcny
                              County is .. "alert" LEA aDd will recctve an onsite visit in the spring
                              to ensun: that their cnm:ct.i ve Ktions an: maintained.




ED-OIG/A04-E0002                             FINAL REPORT                                          Page 19 of 21 

ATTACHMENT - WRITTEN RESPONSE TO THE DRAFT REPORT




                             0ftItt of 1!!IXdOr Cgtrai A.liit of 1be
              Georgia Dm!rtmpt oCEd-=adM', t\Ioc!tio! of t:k!D9!tary aDd SecaMlry
                           '.d-.tioII Act of '96S. u aDtelMled (Y..8U)

                                     Alldit Coatrot N1I0IIber A04-EOOO2




                   e. Single audit ~ are reported to the Financial Rcvicw Division axlany
                      fiodinp relakd to Title I an: teDl to !he T itk: I DireclOr. Upon receipl of
                      fmdiugs., a regiQrW spcx;:ialist is required to conduct an onsite vi5i!. A written
                      n:pon is senllo the: Title I Director mel afic:rreview and/or revisiom,
                      n::c:om11"lCn.l.:alion5 aJ"e !iCII11O the FilUlflcial Review Division Director. 1be
                      LEA ia Knt Ii copy of the rocommcndarions and if appropriute given 30 days
                      10 provide ;additional doeumc:ntation and/or to comply with fcdeaJ &ta1l11e and
                      regulations. Rcgionalspeoei.Jists I15Signed to the I...f..A arc required to follow
                      u.p on findinp. when appropriate and repo rt when Ihc I..£A has w mplic:d.
                      Once the LEA has fully complied. the Firwx;iaJ Review Division is sent final
                      rerolution. (Note: The Tille I Division is in the procc.;$ of collabo£ating wit),
                      the Financial Review Division 10 cstabtish lOnna! pNCCdurcs fOl" resolving
                      audit findings during the sing.le audiL Once proccdura arc fmaJil'.:cd, the Title
                      I Handbook will be updated and LEAs will be notified.) Corro:;tive action
                      wi II be implemented hy Docember 31. 2004.

         Finding No. 3 - Povmy Student: Count [)atlUsed hy Atlanta Puhl)c Schools (APS) to
         Allocate Title 1 funda Was No!: Supponcd.

         IG Roconuncndatioos:
         3.1 Require APS to verify poverty figures submitted by its School Nutrition Offiec 10 GOOE
             pfior ttl usiOH the fiJUfcS in the Title I allocation.
         3.2 Require APS 10 recalculatc its Title I allocation for the 2003-2004 school year and make
             reparatiorut to the appropriate schools that did oot felCetve the correct amount ofritle I
             runds.
         3.3 Require APS 10 maintain adoquatedoeumtntation ror the povmy ligure:ll used in the
             Titk [ allocation.

            3) We concur with the finding. The Georgia Department orE4LKl1.tion has instituted the
               following procedures 10 comply wi th !he IG n:wmmendations:
                    a. The Title I Division is o~anilcd into t},c followiog Ihree Units:
                           i. Monitoring and Technical Assisbnce regional s:pceialists 10 monitor
                               and provide technical usiilanee ttl ensure comp liance with feden!
                               statute and regulations.
                               (Note: The IG Rqxx1 indicated that in 2001 the U.S. Departmcot or
                               Eduell!ion indkiited that the GOOE did not adc:quar.ely rnoo.itor LEAs
                               and II fourth of!he LEAs were monitoret1 during the 2002-2003 school
                               year. 1beGDOEctid not havest2fI" to monitor LEAs during thc US
                               ED visit in 2001. During the 2002·2003 school yeN, regionalstaiT
                               poaitiom were allocated to CIl5UI"C that appropriate number- of




ED-OIG/A04-E0002                               FINAL REPORT                                           Page 20 of 21 

ATTACHMENT - WRITTEN RESPONSE TO THE DRAFT REPORT




                         Oftke efIasp«1or eeoeral A..-it .rUle
            Ceords Depart_t or Edaaldu', AIIM:I.IiM. ofF-Ienten'a..,. .... Seeoodaa
                        EdlSatia.l Ad of          1m.
                                            as ~ed WEAl




                              spec.i.aI.i$lll WCl'C available 10 manito<" LEAs are required in OMS
                              Circular A- Ill. The OOE divided the state into eight regions due to
                              lhe l.rgc number of LEAs. The Title I Divisioo developed monitoring
                              protocol and timeline,l.b..w the protocol with LEAs and iJS regiooal
                              staffwas hired, began the monitoring process. To date the GooE h.u
                              filled IIC'Ven vacancies, is cUfTCIltly advertising, and exp0c!5 to have ~I
                              positions fiUed at the Octobcr meeting of the State Board ofEduc8tioll.

                        ii.   ~       Support Implemenbtioll, Monitoring and Compliancc (Of"
                              Supplc:menbl Educational Services. C hoice, Family Uteracy, Title I
                              Preschool, and Title 1 Pwmt lDvolvcmenl.

                       iii. Grant Programs -     ~Ic:mc:ntation.   Monitoring,. and CompliUlCC: for
                              Tille I Part D: Neglected and Delinquent a!ld McKinney Vento
                              Education for Homele$.5 Children and Youth; T itle I Pan F:
                              Comprehemive School Refonn; TiIJc V: Innovative Programs and
                              Title Vl: Rur~ Education Acbievement Program.

                 b. The rcgjonaI specialist win conduct an onsite visit to APS to review m:ordaof
                    eligibility and 10 require APS to V<:rify poverty figures prior to using fig'lltn to
                    dcccnninc 2004--2005 Titk I Part A allocatiolUl to schools. Upon review IIJd
                    verification of eligibility data, APS Consolidated Application for- 2004-2005
                    will be submitted to the Title I Director for review before approval for grant
                    funds to be posted in GAORS. The regional specialist will consult with the
                    Aa:ountability Unit of School Nutrition to provide additional techrrieal
                    U$istancc to APS, ifneo::essary.

                 c. The GooE will require APS 10 recalculate its Title I Pan A a1)ocation for the
                    2002· 2003 scbool )'I:3f '" recommended. Rccalculations must be submitted to
                    the GOOE within the time frame spec.ified by the U.S. Department of
                    i:4ucalion. The GDOE will submi t written rcporc, as rt(juired, to the U.S.
                    Department ofEduc.ation ~g<U"ding APS compliance with the IG
                    recommendations.

                 d. APS wiU be required tosubmit in writing its pi.:! to ensure thai: ~te
                    dcx;umeotation is mamtaincd for determining eligibility for Tilk I Pan A
                    school a1kx:.arions. Records win be reviewed when momton:d during the
                     2~2005       sdlool year.




ED-OIG/A04-E0002                              FINAL REPORT                                           Page 21 of 21