oversight

Title IV Systemwide Improvement Grant Administered by Community Unit School District 300, Carpentersville, Illinois.

Published by the Department of Education, Office of Inspector General on 2000-12-01.

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

                                                UNITED DEPARTMENT OF EDUCATION
                                                          OFFICE OF INSPECTOR GENERAL




                                                                                               Control Number ED-OIG/A05-A0004


Dr. Norman Wetzel, Superintendent
Community Unit School District 300
300 Cleveland Avenue
Carpentersville, Illinois 60110

Dear Dr. Wetzel:

This Final Audit Report presents the results of our audit of the Title VII Systemwide Improvement
Grant (Grant) administered by Community Unit School District 300 (District) for the period August 1,
1997 through July 31, 1999.

                                                               AUDIT RESULTS

The District did not comply with applicable regulations in administering the Grant. According to
Office of Management and Budget (OMB) Circular A-87, Cost Principles for State, Local, and
Indian Tribal Governments, costs must be necessary and reasonable for proper and efficient
performance and administration of Federal awards, and must be adequately documented (OMB
Circular A-87 parts C.1.a. and j.). In the draft report, we questioned $342,217 ($212,575 for goods and
services unrelated to Grant objectives and $129,642 drawn down in excess of recorded
expenditures), and categorized as unsupported $343,390 spent on additional goods and services for which
the District did not provide adequate evidence that the costs were Grant related. We recommended that
the District return the questioned costs and provide adequate-supporting documentation or also return the
unsupported costs. In response to the draft report, the District agreed to return $607,901, consisting of
questioned costs of $321,665 and unsupported costs of $286,236. The District disagreed with our
findings and recommendations related to questioned costs of $20,552 and unsupported costs of $57,154.
For the portions it did not agree to refund, the District provided additional documentation in an attempt to
support its position. After reviewing the
District's response, we still conclude that the $20,552 are questioned costs. Also, we agreed with the
District's position for $1,308, and have reduced unsupported costs by that amount. However, we still
conclude that the remaining $55,846 the District disagrees with are unsupported costs. Details of the
revised questioned and unsupported costs are shown in the attached Schedule of Accepted,
Questioned, and Unsupported Costs.
The District's explanation for disagreeing with questioned costs of $20,552 and unsupported costs of
$55,846, and the reasons we disagree with the District are discussed below*:




 ·We included an edited copy of the District's response as Attachment 2 to this report. We deleted all references to specific
 individuals. We will provide the unedited, original response and the additional supporting documentation to the action
official..
                                            400 MARYLAND AVE.,S.W. WASHINGTON,D.C 20202-1510
                       Our mission is to ensure equal access to education and to promote educational excellence throughout the Nation.
   •   The District stated we should accept personnel costs of $2O,552 for one employee because we
       accepted other such expenditures for this employee. It did not provide any additional support for
       this position. This amount represented a portion of allocated personnel costs of four individuals
       for work they allegedly performed under the Grant. The District's documentation did not show
       what work the individuals performed, or how the District determined the applicable percentage to
       use for the allocation. We included these specific costs for all four individuals in our total of
       questioned costs. Without additional support, we cannot accept any of the costs associated with
       this allocation.

   •   The District stated we should accept personnel costs of $4,446 for an individual who entered into
       an employment contract with the District to serve as a clerk for the Grant. It stated that the
       individual's contract shows her work was Grant related, and therefore, her salary should be
       accepted. It also stated that the individual provided periodic certification required under OMB
       Circular A-87, Attachment B. Part l l(h)(3) that showed her work was Grant related. However,
       because this individual provided contractual services and was not an employee of the District, the
       citation pertaining to periodic certification does not apply. Because the District did not provide
       adequate support to show what work this individual performed on the Grant, we consider
       payments to her as unsupported.

   •   The District stated we should accept fringe benefit costs of $48,050 because it allocated these
       costs consistent with the pattern of benefits attributable to the individuals or group(s) of
       employees whose salaries and wages are chargeable to such Federal awards and other activities.
       The District provided specific costs per fringe benefit, but did not show how it calculated the
       amount allocated for each employee under the Grant. Additional documentation the District
       provided also shows that the District, itself, could not exactly determine the amounts charged to
       the Grant. Unless the District provides documentation showing how it specifically arrived at the
       actual amounts charged to the Grant, we cannot be assured that the amount charged to the Grant
       is proper. Additionally, the District paid fringe benefits for three individuals who provided
       contractual services to the District. The contracts for two of these individuals did not include
       fringe benefits. Therefore, the amounts paid on their behalf should be questioned. However, we
       cannot determine from the documentation the District provided what fringe benefits costs applied
       to which individual.

   •   The District stated we should accept training costs of $3,350 for an activity it said was Grant
       related. The District stated the speakers at the activity focused on instructional strategies for
       children deemed "at risk," including learning styles and scheduling options for at risk learners.
       The documentation the District provided does not support that this activity was Grant related.

RECOMMENDATION

We recommend that the Acting Director for the Office of Bilingual Education and Minority
Languages Affairs (OBEMLA) instruct the District to:

   1. return questioned costs of $342,217 (the District agreed to return $321,665; we still
      categorize $20,552 as questioned); and




                                                    2
        2.      return unsupported costs of $286,236 that the District agreed to return, and provide
                sufficient supporting documentation for the $55,846 we still categorize as
                unsupported, or return those funds to the Department of Education.

                                           BACKGROUND

Systemwide Improvement Grants are authorized by Title VII of the Improving America's Schools Act of
1994. These grants provide funds to local education agencies for improving the education of limited
English proficient students and their families. Local education agencies may use funds awarded under
these grants for reviewing, restructuring, and upgrading:
       1. educational goals, curriculum guidelines and content, standards and assessments;
       2. personnel policies and practices including recruitment, certification, staff
           development, and assignment;
       3.. student grade-promotion and graduation requirements;
       4. student assignment policies and practices;
       5. family education programs and parent outreach and training activities designed to
           assist parents to become active participants in the education of their children;
       6. the instructional program for limited English proficient students by identifying,
           acquiring and upgrading curriculum, instructional materials, educational software and
           assessment procedures and, if appropriate, applying educational technology;
       7.. tutorials and academic or career counseling for children and youth of limited-English
           proficiency; and
       8.. such other activities, related to the purposes of the Grant, as the Secretary of
           Education may approve.

OBEMLA awarded the Grant to the District for a five-year period ending on July 31, 2002. However, in
the second year of the Grant, OBEMLA raised several questions regarding the District's progress. As a
result, District officials wrote to OBEMLA in September 1999 requesting that the Grant be terminated.
OBEMLA notified the District of the Grant's termination in October 1999, effective July 31, 1999. The
District's award for the two-year period ended July 31, 1999, totaled $1.3 million ($650,000 for each
year). The Department of Education's records show the District drew down $1,247,242.


                          AUDIT SCOPE AND METHODOLOGY

The objective of our audit was to determine whether the District complied with the law and
applicable regulations in its use of Grant funds. As part of our audit we:

       1.       interviewed key District employees and OBEMLA officials;
       2        reviewed Grant application documentation maintained by OBEMLA;
       3        reviewed relevant accounting records and available supporting documentation
                maintained by the District;
        4.      reviewed audit reports prepared by independent Certified Public Accountants under
                OMB Circular A-133 for the years ended June 30, 1998, and 1999; and
        5.      eviewed performance reports submitted by the District to OBEMLA.




                                                     3
We conducted our audit at the District's offices Carpentersville, Illinois from December 1999
through March 2000. We performed our work in accordance with government auditing standards


                      STATEMENT ON MANAGEMENT CONTROLS
Because the objective of our audit pertained to the District's past use of Grant funds, and because the
District no longer participates in the Grant, we did not assess the District's control structure, policies
procedures, and practices.

                                 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 Department of Education
official, who will consider them before taking final action on the audit:

                        Arthur M. Love, Acting Director
                        Office of Bilingual Education and
                        Minority Languages Affairs
                        400 Maryland Avenue, S.W.
                        MES Room 5094, Mail Stop 6500
                        Washington, DC 20202

OMB Circular A-50 directs Federal agencies to expedite the resolution of audits by initiating timer,
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, if requested, to members of the press and general public to the
extent information contained therein is not subject to exemptions in the Act.

                                                  Sincerely



                                                 Thomas A. Carter
                                                 Assistant Inspector General for Audit

Attachments
                                                                                                  Attachment 1
                                                                                                    Page 1 of 2


 SCHEDULE OF ACCEPTED, QUESTIONED, AND UNSUPPORTED COSTS

      CATEGORY               ACCEPTED           QUESTIONED          UNSUPPORTED               TOTAL
 Personnel (1) (2)             $340,567             $103,377              $178,776               $622,720
 Fringe Benefits (3) (4)              0               11,932                97,543                109,475
 Travel (5)                      63,228                2,828                     0                 66,056
 Supplies (6) (7)                56,437               77,163                22,268                155,868
 Other (8) (9)                   74,749               12,235                 2,949                 89,932
               Sub-Totals      $534,981             $207,535              $301,536             $1,044,052
 Indirect Costs (10)              9,897                3,840                 5,578                 19,315
               Sub-Totals      $544,878             $211,375              $307,114             $1,063,367
 Training (11)(12)               18,065                1,200                34,968                 54,233
               Sub-Totals      $562,943             $212,575              $342,082             $1,117,600
 Excess Funds (13)                    0              129,642                     0                129,642
                TOTALS         $562,943             $342,217              $342,082             $1,247,242



(1)    The questioned amount represents salaries and contractual payments for activities that did not
       relate to Grant objectives. For example, the District used Grant funds to pay for the Project
       Facilitator’s work on other projects, including work on writing and preparing proposals for other
       grants. OMB Circular A-87 (A-87), Attachment A, Part C.1.b. states that, to be allowable under
       Federal awards, costs must be allocable to Federal awards.

(2)    The unsupported amount represents salaries and contractual costs for which support is needed to
       show that activities were related to Grant objectives. For example, the District paid a clerk and a
       data coordinator for hours they billed to the District (the District paid them as contracted service
       providers, not employees). However, there was no documentation to support that the work they
       performed was Grant related. A-87, Attachment A, Part C.1.j. states that, to be allowable under
       Federal awards, costs must be adequately documented.

(3)    The questioned amount represents fringe benefits charged to the Grant while no employees worked
       under the Grant. Therefore, these funds cannot be allocated to the Grant as required under A-87,
       Attachment A, Part C.1.b.

(4)    The unsupported amount represents fringe benefits the District charged against the Grant without
       adequate documentation. The District did not provide us with documentation showing how it
       calculated fringe benefits for each employee who worked under the Grant, as required under A-87,
       Attachment A, Part C.1.j.

(5)    The questioned amount represents the costs associated with travel that was not related to the Grant
       objectives. For example, the District used Grant funds to pay for travel expenses the Project
       Director incurred to attend the National Staff Development Conference. This conference was not
       included in the approved budget and was not related to the Grant. Therefore, the costs associated
       with the travel could not be allocated to the Grant as required by A-87, Attachment A, Part C.1.b.

(6)    The questioned amount represents expenditures for supplies that did not relate to Grant objectives,
       and equipment, building improvements or other charges not included in the Grant budget. For
                                                                                                 Attachment 1
                                                                                                   Page 2 of 2

       example, the District used Grant funds for purchasing food, bottled water, mini-blinds, carpeting
       and paint. These costs are not allowable because they are not necessary and reasonable for proper
       and efficient performance and administration of Federal awards (A-87, Attachment A, Part C.1.a.)
       and they do not conform to limitations set forth in the Grant (A-87, Attachment A, Part C.1.d.).

(7)    The unsupported amount represents supplies and text materials (e.g. A Tale of Two Cities) for
       which the District did not provide support to show that the items were used for, and limited to,
       Grant related purposes. Without such evidence, the District cannot support that these costs are
       allocable to the Grant as required in A-87, Attachment A, Part C.1.b.

(8)    This questioned amount represents expenditures that were either not related to the Grant’s
       objectives or were not included in the approved budget. For example, the District used Grant funds
       to send students to an award ceremony entitled, “Those Who Excel,” that was not related to the
       Grant’s objectives. A-87, Attachment A, Part C.1.a. requires costs to be necessary and reasonable
       for proper and efficient performance and administration of the Grant.

(9)    The unsupported amount represents expenditures that lacked adequate support to show they were
       related to the Grant’s objectives. For example, District officials attended local conferences, but did
       not provide evidence to show how the conferences related to the Grant’s objectives. A-87,
       Attachment A, Part C.1.j. requires adequate documentation of all expenditures.

(10)   The amounts represent questioned and unsupported indirect costs calculated at 1.85 percent of the
       questioned and unsupported direct costs exclusive of training. The original Grant budget provided
       for the 1.85 percent rate and specified the base as all direct costs exclusive of training.

(11)   The questioned amount represents costs associated with training bus drivers on diversity issues.
       This activity was not in the approved Grant. Thus it is not allocable to the Grant in accordance
       with A-87, Attachment A, Part C.1.b.

(12)   The unsupported amount represents expenditures for training that need additional support to show
       the relationship to the Grant’s objectives, as required by A-87, Attachment A, Part C.1.j. For
       example, many District employees attended a conference entitled, “Reaching the Reader.” The
       District charged this training to the Grant. However, the District did not provide sufficient
       evidence to support that the individuals involved had duties under the Grant, and that the training
       was directly related to Grant activities.

(13)   This amount represents the amount of funds the District drew from the Department that exceeded
       the amount shown as expended in the District’s Accounting Records. These amounts were not
       allocable to the Grant in accordance with A-87, Attachment A, Part C.1.b.
                                             REPORT DISTRIBUTION LIST
                                                                                                                                      No. of
                                                                                                                                      Copies

Auditee................................................................................................................................. Original

Action Official
Arthur M. Love, Acting Director
Office of Bilingual Education and Minority Languages Affairs......................................................1

Other Department of Education Offices
Deputy Secretary..............................................................................................................................1

Office of the General Counsel .........................................................................................................1

Office of the Chief Financial Officer
Financial Improvement and Post Audit Operations .........................................................................1

Office of Public Affairs....................................................................................................................1

Secretary’s Regional Representative................................................................................................1

Office of Inspector General
Inspector General .............................................................................................................................1
Deputy Inspector General.................................................................................................................1
Assistant Inspector General for Investigations.................................................................................1
Assistant Inspector General for Audit..............................................................................................1
Deputy Assistant Inspector General for Audit .................................................................................1
Audit Services..................................................................................................................................1
Director, State and Local Advisory and Assistance.........................................................................1
Area Managers .................................................................................................................................6
Region V Audit Office.....................................................................................................................6