oversight

Audit of Selected Aspects of Alliance City Schools' (Alliance) Administration of the 21st Century Community Learning Center (Learning Center) Program.

Published by the Department of Education, Office of Inspector General on 2000-06-28.

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

                               UNITED STATES DEPARTMENT OF EDUCATION
                                              OFFICE OF INSPECTOR GENERAL

                                                                                                         THE INSPECTOR GENERAL




Mr. Arthur D. Garnes, Superintendent
Alliance City Schools
200 Glamorgan Street
Alliance, Ohio 44601


Dear Mr. Garnes:

This Final Audit Report (Control Number ED-OIG/A05A0021) presents the results of our audit
of selected aspects of Alliance City Schools’ (Alliance) administration of the 21st Century
Community Learning Center (Learning Center) program. Because there are no findings that
require resolution, you are not required to respond to this audit report

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.

                                                   AUDIT RESULTS

During the period January 1, 1999, through December 31, 1999, Alliance properly accounted for
$84,359 of Learning Center funds, and used the funds in accordance with Title X, Part I, of the
Elementary and Secondary Education Act of 1965, as amended, Title 34 Code of Federal
Regulations (CFR) Part 700, and Education Department General Administrative Regulations.
Alliance had sufficient documentation to support salary costs, fringe benefits, equipment,
supplies, travel, meeting, contracts, and other expenditures it charged to the Learning Center
grant.

We obtained a listing of all Learning Center transactions for the period January 1, 1999, through
December 31, 1999, and traced them to vouchers, purchase orders, and canceled checks to ensure
that totals from these source documents agreed with the accounting records. The table below
shows the amounts accepted for the Learning Center expenditures for grant year 1999.




                                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.
                                Budgeted                  Actual                                                Amounts
     Expenditure                                                                Questioned Costs
                                Amount                  Expenditures                                            Accepted
        Salaries                 $71,987                  $23,516                         $0                     $23,516
        Fringes                   $11,250                       $0                        $0                        $0 1
    Travel & Meeting               $5,000                    $1,691                       $0                      $1,691
       Equipment                  $31,655                   $51,371                       $0                    $51,3712

        Supplies                  $43,915                    $7,307                       $0                      $7,307
      Contractual                 $31,192                       $0                        $0                        $0
         Other                     $5,000                     $474                        $0                       $474

        TOTAL                    $199,999                   $84,359                       $0                     $84,359


Because Alliance did not spend any grant funds prior to hiring the Learning Center Director
(Director), it had carryover funds of $115,642 from grant year 1999. Alliance stated, in its 1999
Grant Performance Report, that it would use the carryover funds to begin family and parent
programs, offer a more developed summer program, and expand its after school program to
include all students attending Morgan Elementary School and neighborhood students bussed to
other district schools. We reviewed the Learning Center’s 2000 budget, and found that Alliance
has allocated funds for these specific programs.

Our audit did not disclose any material weaknesses in Alliance’s system of management controls
over accounting for and using grant funds. Alliance (1) had an accounting system that clearly
identified sources and uses of Learning Center funds; (2) had written policies and procedures for
requesting purchases and contracts; and (3) segregated duties of authorizing, approving, and
accounting for expenditures. The Director was the only person at Alliance who could request
Federal grant funds. The Director had to obtain supervisory approval before he made any
purchases for the program.

                                                     BACKGROUND

The Learning Center program, authorized under Title X, Part I, of the Elementary and Secondary
Education Act of 1965, as amended (20 U.S.C. 8242-8247), is a three-year grant that provides
funds to rural and inner-city public schools, or consortia of such schools, to enable them to
provide expanded learning opportunities for participating children in a safe, drug-free, and
supervised environment. The Learning Center program, funded at $40 million for fiscal year
1
  Alliance’s Treasurer does not charge fringe benefits costs to the Learning Center until the end of Alliance’s fiscal year
(6/30/00), except for the retirement benefits. The retirement benefits are charged twice a year. On 1/25/00, the Treasurer
charged retirement benefits of $3,292 to the Learning Center.

2
 According to 34 CFR 75.264, grantees no longer need to seek U.S. Department of Education approval for budget transfers
within grant projects. The difference in budgeted equipment expenditures and actual equipment expenditures is allowable.




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1998 and $200 million for fiscal year 1999, enables schools to stay open longer and set up
community learning centers.

A community learning center is an entity within a public elementary, middle, or secondary
school building that provides educational, recreational, health, and social service programs for
residents of all ages within a local community. A local educational agency operates the Learning
Center in conjunction with local governmental agencies, businesses, vocational educational
programs, institutions of higher education, community colleges, and cultural, recreational, and
other community and human service entities. The centers must include no less than 4 of the 13
activities listed in Title X, Part I, Section 10905 of the Elementary and Secondary Education Act
of 1965, as amended. They are encouraged to use the funds to accomplish a variety of activities
that may benefit students and the community surrounding the school. The centers’ programs
may include features to support health needs, provide equipment, remodel facilities, and provide
transportation to better serve its students and community.

Alliance is one of approximately 2,100 entities participating in the Learning Center program. It
set up the Morgan Family Center using $200,000 of Federal funds received under this program.
Alliance uses Morgan Elementary School after regular school hours, on weekends, and during
the summer to create a safe, convenient, drug-free, productive environment where children and
the adult community can learn. After hiring the Director in June 1999, the Morgan Family
Center began operation with a six-week summer program.

The U.S. Department of Education, Office of Inspector General, received a complaint regarding
Alliance’s Learning Center grant expenditures. The complaint alleged that Alliance was
misappropriating Federal grant funds it received under the grant. The complaint included copies
of purchase orders, invoices, and canceled checks for Learning Center expenditures, and stated
that the checks, purchase orders, and invoices did not match.

                      OBJECTIVE, SCOPE, AND METHODOLOGY

The primary objective of our audit was to determine whether Alliance properly administered
selected aspects of the Learning Center program in accordance with Title X, Part I, of the
Elementary and Secondary Education Act of 1965, as amended, 34 CFR Part 700, and Education
Department General Administrative Regulations (34 CFR Parts 74, 75, 77, 79, 80, 81, 82, 85,
and 86). Specifically, we conducted the audit to determine if Alliance (1) had receipts and other
records to show it properly accounted for Learning Center funds, and (2) used the funds in
accordance with the requirements for this grant. Our initial audit period was January 1, 1999,
through December 31, 1999. Because Alliance did not begin spending grant funds until June
1999, we wanted to review its expenditures of 1999 carryover funds as it proposed in its Grant
Performance Report. Therefore, we expanded the audit period through February 29, 2000.

To accomplish our objective, we reviewed Alliance’s most recent audit report; written policies
and procedures over requesting, accounting for, and using grant funds; payroll records; and
vouchers, purchase orders, and canceled checks for all expenses charged to the grant for the
period June 1, 1999, through February 29, 2000. We also interviewed various Alliance
employees.



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We performed on-site fieldwork at Alliance’s administrative offices in Alliance, Ohio, between
April 4 and April 20, 2000. Our audit was performed in accordance with government auditing
standards appropriate to the scope described above.

                     STATEMENT ON MANAGEMENT CONTROLS

We did not assess Alliance’s entire system of management controls because it was not significant
to our specific audit objectives. Instead, we reviewed written documentation of the system of
controls over Alliance’s accounting for and use of Federal funds for the Learning Center
program. Our assessment was performed to determine the level of risk exposure (that is, the
likelihood that significant noncompliance with the law and regulations occurred), and to
determine the extent of testing needed to accomplish the audit objectives.

Because of inherent limitations, a study and evaluation made for the limited purpose described
above would not necessarily disclose all material weaknesses in management controls.
However, our assessment did not disclose any significant management control weaknesses that
could adversely affect Alliance’s accounting for and use of Learning Center funds.

                              ADMINISTRATIVE MATTERS

If you have any questions, please contact Mr. Kenneth Luhring, Acting Regional Inspector
General for Audit, Region V, at 312-886-6503. Please refer to the control number in all
correspondence related to this report.



                                            Sincerely,


                                            Richard J. Dowd
                                            Acting Assistant Inspector General
                                            For Audit Services




cc: Joseph Conaty, OESE
   Robert Stonehill, OESE




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