oversight

Audit of the Ohio Department of Education and Selected Local Education Agencies.

Published by the Department of Education, Office of Inspector General on 2005-01-11.

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

                                    UNITED STATES DEPARTMENT OF EDUCATION

                                         OFFICE OF INSPECTOR GENERAL

                                                     REGION V

                                             111 NORTH CANAL, SUITE 940

                                               CHICAGO, ILLINOIS 60606


    Audit                                                     FAX: (312) 353-0244                                                      Investigation
(312) 886-6503                                                                                                                        (312) 353-7891



                                                                                                                   January 11, 2005

                                                                                 Control Number ED-OIG/A05-E0027

          Dr. Susan Tave Zelman

          Superintendent of Public Instruction

          Ohio Department of Education

          25 S. Front Street

          Columbus, Ohio 43215-4183


          Dear Dr. Zelman:

          This Final Audit Report presents the results of our audit of the Ohio Department of
          Education (ODE) and selected local educational agencies (LEA)., The objective of our
          audit was to determine whether ODE and selected LEAs complied with the maintenance
          of effort and supplement not supplant requirements of the Elementary and Secondary
          Education Act of 1965 (ESEA), Title I, Part A (Title 1) program, as amended by the No
          Child Left Behind Act of 2001, for the period July 1, 2003, through June 30, 2004 (2003­
          2004 school year). Because there were no findings that require resolution, you are not
          required to respond to this audit report.


                                                       AUDIT RESULTS

          ODE and the six selected LEAs complied with the law and applicable regulations
          governing maintenance of effort for the 2003-2004 school year. Using report expenditure
          data received from the LEAs, ODE correctly and accurately calculated maintenance of
          effort for the LEAs. In addition, the LEAs provided ODE with accurate data.

          ODE and the six selected LEAs generally complied with the federal regulations
          governing supplement not supplant for the 2003-2004 school year. To make this
          determination, we (1) compared changes in Title I expenditures to changes in general
          fund expenditures and (2) reviewed all Title I expenditures for administrative personnel
          at the six LEAs. ' We also reviewed expenditures for all teaching personnel at targeted
          assistance schools in 5 of 6 LEAs. The sixth LEA had all schoolwide schools. We did
          not review all Title I expenditures for administrative personnel at ODE because it used an
          administrative pool for administrative expenditures. Instead, we ensured ODE's
          administrative pool met the requirements of § 9201 of the No Child Left Behind Act.




                   Our mission is to ensure equal access to education and to promote educational excellence throughout the Nation.
Final Audit Report                                                       ED-OIG/A05-E0027


                                    BACKGROUND 


ODE is a department within the State of Ohio and consists of a State Board of Education
that appoints the Superintendent of Public Instruction. The Superintendent of Public
Instruction is responsible for 590 LEAs. The ODE’s vision is to be recognized as one of
the best state education agencies (SEA) in the nation by the year 2005.

The Title I program is authorized under the ESEA, as amended by the No Child Left
Behind Act of 2001, Public Law 107-110. According to § 1120A of the ESEA, an LEA
may receive Title I funds only if the SEA determines that the LEA has maintained the
fiscal effort required by the ESEA. The SEA must determine that either the combined
fiscal effort per student or the aggregate expenditure of the LEA from state and local
funds for free public education in the LEA for the preceding fiscal year was not less than
90 percent of the combined fiscal effort or aggregate expenditure for the second
preceding fiscal year. If the LEA fails to meet the 90 percent mark for any fiscal year,
the SEA must reduce the amount of funds allocated under a Title I program in the exact
proportion to which the LEA failed to meet the 90 percent requirement.

According to § 1120A(b)(1) of the ESEA, SEAs and LEAs must use federal funds
received under Title I only to supplement the amount of funds available from non-federal
sources for the education of students participating in Title I. The SEA and LEA cannot
use these federal funds to supplant funds that, in the absence of Title I funds, would have
been spent on Title I students. The supplement not supplant requirement as it applies to a
school operating a school-wide program requires the school to use Title I funds and other
federal education program funds included in the school-wide program only to supplement
the total amount of funds that, in the absence of the federal funds, would be made
available from non-federal sources for the school, including funds needed to provide
services that are required by law for children with disabilities and children with limited-
English proficiency.

For the 2003-2004 school year, ODE was authorized $395,560,975 in Title I funds. Of
this amount, it allocated $372,093,263 to 590 LEAs. The six LEAs that we audited
received $26,358,391 in Title I funds. (See Table 1.)

Table 1
 Name                                             Allocation
 Cincinnati City School District                        $23,279,650
 Xenia Community City School District                      1,116,021
 Switzerland of Ohio Local School District                   889,439
 Logan Hocking Local School District                         828,187
 Pike-Delta-York Local School District                       186,834
 Strasburg-Franklin Local School District                     58,260
 Total                                                  $26,358,391




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Final Audit Report 	                                                                    ED-OIG/A05-E0027


                       OBJECTIVE, SCOPE, AND METHODOLOGY


The objective of our audit was to determine whether ODE and selected LEAs complied
with maintenance of effort and supplement not supplant requirements of the ESEA, as
amended by the No Child Left Behind Act of 2001, Title I, Part A program for the period
July 1, 2003, through June 30, 2004.

To achieve our audit objective, we

1. 	 selected a stratified random sample of 6 LEAs from a universe of 590 Ohio LEAs;1

2. 	 gained a limited understanding of ODE’s and selected LEAs’ internal control
     structure, policies, procedures, and practices applicable to maintenance of effort and
     supplement not supplant for the Title I program by (1) reviewing the latest A-133
     audit report and related work papers; (2) interviewing ODE and LEA officials; and
     (3) interviewing Auditor of State of Ohio officials, auditors, and a Certified Public
     Accountant;

3. 	 obtained ODE’s maintenance of effort calculations for fiscal year 2002, 2003, and
     2004 and tested the calculations to ensure ODE used accurate data and the
     calculations were calculated correctly;

4. 	 reviewed the selected LEAs’ accounting records to ensure the 2001, 2002, and 2003
     maintenance of effort data reported to ODE were correct and reported accurately; and

5. 	 determined if ODE and the LEAs met the supplement not supplant requirements for
     the Title I program by comparing Title I positions (teaching and/or administrative) for
     the 2002, 2003, and 2004 school years and comparing the percentage of change in
     expenses each year for the Title I and general funds.


We also relied, in part, on computer-processed data from ODE’s Education Management
Information System (EMIS). In addition, we relied on the LEAs’ general fund and Title I
fund expenditure data. The LEAs reported the annual expenditure data through
intermediary sites to ODE’s EMIS. ODE used the data to calculate the LEAs’
maintenance of effort calculations. To determine whether the computer-processed data
were reliable, we first gained a limited understanding of ODE’s and the LEAs’ related
computer system controls; reviewed the maintenance of effort calculations for fiscal
years 2002, 2003, and 2004; and identified the accounts in the EMIS database that ODE
used to make the calculations. We selected a sample of data from ODE and each LEA
and applied logic tests. We tested for (1) missing data, (2) the relationship of one data
element to another, (3) values outside of a designated range, and (4) dates outside valid
time frames or in an illogical progression. Based on our limited understanding of system

1
  To select our sample, we (1) stratified the universe into three strata (large, medium, and small) based on
the amount of Title I funds received, (2) generated random numbers for each stratum, and (3) selected the
LEAs associated with the first two random numbers generated for each stratum.


                                                      3

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    Final Audit Report                                                      ED-01G/A05-E0027


    controls and our logic tests, we concluded that the computer-processed data that ODE and
    the six LEAs provided were sufficiently reliable for the purpose of our audit.

    We conducted our audit work from August 23, 2004, through December 3, 2004. As part
    of our audit, we visited ODE's offices in Columbus, Ohio and all six LEAs ­
    Switzerland of Ohio Local School District, Logan-Hocking Local School District,
    Cincinnati City School District, Xenia Community City School District, Pike-Delta-York
    Local School District, and Strasburg-Franklin Local School District. We held an exit
    conference with ODE officials on December 2, 2004.

    Our audit was performed in accordance with generally accepted government auditing
    standards appropriate to the scope of the audit described above.


                         STATEMENT ON INTERNAL CONTROLS

    As part of our audit, we did not assess the adequacy of the internal control structure of
    ODE and the six selected LEAs because such assessments were not necessary to achieve
    our audit objective. Instead, we obtained an understanding of the processes ODE and the
    LEAs used to comply with maintenance of effort and supplement not supplant
    requirements and determined whether the processes were in compliance with the
    applicable law and regulations. Our work did not disclose any control weaknesses that
    would increase the likelihood of instances of non-compliance with applicable law and
    regulations.


                               ADMINISTRATIVE MATTERS

    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 the exemptions in the Act.

    We appreciate the cooperation and assistance extended by your staff during the audit. If
    you have any questions, please contact me at 312-886-6503.


                                                 Sincerely,



                                                 Richard J.-Dowd
                                                 Regional Inspector General
                                                 for Audit