oversight

The College of Menominee Nation's Indian Education-Professional Development Grant

Published by the Department of Education, Office of Inspector General on 2009-05-07.

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

[Type text]


                                   UNITED STATES DEPARTMENT OF EDUCATION
                                                        OFFICE OF INSPECTOR GENERAL

                                                                                                                     Audit Services
                                                                                                  Chicago/Kansas City Audit Region

                                                                 May 7, 2009

                                                                                                    Control Number
                                                                                                    ED-OIG/A05J0004

Dr. S. Verna Fowler
President
College of Menominee Nation
P.O. Box 1179
N 172 Highway 47/55
Keshena, WI 54135

Dear Dr. Fowler:

This Final Audit Report, entitled The College of Menominee Nation’s Indian
Education─Professional Development Grant, presents the results of our audit. The objectives of
the audit were to determine whether the College of Menominee Nation (CMN) (1) verified
participants’ eligibility, (2) notified participants of the program payback and reporting
requirements, (3) submitted regular performance reports to the Office of Indian Education, and
(4) used grant funds only for costs that were allowable and in accordance with applicable laws,
regulations, and grant provisions governing its Indian Education─Professional Development
Grant. Our audit covered the period July 21, 2004, through July 20, 2007.


                                                      BACKGROUND


CMN, located in Keshena, Wisconsin, on the Menominee Indian Reservation, is a private, non-
profit, 2-year institution. The tribally controlled college is accredited by the North Central
Association of Colleges and Schools and offers Associate’s Degree and Certificate programs in a
variety of areas, including business administration, human services, and early childhood education.
CMN has an additional location in Green Bay, Wisconsin.

As part of the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the No
Child Left Behind Act of 2001 (NCLB, Public Law 107-110), the U.S. Department of Education
(Department), Office of Indian Education, offers Indian Education─Professional Development
Grants to eligible institutions and entities, including institutions of higher education and State
educational agencies, local educational agencies, and certain schools that are in consortium with
institutions of higher education. The purpose of the program is to prepare and train Indian
individuals to serve as teachers and educators. Grants are awarded to (1) increase the number of
qualified Indian individuals in professions that serve Indians; (2) provide training to qualified

 The Department of Education's mission is to promote student achievement and preparation for global competitiveness by fostering educational
                                                   excellence and ensuring equal access.
Final Report
ED-OIG/A05J0004                                                                                     Page 2 of 6

Indians to become teachers, administrators, teacher aides, social workers and other education
personnel; and (3) improve the skills of those qualified Indians who currently serve in those
capacities. Individuals trained under this program must either perform work related to their training
that helps Indian individuals or repay all or a prorated part of the assistance received.

CMN received Indian Education─Professional Development Grant funds from 2004-2007.
According to the Department’s Grants Administration Payment System, CMN received $891,051 for
the grant performance period (July 21, 2004, through July 20, 2007). A total of 13 CMN students
participated in the program.


                                              AUDIT RESULTS


During the period July 21, 2004, through July 20, 2007, CMN (1) verified participants’
eligibility, (2) notified participants of the program payback and reporting requirements,
(3) submitted all required performance reports to the Office of Indian Education in a timely
manner, and (4) used grant funds only for costs that were allowable and in accordance with
applicable laws, regulations, and grant provisions governing its Indian Education─Professional
Development Grant. Specifically, CMN

1. Verified that all participants were enrolled in an appropriate education-related program of
   study and verified participants’ Indian status;
2. Obtained signed payback agreements from each participant, which informed participants of
   the payback and reporting requirements of the grant; and
3. Submitted all quarterly grant performance reports as well as the final grant performance
   report.

In addition, CMN appropriately used grant funds. We reviewed documentation supporting costs
for random and judgmental samples 1 of $174,860 of $804,785 (22 percent) of non-personnel
costs, $13,922 of $67,671 (21 percent) of salary and wage costs, and $2,019 of $18,947
(11 percent) of fringe benefits costs. CMN provided supporting documentation, such as time and
effort certifications, invoices, receipts, and cancelled checks, that demonstrated each cost was
allowable.


                       OBJECTIVES, SCOPE, AND METHODOLOGY


The objectives of the audit were to determine whether the College of Menominee Nation
(1) verified participants’ eligibility, (2) notified participants of the program payback and
reporting requirements, (3) submitted regular performance reports to the Office of Indian
Education, and (4) used grant funds only for costs that were allowable and in accordance with

1
    See Objectives, Scope, and Methodology section (pages 3 and 4) for descriptions of our sample selection.
Final Report
ED-OIG/A05J0004                                                                  Page 3 of 6

applicable laws, regulations, and grant provisions governing its Indian Education─Professional
Development Grant. Our audit covered the period July 21, 2004, through July 20, 2007.

To achieve our objectives, we performed the following procedures.

1. Gained an understanding of the Indian Education─Professional Development Grant program
   and CMN relevant to our audit objectives by reviewing the Department’s and the Office of
   Indian Education’s websites, reviewing CMN’s website, reviewing CMN’s organizational
   chart, interviewing CMN officials, and contacting the Office of Indian Education regarding
   CMN’s Indian Education─Professional Development Grant.
2. Identified the amount of Indian Education─Professional Development Grant funds received
   by CMN for the period July 21, 2004, through July 20, 2007, by reviewing information from
   the Department’s Grants Administration and Payment System.
3. Reviewed CMN’s A-133 single audit reports: Annual Financial Report, year ended June 30,
   2005; Annual Financial Report, year ended June 30, 2006; and Financial Statements with
   Supplemental Financial Information, year ended June 30, 2007, to determine whether they
   included any findings relevant to our audit objectives.
4. Identified and gained an understanding of the law, regulations, Office of Management and
   Budget Circular A-87 (Cost Principles for State, Local, and Indian Tribal Governments), and
   grant provisions significant within the context of the audit objectives and in effect for the
   audit period.
5. Reviewed documentation, such as certification of Indian status, evidence of graduation from
   an educationally-related program, and payback agreements for all 13 participants.
6. Reviewed all performance reports for the period July 21, 2004, through July 20, 2007, that
   CMN submitted to the Office of Indian Education.
7. Contacted schools to verify all 13 participants’ post-grant employment.
8. Obtained and reviewed CMN’s accounting records and identified all Indian
   Education─Professional Development Grant funds expended during the period July 21, 2004,
   through July 20, 2007.

To determine whether CMN used grant funds only for allowable personnel costs, we selected
samples of Indian Education─Professional Development Grant personnel transactions. We
selected $13,922 of $67,671 (21 percent) of salary costs and $2,019 of $18,947 (11 percent) of
fringe benefits costs. We randomly selected 4 of 140, 4 of 118, and 4 of 57 salary transactions
for each grant year (2005, 2006, and 2007, respectively). We reviewed all payroll expenditures
for the pay periods that corresponded with the transaction dates of the randomly selected
transactions. We also judgmentally selected one month of fringe benefits for each grant year,
ensuring that we included at least one pay period for each month that was also selected for our
review of salary costs. We then (1) obtained and reviewed payroll records detailing salary,
wages, and fringe benefit expenditures for the grant performance period July 21, 2004, through
July 20, 2007; (2) obtained and reviewed payroll support, including contracts, job descriptions,
timesheets, and after-the-fact personnel certifications; (3) traced staff salaries and wages to
supporting documentation; and (4) reviewed fringe benefits documentation to ensure that costs
charged to the Indian Education─Professional Development Grant were reasonable and included
costs only for personnel working on the grant.
Final Report
ED-OIG/A05J0004                                                                     Page 4 of 6

To determine whether CMN used grant funds only for allowable non-personnel costs, we
selected $174,860 of $804,785 (22 percent) in transactions charged to various cost categories,
including, contractual, office supplies, program supplies, miscellaneous, travel, tuition, stipends,
and indirect costs. We judgmentally selected transactions from each of these categories, as
applicable, for each of the grant years (2005, 2006, and 2007). We generally selected larger
transactions and those that appeared out of the ordinary. We ensured that (1) supporting
documentation included the proper approvals (for example, requisition forms signed by an
authorized official, indication of approval to purchase goods or service); (2) purchase orders (if
used), invoices, credit card statements, and receipts were available for all purchases of goods and
services and were all in agreement; (3) the payee on canceled checks agreed with the other
supporting documentation; and (4) checks were properly endorsed and cashed.

We also gained an understanding and assessed the adequacy of CMN’s system of internal control
applicable to CMN’s compliance with applicable laws, regulations, and grant provisions. We
identified five significant areas of internal control relevant to our audit objectives: (1) student
eligibility, (2) student completion of education-related program of study, (3) student work at an
appropriate post-program position or re-paid any assistance received to the Department,
(4) performance reporting to the Office of Indian Education, and (5) use of grant funds. We
interviewed CMN personnel and reviewed policies and procedures to gain an understanding of
these control areas. We assessed these control areas during our review of supporting
documentation and our tests of transactions. We did not identify any material internal control
weaknesses.

In addition, we relied, in part, on computer-processed general ledger reports from CMN’s
accounting system. To assess the reliability of the reports, we reviewed them for completeness,
relevance, and accuracy. We ensured that the universe of personnel and non-personnel
expenditures generally agreed with all funds drawn down, the reports included only personnel
and non-personnel costs for our audit period, and dates, amounts, and totals were supported by
time and attendance certifications, invoices, receipts, canceled checks, and other support. Based
on our testing, we concluded that the computer-processed data were sufficiently reliable for the
purposes of our audit.

We conducted our audit from February through April 2009 at CMN’s campus in Keshena,
Wisconsin, and at our offices. We discussed the results of our audit with CMN officials on
February 20, 2009.

We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives. We believe that the evidence obtained provides a reasonable basis
for our findings and conclusions based on our audit objectives.
Final Report
ED-OIG/A05J0004                                                                   Page 5 of 6



                            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 exemptions in the Act.

No action on your part is required. However, if you would like to comment on this report, please
send your comments to:

                              Cathie Carothers, Director
                              Office of Indian Education
                              U.S. Department of Education
                              400 Maryland Ave., SW
                              LBJ Bldg., Room 5C132
                              Washington, DC 20202-6335

We appreciate the cooperation and assistance extended by your staff during the audit. If you
have any questions, please contact me at 312-730-1620.

                                             Sincerely,

                                             /s/

                                             Gary D. Whitman
                                             Regional Inspector General
                                             for Audit
Final Report
ED-OIG/A05J0004                                                           Page 6 of 6

                  Acronyms/Abbreviations Used in This Report
CMN          College of Menominee Nation

ESEA         Elementary and Secondary Education Act of 1965, as amended

NCLB         No Child Left Behind Act of 2001

Department   U.S. Department of Education