oversight

Bureau of Indian Affairs' Administration of the Individuals with Disabilities Education Act Funds at Fond du Lac Ojibwe School, Minnesota.

Published by the Department of Education, Office of Inspector General on 2004-08-30.

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

                       UNITED STATES DEPARTMENT OF EDUCATION 

                                         OFFICE OF INSPECTOR GENERAL 

                                  1999 BRYAN STREET, HARWOOD CENTER, SUITE 2630 

                                             DALLAS, TEXAS 75201-6817 

                                       PHONE: (214) 880-3031 FAX: (214) 880-2492 





                                                    . AUG 30 2004
Ms. Sharon Wells
Education Program Specialist
U. S. Department of the Interior
Bureau of Indian Affairs
Office of Indian Education Programs
1849 CSt., NW, Room 3512, Mm
Washington, DC 20240

Dear Ms. Wells:

This Final Audit Report (ED-OIG/A06-E0001) presents the results of our audit of the
Individuals with Disabilities Education Act (IDEA), Part B requirements at Fond du Lac Ojibwe
School (Fond du Lac) for the period July 1,2001, through September 30,2003. Our objective
was to determine whether Fond du Lac administered IDEA, Part B funds in accordance with
requirements, laws and regulations, and provided services to eligible children in accordance with
the student's Individualized Education Program (IEP).

We provided a draft of this report to the Bureau of Indian Affairs (BIA), Office of Indian
Education Programs. In its response to our draft report, BIA officials agreed with our
recommendations but did not agree with the specific numbers in the finding. We have
summarized BIA's comments in the body of the report and have included the response as an
Attachment to this report.




The Department of Education (Department) provides funding from major program grants to the
BIA, through the Department of the Interior. The BIA allocates these funds to elementary and
secondary schools operated or funded by the Secretary of the Interior, including tribally operated
schools that are funded by the BIA. These grants support students with disabilities and
disadvantaged children. The Department provided $140 million (22 percent) of BIA's school
operating fund in 2002. The program funds from the Department have constituted an increasing
share of these schools' operating budgets since fiscal year 1999 (from 18.2 percent to 22 percent
in fiscal year 2002). This is due in part to large increases since 1999 in two major Department
programs under which BIA receives funds, IDEA, Part B, and the Elementary and Secondary
Education Act, Title I (Title I). At BIA funded schools, funds for students with disabilities under
IDEA increased by 50 percent, and Title I funds for disadvantaged students increased by 21
percent for fiscal years 1999 through 2002.



      Our mission is to promote the efficiency, effectiveness, and integrity o/the Department's programs and operations
ED-OIG/A06-E0001                                                                          Page 2 of 7



IDEA, Part B requires the Department to provide funds to the Secretary of the Interior to assist in
providing special education and related services to children with disabilities. From the amount
appropriated for any fiscal year, the Department shall reserve 1.226 percent to provide assistance
to the Secretary of the Interior, of which 80 percent is allotted for serving children ages 5 through
21 with disabilities enrolled in elementary and secondary schools for Indian children operated or
funded by the Secretary of the Interior. As the IDEA, Part B appropriation has increased, IDEA,
Part B funds provided to the Secretary of the Interior have been capped in the FY 2002, 2003 and
2004 appropriation language. This cap has been set at the prior year’s funding level plus
inflation.

BIA funded schools are to use 15 percent of the Indian School Equalization Program (ISEP)
formula funds generated by their base instructional administration to fund their special education
programs. ISEP funds constitute the largest amount of the Department of the Interior funds used
for school-level administration, such as principals’ salaries and administrative assistance, in
addition to salaries for teachers, teacher aides, and the cost of materials. If the 15 percent is not
sufficient to fund the services needed by all eligible ISEP students with disabilities, schools may
apply for IDEA, Part B funds. Schools must demonstrate need when applying for these funds.

Fond du Lac is located in Cloquet, Minnesota, and is part of the Fond du Lac Band of the Lake
Superior Chippewa. The BIA disbursed $869,851 of IDEA, Part B funds to Fond du Lac for our
two-year audit period as follows—

                           School Year 2001-2002                      $343,297
                           School Year 2002-2003                      $526,554
                           Total                                      $869,851

For the 2001-2002 school year, Fond du Lac had an enrollment of 203 students with 103
classified as disabled; and in the 2002-2003 school year, enrollment was 225 students with 93
classified as disabled. The average amount of IDEA, Part B funds per pupil was $3,333 in the
2001-2002 school year, and $5,662 in the 2002-2003 school year.



                                      AUDIT RESULTS


Although Fond du Lac developed an IEP for all of the students in our sample and prepared the
required progress reports for most of the students, we found that Fond du Lac was unable to
demonstrate that it provided special education and related services to 56 percent of the students
in our sample in accordance with their IEP.
ED-OIG/A06-E0001                                                                                        Page 3 of 7


According to 34 C.F.R. § 300.341(a)(1)(2), The [Secretary of the Interior]1 shall ensure that each
public agency develops and implements an IEP for each eligible child with a disability served by
that agency. The IEP must contain certain elements according to 34 C.F.R. § 300.347, including:

     (a)(3) A statement of the special education and related services and supplementary aids
     and services to be provided to the child, . . .

     (a)(7)(ii)(A) A statement of how the child’s parents will be regularly informed (through
     such means as periodic report cards), at least as often as parents are informed of their
     nondisabled children’s progress of, . . . Their child’s progress toward the annual goals.

Further, 34 C.F.R. § 300.350 (a)(1) requires that each public agency must provide special
education and related services to a child with a disability in accordance with the child’s IEP.

We selected a random sample of 10 of 103 students with disabilities in school year 2001-2002
and 15 of 93 students in school year 2002-03. We reviewed the files for the 25 selected students
and found that all the files contained an IEP. However, Fond du Lac did not provide any
services to 3 students reviewed; and we could not determine what services, if any, were provided
to 11 other students because of a lack of documentation. Additionally, Fond du Lac did not
develop the required progress reports informing the parents of their child’s progress as specified
in the student’s IEP for 5 of the 25 students in our sample.

We concluded that these conditions occurred because school officials did not have procedures in
place to (1) ensure special education and related services were provided in accordance with the
student’s IEP, (2) ensure that parents were informed of their child’s progress as specified in the
student’s IEP, and (3) document that special education and related services were provided to all
students with disabilities in accordance with their IEP.

As a result of the 56 percent error rate in our sample (14 of 25 files reviewed), Fond du Lac was
unable to document that it provided the special education services for the students with
disabilities for which it received a total of $860,851 during our two-year audit period.

The regulations at 34 C.F.R. § 80.12 (a) allow the Department to impose special award
conditions when a grantee is considered “high-risk” by the awarding agency because the grantee
has a management system that does not meet the management standards set forth in the
regulations.




1
  The regulations specifically refer to the SEA (State Educational Agency). However, 34 C.F.R. § 300.267 requires
the Secretary of the Interior to comply with specific sections of 34 C.F.R. Part 300, including 34 C.F.R. § 300.341.
ED-OIG/A06-E0001	                                                                        Page 4 of 7




                                  RECOMMENDATIONS


We recommend that the Assistant Secretary for Special Education and Rehabilitative Services
instruct the Bureau of Indian Affairs to—

1. 	 Obtain assurance from Fond du Lac that it used the $869,851 of IDEA, Part B funds to
     deliver the educational assistance proposed in each of the IEPs for the 196 children with
     disabilities.

2. 	 Instruct Fond du Lac to document all IDEA funded services provided to each current student
     with disabilities and develop a progress report for each child served.

3. 	 Determine whether Fond du Lac should be designated a high-risk grantee using BIA’s
     criteria and consider placing special conditions for all Department of Education awards to
     Fond du Lac. If BIA does not have regulations similar to 34 C.F.R. § 80.12 (a), it should
     consult with the appropriate Department of Education officials to determine the appropriate
     course of action.



                  BIA’S COMMENTS TO THE DRAFT REPORT


BIA agreed to implement our recommendations and agreed that due to the lack of documentation
it could not confirm that five students received services. However, it disagreed with our finding,
based on Fond du Lac’s inability to provide supporting documentation, that 14 students did not
receive services. BIA stated, “Progress reports are developed on the services provided to the
student, to indicate to the parents the progress their child is making toward the goals stated on the
IEP. . . . Therefore, the 20 students with progress reports received services.”



                                     OIG’S RESPONSE


We reviewed BIA’s response to the draft report and have not changed our finding. BIA’s
response indicated that if a progress report was prepared, then OIG should assume that services
were provided. Our audit work did not support this conclusion. Progress reports list the goals as
described in the student’s IEP and also provide comments related to the student’s success or
failure in achieving these goals. However, progress reports do not provide documentation
indicating the duration and frequency of services necessary to achieve these goals and do not
reflect when services were provided. Therefore, we are unable to determine if services were
provided.
ED-OIG/A06-E0001	                                                                         Page 5 of 7


Our audit work disclosed that Fond du Lac did not provide any services to 3 of 14 students
reviewed. Of the three students who did not receive services, we noted that two students were
not listed in their assigned teachers’ attendance books and one student was not receiving services
as described in their IEP. Further, we could not determine what services, if any, were provided
to the remaining 11 students because teacher attendance records were insufficient, inadequate, or
unavailable. For example, when teachers’ attendance books were available, they did not always
reflect the required instructional hours or the entire time period students were to receive services
as described in the student’s IEP. As a result, we did not make any changes to the audit results
section of the report.



                       OBJECTIVE, SCOPE, AND METHODOLOGY


Our objective was to determine whether Fond du Lac administered IDEA, Part B funds in
accordance with requirements, laws and regulations2, and provided services to eligible children
in accordance with the student’s IEP.

To accomplish our objective, we—

       • 	 Reviewed the financial statement and compliance report for the year ended

           September 30, 2002; 

       • 	 Reviewed Fond du Lac’s Special Education application and budget;
       • 	 Reviewed detailed expense reports and payroll information regarding IDEA, Part B
           expenditures. We compared the information to budget information and performed
           reasonableness tests on the information provided.
       • 	 Reviewed the Student Roster – Final Certification Listing for Central Office for the 2001-
           2002 and 2002-2003 School years;
       • 	 Reviewed the Special Education Program Monitoring Review 2002-2003;
       • 	 Reviewed the Annual Report Card for school years 2001-2002 and 2002-2003;
       • 	 Reviewed the 2001 Annual Narrative Grant Report for Fond du Lac;
       • 	 Reviewed Fond du Lac’s Education – Organization Chart and Special Education Staff
           roster;
       • 	 Randomly selected and reviewed files for 25 disabled students, 10 students in school year
           2001-2002, and 15 students in school year 2002-2003. We reviewed the files for IEPs,
           progress reports, and a list of services to be provided. We then compared the list of
           services to supporting documentation (i.e. teacher attendance books, special education
           providers attendance books, and other relevant documentation); and
       • 	 Interviewed various Fond du Lac employees and Department of the Interior/BIA officials
           in Albuquerque, New Mexico, and Minneapolis, Minnesota.

We relied upon the computerized student roster lists provided by Fond du Lac officials for
selecting our sample. We tested the student roster lists for accuracy and completeness by
2
    Code of Federal Regulations 34 Part 300 to 399 Revised as of July 1, 2002.
ED-OIG/A06-E0001                                                                       Page 6 of 7


comparing selected source records to the roster list. Based on this test, we concluded the student
roster list was sufficiently reliable to be used for the sample population.

We conducted our fieldwork at Fond du Lac in Cloquet, Minnesota, on November 5 - 7, 2003.
We discussed the results of our audit with Fond du Lac officials on November 7, 2003. An exit
conference was held with BIA officials on April 27, 2004.

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



                 STATEMENT ON MANAGEMENT CONTROLS


We did not assess the management control structure of Fond du Lac applicable to IDEA, Part B
because this step was not necessary to achieve our audit objective. Instead, we relied on testing
25 of 196 disabled student’s files to determine if Fond du Lac was complying with the
requirements of IDEA, Part. B. Our testing disclosed a 56 percent error rate (14 of 25 instances)
of noncompliance with Federal regulations described in the Audit Results section.



                            ADMINISTRATIVE MATTERS


Statements that managerial practices need improvements, as well as other conclusions and
recommendations in this report represent the opinions of the Office of Inspector General.
Determinations of corrective action to be taken will be made by the appropriate Department of
Education officials.

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
officials, who will consider them before taking final Departmental action on the audit:


                      Troy Justesen, Ed.D.
                      Acting Assistant Secretary
                      Office of Special Education and Rehabilitative Services
                      U.S. Department of Education
                      Federal Building No. 6, Room 3W315
                      400 Maryland Avenue, SW
                      Washington, DC 20202
ED-OIG/A06-E0001                                                                       Page 7 of 7


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 appreciated.

In accordance with 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,


                                                    /Signed/
                                                    Sherri L. Demmel
                                                    Regional Inspector General
                                                      for Audit

Attachment
                                                                                            Attachment
                      , United· States Qepartmenl of the Interior
                                     BUREAU OF INDIANAFFAIRS
                                        . \ WllsbbigtQn, D.C. 20240
IN REPLY REFER TO:


                                                               JUL -9 2004

        Sherri L. Demmel 

        Regional Inspector General for Audit 

        U.S. Department of Education 

        Office of Inspector General 

        1999 Bryan Street, Suite 2630 

        Dallas, Texas 75201-6817 


        Dear Ms. Demmel:

        This letter is written in response to the results of the Office of Inspector General audit of
        the Individuals with Disabilities Education Act (IDEA), Part B requirements at Fond du
        Lac Ojibwe School (Fond du Lac) for the period July 1,2001, through September 30,
        2003. As stated in your letter, the objective was to determine whether Fond du Lac
        administered IDEA, Part B funds in accordance with requirements, laws and regulations,
        and whether they provided services to eligible children in accordance with the student's
        Individualized Education Program (IEP).

        The Office ofIndian Education Programs (OIEF) agrees that due to the lack of
        documentation, it could not be confirmed that 5 stude~tst29% of the sample) received
        services. However, we disagree with the finding that 14 students (56 percent) did not
        receive services for the following reason. Progress reports are developed on the services
        provided to the student, to indicate to the parents the progress their child is making
        toward the goals stated on the IEP. According to the audit findings Fond du Lac
        developed an IEP for all 25 students (sample) and prepared the required progress reports
        for 20 of the 25 students. Therefore, the 20 students with progress reports received
        services.

        The audit report suggests that the school officials did not have procedures in place to
        demonstrate services were being provided to children with IEPs. However, according to
        OIEP's monitoring of Fond du Lac on February 2-3, 2003,'Fond du Lac had Special
        Education Policies and Procedures. Those Special EducationPolicies and Procedures
        were reviewed by OIEP and returned to the school with recommended revisions.

        Generally, there is agreement with the proposed recommendations of your letter.
        Specifically, our response is outlined below:
                                                                        Attachment

1. 
 Draft Audit Report Recommendation: Obtain assurance from Fond du
     Lac that the $869,851 ofIDEA, Part B funds were used to deliver the
     educational assistance proposed in each of the IEPs for the 196 children with
     disabilities.

   Response: A written assurance from Fond du Lac will be obtained through
   the Grant Officer/ Education Line Officer, indicating that IDEA funds were
   used to provide services to the 196 students with disabilities during SY 01-02
   and SY 02-03 in accordance to each student's IEP. In addition, the school
   will be required to provide compensatory education for those students whose
   services are in question. Monitoring of compensatory education will he
   accomplished through a monthly on-site review conducted by the Midwest
   Region Education Line Office as appropriate. A summary report of the
   monthly reviews and technical assistance provided will be documented and a
   copy will be forwarded to CSI and the Deputy Director for OIEP.

2. Draft Audit Report Recommendation: Instruct Fond du Lac to document
   all IDEA-funded services provided to each current student with disabilities
   and develop a program report for each child served.

   Response: The Grant Officer will enter into an agreement with Fond du Lac
   that will outline the following plan. Fond du Lac, will document all IDEA
   funded services for each current student with disabilities and develop a
   program report for each student. The Midwest Region Education Line
   Office will also develop a process to monitor the school and assure that
   services are being provided to students. On a monthly basis Fond du Lac
   will submit to the Midwest Region Education Line Office logs and/or
   documentation to demonstrate a Free Appropriate Public Education is
   provided to all students eligible to receive special education services
   (including Compensatory education that is being provided). The Midwest
   Region Education Line Office will also conduct monthly on-site reviews and
   provide technical assistance ·as appropriate. A summary report of the
   monthly reviews and technical assistance provided will be written and a copy
   forwarded to the CSI and the Deputy Director for OIEP.

3. Draft Audit Report Recommendation: Determine whether Fond du Lac
   should be designated a high-risk grantee using BIA's criteria and consider
   placing special conditions for all Department of Education awards to Fond
   du Lac. IfBIA does not have regulations similar to 34 C.F.R. § 80. 12(a), it
   should consult with the appropriate Department of Education officials to
   determine the appropriate course of action.

    Response: The Grant Officer will make this determination based on the
    criteria for high risk status found in OMB Circular A-I02 and 43 CFR-Part
    12, Section 12.52 Special grant or subgrant conditions for "high-risk"
    grantees.
                                                                                 Attachment

Also, we wou!d like to inform you thatCSI is scheduled to conduct a Continuous
Improvement Monitoring Process (CIMP) validation visit on October 7-8, 2004. The
school will submit an updated Self...Assessment to the CSI thirty (30) days prior to the on­
site validation.

Thank you for allowing this office the opportunity to respond to the audit. If you should
have questions please contact Gloria Yepa at 505-248-7541.

                               Sincerely,




                           ~ard Parisian
                           #\r-uirector, Office of Indian Educati?n Programs