oversight

Title I funds administered by the Beauregard Parish School District (District), for the period July 1, 2001, through December 31, 2003

Published by the Department of Education, Office of Inspector General on 2004-12-16.

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 




                                                 DEC I 6 2004

Mr. Cecil J. Picard
State Superintendent of Education
Louisiana Department of Education
P.O. Box 94064
Baton Rouge, LA 70804-9064

Dear Mr. Picard:

This Final Audit Report (ED-OIGI A06-E0017) presents the results of our audit of the Title I
funds administered by the Beauregard Parish School District (District), for the period July 1,
2001, through December 31,2003. Our overall objective was to determine whether the District
properly accounted for and used Elementary and Secondary Education Act of 1965, as amended 1
(ESEA), Title I, Part A (Title I), funds in accordance with applicable laws and regulations.
Specifically, we determined whether: (1) Title I expenditures were allowable, approved,
properly documented, and only used for Title I schools; (2) semi-annual certifications were
obtained and retained for non-school wide employees; and (3) Title I funds were properly
allocated.

We provided a copy of this report to the Louisiana Department of Education (LDE). In its
response to our draft report the LDE disagreed with two of our findings and concurred with two
other findings. We have summarized their comments after the recommendation sections of the
report and have included the response as an Attachment.



                                               BACKGROUND 

The Title I program is authorized under the ESEA, as amended by Improving America's Schools
Act of 1994, Public Law 103-382 and the No Child Left Behind Act of 2001, Public Law 107­
110. Title I is the largest elementary and secondary education program, which supplements State
and local funding for low-achieving children, especially in high-poverty schools. Part A of Title
I provides financial assistance through State Education Agencies to local educational agencies
(LEAs) to ensure that all children have a fair, equal, and significant opportunity to obtain a high­
quality education and reach, at a minimum, proficiency on challenging State academic
achievement standards and State academic assessments.

Title I funds may be used by LEAs for school wide or for targeted assistance programs. Under a
school wide program, an LEA may consolidate and use Title I funds with other Federal, State,
and local funds in order to upgrade the entire educational program of a school if not less than 40

1 The No Child Left Behind Act of 2001 reauthorized the ESEA on January 8, 2002 and Improving America's
Schools Act of 1994 reauthorized the ESEA on October 20, 1994.

       Our mission is to promote the efficiency, effectiveness, and integrity o/the Department's programs and operations
ED-OIG/A06-E0017                                                                                           Page 2 of 9


percent of the children enrolled in the school are from low-income families. Federal funds
consolidated in a schoolwide program lose their specific program identity and may be used for
any costs of a schoolwide program. A school that is ineligible for a schoolwide program, or
chooses not to operate a schoolwide program, may use the Title I funds only for the eligible
children having the greatest need for special assistance.

In distributing funds to schools, an LEA must allocate to each participating school an amount for
each low-income child. However, LEAs must initially reserve funds for homeless, neglected,
and delinquent children, for qualified teachers, choice-related transportation, professional
development, parental involvement, and capital expenses for private school children. LEAs also
must report expenditures that were actually disbursed for goods and services and maintain
adequate documentation of those disbursements.

In fiscal year 2003, the U. S. Department of Education allocated $256 million in Title I funds to
Louisiana’s LEAs. The LDE requires districts to submit reimbursement claims for funds already
expended for approval. During our audit period, Beauregard Parish disbursed $1,983,549 to
eight schools. Two of these schools were schoolwide program schools and the other six were
targeted assistance schools during the first and second school year of our audit period. During
the third school year there were three schoolwide and five targeted assistance schools. The
amounts disbursed, by program fiscal year, were—

                                  7/1/01 - 6/30/02             $ 924,448
                                  7/1/02 - 6/30/03             $ 882,635
                                  7/1/03 - 12/31/03            $ 176,466
                                           Total               $1,983,549


                                               AUDIT RESULTS

The District generally accounted for and used Title I funds in accordance with applicable laws
and regulations. However, our audit disclosed that the District (1) did not have the semi-annual
certifications for the targeted assistance Title I employees for both terms of the 2001-2002 school
year; (2) did not properly allocate funds to Title I schools during the 2003-2004 school year; (3)
requested payment in 2002-2003 school year for $8,817 in salary and benefits for an employee
they believed worked 100 percent of the time for Title I, but the employee only worked 50
percent; and (4) requested a duplicate payment of $16,908 for equipment.

FINDING NO. 1 – Semi-Annual Certifications Were Not Completed for the 2001-2002
School Year

The District did not have the semi-annual certifications for the targeted assistance Title I
employees for both terms of the 2001-2002 school year.2 The unsupported amounts consisted of
$473,453 for payroll costs, an estimated $58,173 for fringe benefits costs, and an undetermined
amount for State Group Health Insurance provided to the employees.3 This condition occurred
2
    Schoolwide programs are exempt from certification procedures. 

3
    The District paid a total of $8,794 in State Group Health Insurance for all employees during this school year. 

ED-OIG/A06-E0017 	                                                                        Page 3 of 9


because the District was not aware that semi-annual certifications were required for all targeted
assistance Title I employees until a meeting in November 2003. At that time, the District
established procedures to obtain semi-annual certifications. They obtained semi-annual
certifications for the first term of the 2003-2004 school year and both terms for the 2002-2003
school year. As a result of not obtaining the 2001-2002 school year semi-annual certifications,
the Department of Education could not ensure that all expenditures were for Title I employees.

Office of Management and Budget (OMB) Circular A-87, Cost Principles for State, Local, and
Indian Tribal Governments, Attachment B, Paragraph 11.h.3. (1997) provides that—

        Where employees are expected to work solely on a single Federal award or cost
        objective, charges for their salaries and wages will be supported by periodic
        certifications that the employees worked solely on that program for the period
        covered by the certification. These certifications will be prepared at least semi-
        annually and will be signed by the employee or supervisory official having first
        hand knowledge of the work performed by the employee.


                                   RECOMMENDATION

We recommend that the Assistant Secretary for Elementary and Secondary Education instruct the
LDE to—

1.1 	   Require Beauregard Parish to provide sufficient documentation to support $531,626 plus
        the portion of State Group Health Insurance for each targeted assistance employee or
        refund that amount to the Department of Education.


        LOUISIANA DEPARTMENT OF EDUCATION’S COMMENTS

The LDE disagreed with our finding and recommendation although they acknowledged that
Beauregard Parish did not obtain semi-annual certifications as required for the targeted
assistance Title I employees. The LDE stated, “The District employees at issue in this finding
have reviewed their records, including calendars, e-mails, notes, correspondence, time records,
task surveys, reports, and other grant-related documents. Based on these records they have
verified that they spent 100% of their time on Title I activities and have signed affidavits to that
effect.”
ED-OIG/A06-E0017 	                                                                     Page 4 of 9



                                     OIG’S RESPONSE

After reviewing the LDE’s response, we did not change our finding or recommendation. The
LDE provided after-the-fact certifications. However, the documents provided were made after
our audit period and fieldwork had ended; and, these documents need to be evaluated by the
Office of Elementary and Secondary Education to determine their acceptability.


FINDING NO. 2 – Funds were Improperly Allocated in School Year 2003-2004

The District inappropriately reserved funds prior to allocating funds to all Title I schools in
2003-2004 school year. Specifically, it reserved $15,850 for “Contracted Services” for only two
Title I schools and $92,856 for replacement of computers at all schools. This condition occurred
because the District wanted to ensure that funds were available for computers at all the Title I
schools and for contracted services at two individual schools. As a result, $108,706 spent for
districtwide activities should have been allocated to the Title I schools.

According to 34 C.F.R. § 200.78 (b)(1), an LEA must allocate to each participating
school attendance area or school an amount for each low-income child. Also according
to 34 C.F.R. § 200.77, funds must be reserved for homeless, neglected, and delinquent
children, or for qualified teachers, choice-related transportation, professional
development, parental involvement, capital expenses for private school children, and
other authorized activities, such as school improvement and coordinated services.


                                  RECOMMENDATION

We recommend that the Assistant Secretary for Elementary and Secondary Education instruct the
LDE to—

2.1 	   Verify the District’s recalculation of the per child amount and that the $108,706 was
        correctly allocated to the Title I schools.


        LOUISIANA DEPARTMENT OF EDUCATION’S COMMENTS

The LDE disagreed with our finding and recommendation although they acknowledged that the
District revised its budget. The LDE stated, “The District allocated its remaining funds at
$450.00 per low income child in schools with poverty greater than 55%, $400.00 per low income
child in schools with 50%-55% poverty, and $255.00 per low income child in schools below
50% poverty level. The $15,850 for contracted services and the $92,856 for computers are part
of the school’s allocations.”
ED-OIG/A06-E0017 	                                                                       Page 5 of 9



                                     OIG’S RESPONSE

After reviewing the LDE’s response, we did not change our finding but we did change our
recommendation. We recommended that the LDE verify the District’s recalculation of the per
child amount and that the $108,706 was correctly allocated to the Title I schools. After we
identified the problem, the district provided a revised allocation to the Title I schools to the LDE.
The LDE provided OIG this documentation on the revised budget after our audit period and
fieldwork had ended. This documentation needs to be evaluated by the Office of Elementary and
Secondary Education to determine their acceptability.


FINDING NO. 3 – Payroll Overpayment

The District charged Title I for $8,752 in payroll costs and an estimated $65 for fringe benefits
costs that were unsupported by the semi-annual certification for one employee. This condition
occurred because when the District obtained the semi-annual certifications for 2002-2003, the
employee certified to working 50 percent of the time on Title I. However, Title I was charged
100 percent and no adjustment was made. As a result, the District charged Title I $8,817 in
salary and benefits that were not expended for Title I purposes.

OMB Circular A-87, Attachment A, Paragraph C.3.a. provides—

        A cost is allocable to a particular cost objective if the goods or services
        involved are chargeable or assignable to such cost objective in accordance
        with relative benefits received.


                                  RECOMMENDATIONS

We recommend that the Assistant Secretary for Elementary and Secondary Education instruct the
LDE to—

3.1 	   Refund to the Department of Education $8,817 in Title I funds for salary and benefits
        overpaid.

3.2 	   Ensure the District follows its policies and procedures for collecting and maintaining
        supporting documentation for all expenditures.
ED-OIG/A06-E0017 	                                                                     Page 6 of 9



        LOUISIANA DEPARTMENT OF EDUCATION’S COMMENTS

The LDE concurred with the finding and recommendations. In their response it states, “The
District has refunded $8,817 and has implemented procedures for collecting and maintaining
supporting documentation for all expenditures.”


                                     OIG’S RESPONSE

We reviewed a copy of the check from the District to the State of Louisiana, Department of
Education for the sum of $8,817, and we also reviewed its procedures for collecting and
maintaining supporting documentation. The OIG agrees with this corrective action.


FINDING NO. 4 – Duplicate Payment of $16,908 was Requested and Received

The District received a duplicate payment of $16,908 for equipment charged to Title I during
2002-2003 school year. This occurred because the District used its May 2003 reimbursement
claim to complete its June 2003 reimbursement claim and failed to delete the additional request
for equipment. Additionally, the LDE did not ensure that duplicate payments were not included
in the District’s request. As a result, the District received $16,908 in Title I funds to which it
was not entitled. During the course of our audit, the District took corrective action and submitted
a check to the State of Louisiana refunding the $16,908 in Title I funds. Therefore, we are not
making a recommendation that these funds be returned.


                                  RECOMMENDATION

We recommend that the Assistant Secretary for Elementary and Secondary Education instruct the
LDE to—

4.1 	   Review their reimbursement procedures and ensure that the District only receives
        reimbursement from the State for Title I funds expended during the applicable time
        period.


        LOUISIANA DEPARTMENT OF EDUCATION’S COMMENTS

The LDE concurred with the finding and recommendation. In its response it states, “The District
refunded $16,908 on August 2, 2004.”
ED-OIG/A06-E0017                                                                        Page 7 of 9


Other Matters – Single Audit was not Filed with the Federal Audit Clearinghouse Timely

The District did not ensure the single audit or data collection form for Fiscal Year ending June
30, 2002 was submitted to the Federal Audit Clearinghouse within 30 days of receipt of the
auditor’s report or nine months after the end of the audit period as required by OMB Circular A-
133, § .320(a). This condition occurred because the District, who is responsible for submitting
the single audit and the data collection form, believed their Single Auditor submitted the
information to the Federal Audit Clearinghouse. The Single Auditor did not maintain
documentation that the report or form was submitted. The Single Auditor resubmitted the report
on July 19, 2004. OIG reviewed the single audit for the fiscal year ending June 30, 2002
provided by the District. It was performed in a timely manner and there were no material
findings regarding Title I. The District should ensure that future single audits and data
collection forms are submitted to the Federal Audit Clearinghouse in a timely manner.


                  OBJECTIVE, SCOPE, AND METHODOLOGY

Our overall objective was to determine whether the District properly accounted for and used
ESEA, Title I funds in accordance with laws and regulations. Specifically, we determined
whether (1) Title I expenditures were allowable, approved, properly documented, and only used
for Title I schools; (2) semi-annual certifications were obtained and retained for non-schoolwide
employees, and (3) Title I funds were properly allocated. Our audit period covered July 1, 2001,
through December 31, 2003.

To accomplish our objective, we reviewed the District’s grant application, budget narrative,
project completion reports, monitoring review performed by the State, and single audit reports
for the years ended June 30, 2001, 2002, and 2003. We also reviewed the District’s procurement
policies and procedures applicable to purchases paid with Title I funds. We interviewed various
District employees responsible for the administration of the Title I program and various
Department of Education officials. We reviewed how the District allocated Title I funds for
award years 2001-2002, 2002-2003, and 2003-2004.

For testing purposes, we judgmentally selected a total of $1,329,922 in expenditures from a total
of $1,983,549 reported during our audit period. For payroll expenditures we judgmentally
selected transactions over $1,000 resulting in testing $1,148,618 for payroll paid to 73 of 168
employees whose salaries were charged to Title I. We reviewed the employee certifications,
accounting, and payroll records.

For non-salary transactions, we judgmentally selected all transactions over $1,000 resulting in
testing $181,304 for 45 from 640 transactions during our audit period. We reviewed the
cancelled checks, proper approvals, and supporting documentation.

To achieve our audit objective, we relied, in part, on computer-processed data related to the Title
I program contained in the District’s accounting system. We verified the completeness of the
data by comparing source records to computer-generated data, and verified the authenticity by
ED-OIG/A06-E0017                                                                         Page 8 of 9


comparing computer-generated data to source documents. Based on these tests, we concluded
that the data were sufficiently reliable to be used in meeting the audit’s objective.

We conducted our fieldwork at Beauregard Parish Public Schools Central Office between June
14, 2004, and June 23, 2004. We discussed the results of our audit with Beauregard Parish
officials August 4, 2004. An exit conference was held with LDE officials on August 31, 2004.
We performed our audit in accordance with generally accepted government auditing standards
appropriate to the scope of audit described.


                     STATEMENT ON INTERNAL CONTROLS

As part of our review, we relied on testing of costs charged to the Title I grant to test internal
controls. Our testing disclosed instances of non-compliance with Federal regulations, grant
terms, and cost principles that led us to conclude that weaknesses existed in the District’s
controls over the Title I grant. Those weaknesses and their effects are discussed in the AUDIT
RESULTS section of this report.


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


                      Raymond J. Simon
                      Assistant Secretary
                      Office of Elementary and Secondary Education
                      U.S. Department of Education
                      400 Maryland Avenue, SW
                      Washington, DC 20202

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 greatly appreciated.
ED-OIG/A06-E0017                                                                   Page 9 of 9



In accordance with 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.


                                                   Sincerely,


                                                   Jon E. Kucholtz /s/ (for)
                                                   Sherri L. Demmel
                                                   Regional Inspector General
                                                     for Audit
                               STATE OF LOUISIANA
                                                                                   Attachment
                 DEPARTMENT OF EDUCA TJON
       POST OFFICE BOX 94064, BATONROUGE, LOUISl.ANA 70804-9064
                               Toll Free #: 1-877-453-2721
                               http://www.1ouisianaschools.net


November 22, 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:

On October 8, 2004, the Louisiana Departinent of Education (LDE) received Draft Audit
Reports, ED-OIG/A06-EOOI2 and ED-OIG/A06-EOO'17 . The Louisiana Department of
Education appreciates the opportunity to respond to the Office of Inspector General's
(OIG) findings outlined in its draft audit report. This response was originally due thirty
days after the date of the letter. On October 29,2004, the LDE requested an extension to
respond to the findings. The OIG granted the extension and required that this response be
submitted no later than November 22,2004. .

Attached is a copy of the Louisiana Department of Education's response to the findings.
If you have questions, please contact Dr. Robin G. Jarvis, Assistant Superintendent of the
Office of Student and School Performance, at 225-342-3355 or use the toll-free number
listed above.

Thank you for your cooperation.

Sincerely,


       /'livW
  e 11 J. picardO­
  ate Superintendent of Education



Enclosures

c: 	   Robin G. Jarvis, Ph.D. 

       Beth Scioneaux 



                           ~~An   Equal Opportunity Employer"
                        Louisiana Department of Education
                Response to Draft Audit Report: ED-OIG/A06-EOOI7

                                     Submitted to: 

                                   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 





       The Louisiana of Education appreciates the opportunity to respond to the Office
of Inspector General's (OIG) findings outlined in its October 7, 2004, draft audit report
about the use of Title I funds administered by the Beauregard Parish School District.
This response was originally due thirty days after the date of the letter.

       The Louisiana Department of Education submits the following response to the
findings contained in the audit report relative to Beauregard Parish School District.

I. Response to Finding 1: Certifications Were Not Completed for the 2001-2002
School Year

        The finding concludes the District could not substantiate $531,626 in payroll
expenditures because it did not obtain semi-annual certifications for targeted assistance
Title I employees for both terms of the 2001-2002 school year. OIG recommends the
Louisiana Department of Education provide sufficient documentation to support the
expenditures, or refund the amount to the U.S. Department of Education.

        The Louisiana Department of Education disagrees with this finding. The teachers
whose salaries are the subject of this finding were Title I teachers who spent 100% of
their time on Title I activities.

       Even though the District did not obtain semi-annual certifications, the U.S.
Department of Education routinely accepts after-the-fact documentation to substantiate
employees' time and attendance. The District employees at issue in this finding have
reviewed their records, including calendars, e-mails, notes, correspondence, time records,
task surveys, reports, and other grant-related documents. Based on these records, they
have verified that they spent 100% of their time on Title I activities and have signed
affidavits to that effect.

      Both the General Education Provisions Act (GEPA) and the Education
Department General Administrative Regulations (EDGAR) require the U.S. Department
                                                                                      Attachment



of Education to use proportionality when requiring funds be returned to the federal
government. In determining proportionality, the USDE must follow the principle that:

       A recipient that made an unallowable expenditure or otherwise failed to account
       properly for funds shall return an amount that is proportional to the extent of the
       harm its violation caused to an identifiable Federal interest associated with the
       program under which it received the grant or cooperative agreement. 34 C.F.R.
       § 81.32(a)(1).

Since the employee affidavits establish that the District properly allocated and expended
the questioned payroll charges, the Louisiana Department of Education should not be
required to make any refunds.

Copies of the employee affidavits are attached.


II. Response to Finding 2: Funds were Improperly Allocated in School Year 2003­
2004

        The finding states the District inappropriately reserved funds prior to allocating
funds to all Title I schools in the 2003-2004 school year.

         The Louisiana Department of Education disagrees with this finding. The District
properly reserved and then allocated Title I funds in accordance with Section 1113 of the
Title I statute.

        The District submitted Budget Revision #1 and a revised Attendance Area
Selection Form to the Louisiana Department of Education on May 14, 2004. The District
used the same measure of poverty (free and reduced lunch counts) for identifying,
ranking, and determining the allocation for each eligible attendance area. The District
does not have any schools above 75% poverty and has chosen to rank its eligible
attendance areas from highest to lowest by grade span. Prior to allocating funds to the
attendance areas, the District reserved funds for Administration, Homeless Children
(Section 1113), Highly Qualified Professional Development (Section 1119), and Parental
Involvement (Section 1118).

       The District allocated its remaining funds at $450.00 per low income child in
schools with poverty greater than 55%; $400.00 per low income child in schools with
50%-55% poverty, and $255.00 per low income child in schools below 50% poverty.
The $15,850.00 for contracted services and the $92,856.00 for computers are part of the
school's allocations.

Copies of the approved budget revision and revised Attendance Area Selection Form are
attached.




LDE Response to Draft Audit Report ED-OIG/A06-E0017                                  Page 2
                                                                                    Attachment


III. Response to Finding 3: Payroll Overpayment

         The finding states the District charged the full amount of an employee's salary
and fringe benefits to Title I when the employee only spent 50% of her (his) time on Title
I activities.

        The Louisiana Department of Education concurs with this finding. The District
has refunded $8,817 and has implemented procedures for collecting and maintaining
supporting documentation for all expenditures. A copy of the check from Beauregard
Parish to the Louisiana Department of Education for the refunded amount and a copy of
the district procedures are attached as documentation.

IV. Response to Finding 4: Duplicate Payment of $16,908 was Requested and
Received

      The finding states the District received a duplicate payment for $16,908 for
equipment charged to Title I during the 2002-2003 school year.

       The Louisiana Department of Education concurs with this finding. A fiscal
monitoring of Beauregard Parish School District was performed on May 3-5, 2004.
During this monitoring, our staff noted Finding # TI-FY03-1: Property Expenditures
Claimed Twice for Reimbursement.          The Louisiana Department of Education
recommended the District refund $16,908.00. The District refunded $16,908.00 on
August 2, 2004. A copy of the check from Beauregard Parish to the Louisiana
Department of Education for the refunded amount is attached as supporting
documentation.




 LDE Response to Draft Audit Report ED-OIG/A06-E0017                                 Page 3