oversight

The Talent Search (TS) program at Communities in Schools of San Antonio.

Published by the Department of Education, Office of Inspector General on 2004-01-29.

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

                                   UNITED STATES DEPARTMENT OF EDUCATION 

                                               OFFICE OF INSPECTOR GENERAL 

                                                        KANSAS CITY OFFICE 


                                              8930 Ward Parkway, Suite 2401
                                             Kansas City, Missouri 64114-3302

 AUDIT SERVICES                                                                                                  INVESTIGATION SERVICES
                                                  Telephone (816) 268-0500
FAX (816) 823-1398                                                                                                   FAX (816) 268-0526
                                                       January 29, 2004

   Nancy Reed, Executive Director
   Communities in Schools of San Antonio
   1616 East Commerce, Bldg. #1
   San Antonio, TX 78205

   Dear Ms. Reed:

   This is our final audit report, Control Number ED-OIG/A07-DOOI5, entitled Audit ofthe Talent
   Search (TS) program at Communities in Schools of San Antonio (CIS). The objective of our
   audit was to determine if CIS administered the TS program in accordance with the Higher
   Education Act (HEA) of 1965 and specific TS regulations governing the documentation of
   participant eligibility. You did not concur with our finding and one of our recommendations in
   your November 13,2003, response to our draft report. Based on our review of your response,
   we revised our finding, but not our recommendations. We have summarized the comments after
   the finding and recommendations and the full response is provided as an attachment to this letter.

                                                     AUDIT RESULTS

   CIS did not fully comply with the HEA and specific TS regulations or follow its own grant
   proposal in meeting its target population. The TS grant project did not serve the minimum
   required (600) participant population for an eligible TS program. For the September 1,2001,
   through August 31, 2002, budget period, we estimate that out of the 601 participants claimed as
   served, only 481 were allowable participants. Because CIS did not serve the required minimum
   number of participants, we are recommending that it refund the entire $298,349 expended for its
  ,TS program for the 2001-2002 budget year.

   Regulatory Definitions and Requirements for Talent Search Grantees

   The minimum number of participants required for a TS project is 600 as stated in 34 C.F.R. §
   643.32(b).

   Participants must meet two conditions according to 34 C.F.R. § 643.7




             Our mission is to ensure equal access to education and to promote educational exceUence throughout the Nation.
Final Audit Report                                                                               ED-OIG/A07D0015


           (b) Other definitions . . . Participant means an individual who—
           (1) Is determined to be eligible to participate in the project . . . ; and
           (2) Receives project services designed for his or her age or grade level.

Pursuant to 34 C.F.R. § 643.3, eligibility to participate in a TS project is determined by an
individual meeting citizenship, age, and grade requirements.

The regulation at 34 C.F.R. § 643.32(c)(3) requires grantees to maintain documentation to
support the services rendered. In addition, Department officials provided us examples of
adequate documentation for services provided, such as sign- in sheets.

CIS Did Not Meet the Minimum Required Participant Population for Its Talent Search
Program

The TRIO director of CIS provided us a listing (universe) of 601 participants claimed to be
served during the 2001-2002 budget period. A random sample of 85 names was selected from
the universe and all 85 participant files were reviewed. We found that 68 students met both
criteria (eligible to participate and received a project service) and therefore could be counted as a
participant of the program during the budget period. No eligible service was documented for the
17 exceptions and eligibility also was not documented for one of those exceptions.

                                                       Services

The Blumen data management sys tem1 recorded activities for all of the 17 exceptions. However,
we found that the activities recorded in the Blumen system were not always eligible project
services (e.g., a mailing requesting information from the student or participant file maintenance).
The CIS TRIO director confirmed that nine of our 17 exceptions did not receive an eligible
project service during the budget period of our review. The director believed that an eligible
service was provided to the remaining exceptions, but no hard copy support was available to
verify service data entries.

                                                      Eligibility

The one eligibility exception was due to a missing application. The only Blumen entry for the
student was to close out the student for the 2002-2003 year. CIS did not offer documentation to
support receipt of an eligible service to the student, and therefore, the student is included in the
17 service exceptions.


1
    The system relied on by CIS to report student eligibility and receipt of project services.


                                                            -2­
Final Audit Report                                                                             ED-OIG/A07D0015



Based on our statistical sample, we estimate that CIS only served 481 eligible participants. 2 That
number is significantly below both the target participant population for which CIS was funded to
serve and the minimum required number of participants for a TS program.

We found that CIS had no policy to keep sign- in sheets or review documentation supporting
recorded services during the audit period. In discussions with the TRIO director 3 we learned that
changes have been made to CIS policies and procedures. Our file review substantiates that
changes have been made in required file documentation as well as maintenance of support
documentation. Our review of the Policies and Procedures Manual for the TS Program at CIS
included a memorandum dated September 20, 2002, requiring TS staff to maintain binders at
each campus with one binder to be labeled “Sign- In Sheets.” A revised “CIS TS Student
Registration Form,” dated August 30, 2002, evidences that CIS has modified its monitoring of
eligibility.

Recommendations:

We recommend that the Chief Financial Officer (in collaboration with the Assistant Secretary for
Postsecondary Ed ucation) require

Communities in Schools of San Antonio to:

           1.1 Refund the entire $298,349 expended for its Talent Search program during the 2001­
               2002 budget period.

           1.2 Ensure that only those individuals receiving eligible project services are counted as
               participants.

           1.3 Ensure that its enhanced policies and procedures for documenting participant
               eligibility and project services are followed.

The Department’s Director of Federal TRIO Programs to:

           2.1 Monitor CIS’s current and future Talent Search projects to determine whether the
               organization will be able to meet required minimum participant numbers or should
               have its grant withdrawn.

2
    We are 90% confident that the participants receiving eligible services total 481+/- 8.63 percent.
3
    The current TRIO director at CIS has been in the position since June 1, 2000.


                                                          -3­
Final Audit Report	                                                            ED-OIG/A07D0015



Auditee Response and OIG Comments:

Our draft report identified 21 students for which eligible services were not documented and two
students (also included in the 21) whose eligibility to participate was not documented. CIS
concurred that nine students did not receive eligible services and were claimed because the
Blumen system does not differentiate between administrative and service contacts.

CIS did not concur that the documentation for 12 students’ services was insufficient. In its
response, CIS stated that it, “ . . . does not agree that Blumen service notes (describing the
service activity and time involved) cannot be used as adequate documentation” of services and
that sign- in sheets to support those services are not specifically required by the regulations. CIS
provided printed Blumen reports of contact entries for 12 students. We agree that sign- in sheets
are not required by the regulations and we accepted other forms of documentation that services
occurred. We did not accept the contact entries without additional support based on the
unreliability of the Blumen system, as stated elsewhere in the report. For example, we found one
student’s service entry that erroneously appeared on all students’ “Contact Details for each
Student” report.

We reviewed the additional documents provided by CIS as attachments to its response to support
an eligible service and accepted the additional support for four students:

   •	 We accepted a sign- in sheet as support documentation for two students in our sample.
   •	 We accepted the signed and dated student surveys as support for two other students,
      whose Blumen entries indicated that they were given academic advice as part of a session
      that included completing the survey.

We changed the number of students in the sample not receiving eligible services from 21 to 17 in
the audit results section of the report to reflect the additional documentation of services provided.

CIS also provided a copy of a birth certificate for one of the two eligibility exceptions we
reported to document citizenship. However, that student was one of the nine CIS agreed did not
receive an eligible service, so, although the number of ineligible students was reduced to one in
the report, the student still could not be counted as a participant.

In the Corrective Action section of its response, CIS cited new policies and procedures it has
developed and implemented over the past 18 months and provided examples of some of the
forms initiated to establish the changes. As stated in our report, we agree with CIS that



                                                -4­
Final Audit Report                                                            ED-OIG/A07D0015


implementation of the new and enhanced policies and procedures should ensure that the
participant documentation is consistent with the Blumen database entries.

Finally, CIS did not concur with our recommendation to refund the entire grant monies expended
during the period 2001-02. CIS believed that the penalty was unduly severe against a program
“whose only audit findings were missing sign- in sheets.” We disagree that the only finding was
missing sign- in sheets. In fact, CIS concurred that nine of the 85 sampled individuals (over 10
percent) did not receive an eligible service (one did not even have a registration or application
form). Another significant percentage (eight of the sampled 85) did not have supporting
documentation for any of the Blumen reported services. CIS also listed three previous ED/OIG
audit reports in which the OIG did not recommend the return of all grant funds. The
recommendations in this report are justified by the circumstances of this audit, which differ from
those in the previous audits. Therefore, the recommendation to refund the entire amount of
funds expended during the 2001-2002 budget period remains unchanged. Even with increased
participant numbers, CIS does not meet the regulatory 600 minimum participant number required
for all TS projects.

                                        BACKGROUND

Title IV of the Higher Education Act of 1965, as amended (20 U.S.C. 1070a-11 and 12),
authorizes the TS program, one of the Department’s TRIO programs. The TS program is
governed by the regulations in 34 C.F.R. Part 643. All regulatory citations in the report are to
the regulations in effect as of July 1, 2001.

The TS program provides grants to projects designed to (1) identify qualified youths with
potential for education at the postsecondary level and encourage them to complete secondary
school and undertake a program of postsecondary education; (2) publicize the availability of
student financial assistance for persons who seek to pursue postsecondary education; and (3)
encourage persons who have not completed education programs at the secondary or
postsecondary level, but who have the ability to do so, to reenter these programs (34 C.F.R. §
643.1).

CIS is the San Antonio, Texas branch of the national organization Communities in Schools, Inc.
Established as a non-profit organization in the early 1970’s, Communities in Schools, Inc.
programs and activities are found in 31 states with each location maintaining its own Board of
Directors. CIS, the largest stay- in-school program in San Antonio, began in 1985. The TS
program is one of the multiple programs offered by CIS.




                                               -5­
Final Audit Report	                                                          ED-OIG/A07D0015


CIS was awarded a four-year TS grant covering the performance period September 1, 1998,
through August 31, 2002 (P044A980506). CIS also participates in the Upward Bound TRIO
program. For the 2001-2002 budget period, CIS was awarded $295,013 to provide services to
600 participants and a $10,000 supplemental technology grant awarded to all TS projects.
Actual expenditures for the 2001-2002 budget period included a $3,336 carry forward from the
previous period for a total of $298,349. During this period, CIS served six schools, including
two high schools, three junior high schools, and one academy all located in Bexar County,
Texas. CIS has been awarded a new TS grant for the performance period September 1, 2002, to
August 31, 2006.

                  AUDIT OBJECTIVE, SCOPE, AND METHODOLOGY

The objective of our audit was to determine if CIS administered the TS program in accordance
with the law and specific TS regulations governing the documentation of participant eligibility.
Specifically, we sought to determine whether participants met the twofold requirements of (1)
eligibility and (2) receipt of eligible services during the budget period.

To accomplish our objective, we

   •	 reviewed applicable Federal law and regulations,
   •	 reviewed files relating to the TS project at CIS and at the Department’s TRIO program
      office located in Washington, D.C.,
   •	 interviewed CIS and Department of Education personnel,
   •	 determined whether the TRIO cluster had been audited by CIS’s Certified Public 

      Accountants, 

   •	 obtained and analyzed documents related to the TS project at CIS (e.g., organization
      chart, CIS policies and procedures), and
   •	 randomly selected 85 TS participants from a universe of 601 to test participant eligibility
      and documentation of an eligible service. Files for all participants selected in the sample
      were reviewed.

We relied upon the universe provided to us by the CIS TRIO director for drawing our sample.
We tested the universe for accuracy and completeness by comparing source records to the
universe and the universe to source records. Based on this test, we concluded the population data
was sufficiently reliable to be used for a sample population in meeting the audit’s objective. An
extract of payment and award data from the Department’s Grants and Payments System (GAPS)
was used to corroborate information obtained from CIS’s accounting system. We found that
CIS’s accounting data was sufficiently reliable for our audit purposes.



                                               -6­
Final Audit Report                                                             ED-OIG/A07D0015



Our initial tests of data reliability of the Blumen system and subsequent file reviews disclosed
errors in data entry and inconsistencies in maintenance of the supporting documentation to verify
service entries into the system. The lack of adequate controls over service documentation
prevented our reliance on the Blumen system as a record of receipt of service.

The audit covered the 2001-2002 grant budget period (September 1, 2001, through August 31,
2002). We visited the Department’s TRIO program offices located in Washington D.C., from
July 31, 2002, to August 2, 2002. We conducted fieldwork at CIS from April 28, 2003, to May
8, 2003. We held a field exit conference with CIS officials on May 8, 2003. Our audit was
conducted in accordance with generally accepted government auditing standards appropriate to
the scope of review described above.

                      STATEMENT ON MANAGEMENT CONTROLS

As part of our review we assessed the system of management controls, policies, procedures, and
practices applicable to CIS’s administration of the TS program. Our assessment was performed
to determine the level of control risk for determining the nature, extent, and timing of our
substantive tests to accomplish the audit objectives.

For the purpose of this report, we assessed and classified the significant controls into the
following categories:

   •   Participant service,
   •   Participant eligibility, and
   •   Program record maintenance.

Because of inherent limitations, a study and evaluation made for the limited purpose described
above would not necessarily disclose all material weaknesses in the management controls.
However, our assessment disclosed management control weaknesses, which adversely affected
CIS’s ability to administer the TS program. These weaknesses included noncompliance with
Federal regulations related to documentation of participant services and deficient record
maintenance procedures. These weaknesses and their effects are fully 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.


                                                -7­
Final Audit Report 	                                                         ED-OIGIA07D0015

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 this audit:

               Jack Martin 

               Chief Financial Officer 

               Office of the Chief Financial Officer 

               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.

In accordance with the Freedom ofinformation 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,


 ~~~~
William Allen
Regional Inspector General for Audit

Attachment

cc: 	 Jack Martin, Chief Financial Officer
     Sally Stroup, Assistant Secretary, Office of Postsecondary Education




                                              -8­
                                                                                                                                   1


         .!Jcommunities In Schools
         -'"             HELPING KIDS          PREPARE FOR         LIFE


---as              ----------------------------------------------------------------------
Board of Directors
                                         November 13,2002
Mr. Mark Vallejo, Chaltman
IBM Corp.

Ms. Barbara Alexander

Dr. Rex Ball
Inslitute of Texan CuHurea
                                         Mr. William Allen
Ms. Deborah Epperson
                                         Regional Inspector General for Audit
Ms. MaIY Flores, Treasurer 

Carneiro, Chumney & Co. 
                U.S. Department of Education
Dr. John Folks 

                                         Office offuspector General
Northside ISO 

                                         8930 Ward Parkway, Suite 2401
Mr. Santoa Fraga 

Padgett Stratemann & Co. 

                                         Kansas City, MO 64114-3302
Mr. Leo Gomez 

San Antonio Sports and 

Entertainment 

                                         RE: Response to Draft Audit Report
Ms. Elvia Gonzales 
                         Control No. ED-OIG/A07DOOI5
Nature Conservancy of Texas 


Dr. Daniel Higgins
51. MalYs University
                                         Dear Mr. Allen:
Ms. Babe Canales Inkley, VIce Chair

Hon. Elizabeth Ames Jones 

                                          This letter is in response to the draft audit report dated October
Texas State Representative 

                                          21, 2003, that was sent from your office in regard to the field
Judge Philip Kazen, Jr. 

227"' District Court 

                                          audit conducted in San Antonio, Texas, April 28, 2003 to May
Ms. Gloria Malone
                                          8,2003. The audit covered the 2001-2002 grant budget period
Ms. Amparo Ortiz 

                                          (September 1, 2001 through August 31, 2002) for the
UnivisionlKWEX-TV 

                                          Communities In Schools of San Antonio (CIS-SA) Talent
Judge Laura Parker 

386"' Diatrict Court 
                    Search Program.
Dr. Jade PHman 

Souihwe8llSD 

                                         Finding of audit team: CIS did not meet the minimum required
Ms. Paula PIofchan                       participant population for its Talent Search Program.
Ms. Unda Reitzel 

Educational Testing Services 


Mr. Devld Rosales 

                                               1) Services - Minimum number of participants is 600 with
USAA 

                                                  documented services. Random sample of 85 (out of
Mr. Aaron Seaman 

KBHome 

                                                  601) showed that no eligible services were documented
Judge Paul Talamantez, Jr. 

                                                  for 21 students.
San Antonio Municipal Court 


Hon. Carlos Uresti
Texas Stale Representative                          CIS-SA does not concur with this finding. Blumen data
CIS-SA Founder                                      management system recorded activities for all of the 21
Gen. Herb Emanuel
                                                    exceptions. After reviewing our data we found that 9 of
Executive Director 

Ms. Nancy Reed 
                                    the 21 students received only administrative services
                                                    which rendered them ineligible. The other 12 



•

UnltedW8y                        1616
                                                        COMMUNITIES IN SCHOOLS OF SAN ANTONIO
                                        e. Commerce, Bldg. 1, San Antonio, Texas 78205 • Tel (210) 520-8440 • Fax (210) 520-1104        TRiO
                                                                2


   participants did receive eligible services as evidenced by
   our Blumen records. Services for these 12 students
   ranged from 3 contacts to 19 contaCts.

   The audit team is discounting these services due to the
   lack of sign-in sheets. After careful review, we
   discovered that several sign-in sheets had been lost or
   separated from their files. The regulation in 34 C.F.R.
   643 .32(c)(3) requires grantees to maintain
   documentation to support the services rendered. While
   34 C.F."R. 643.32(c)(3) suggests sign-in sheets as one
   example of documentation, it does not specifically
   require sign-in sheets nor does it discount electronic
   documentation. In the numerous TRIO trainings that our
   staff have received, there are no standards covered that
   address program forms or which data management
   software to use. This is primarily a local program
   decision and reference is made in these areas to TRIO
   Regulations and Legislation. CIS-SA does not agree
   that Blumen service notes (describing the service
   activity and time involved) cannot be used as adequate
   documentation. As such, we are enclosing the Blumen
   service records for these 12 students. We have also
   included some additional back-up documentation that we
   were able to find for several of the students in question:
   a sign-in sheet for the Fall Family Conference that
   includes signatures of two of the students; two 8th grade
   student surveys; and 4 Parent Consent forms.

2) Eligibility - Citizenship was not documented for 2 of the
   21 students according to the audit team. One of these
   participants had been incorrectly entered as non-citizen
   at first but was later corrected. Because of this data
   entry error, the audit team would not accept the
   correction. We are enclosing a copy of the participant's
   birth certificate as well as a statement from the school
   verifying his citizenship. A new checklist has been
   developed to ensure proper documentation in the future.
                                                                    3


Corrective Action
The following enhanced policies and procedures for
documenting participant eligibility and project services have
been developed over the past 18 months. The new policies and
procedures will ensure that participant documentation is
consistent with the Blumen Database.

1) Annual Update/Re-entry forms
  The target area has high mobility rates. In order to
  strengt4en our retention and follow-up strategies, the
  program developed an "Annual Update/Re-entry" form to
  update demographic information and validate continuing
  participant's status. The termination form has been revised
  to include program exit information and reason for leaving
  the program. The termination form is signed by the TRIO
  Director and documented in the Blumen Database.
  Continuing participants are moved to the new fiscal year
  only after completing the Annual UpdatelRe-entry form.
  This form must be signed by the TRIO Director and two
  "eligible" thirty-minute contacts provided before registering
  student into Blumen.

2) Revised Checklist
   We have strengthened our validation of eligibility by
   revising our checklist. The new file checklist includes a
   signature block for the initial advisor, an initial block to
   validate that forms are complete, an initial block to validate
   that two "eligible" thirty minute contacts occurred, and a
   monitoring schedule and signature blocks for the TRIO
   Director and Assistant Director.

3) Sign-In Sheets
   The issue of missing sign-in sheets has been corrected by
   requiring staff to place an individual contact sheet within a
   participant's folder, maintaining original group and
   individual sign-in sheets in a binder at the student's campus,
   and submitting copies of all sign-in sheets to the TRIO
   Director.
                                                                   4


4) Revised Blumen Database Provisions
   Blumen will accept a participant as eligible if (1) all
   reportable fields are completed, and (2) a participant has at
   least one service. Blumen does not distinguish a difference
   between an administrative or program contact. This issue
   has been resolved by requiring program staff to provide
   eligible participants with two "eligible" thirty-minute
   contacts before they are entered into the Blumen Database.
   Group activity codes, staff identification numbers, and pull
   down menus have been revised to ensure consistency
   among remote sites. Also, internal monitoring forms have
   been developed to validate eligibility, contacts,
   demographics and program quality.

5) Semester Updates
   The Director updates the semester for each participant after
   confirming that the participant has been appropriately
   served. Participants with 60 days of inactivity or status
   unknown will be removed from the Blumen Database.

Communities In Schools of San Antonio does not concur with
the recommendations by the audit team that CIS-SA Talent
Search refund all of the grant monies for the year. We believe
this is a very severe action against a responsible and productive
Talent Search Program whose only audit findings were missing
sign-in sheets. I have researched other program audit findings:
Marion College Student Support Services - Control Number
ED-OIG/A05-90045, audit for 1993-94; Mount Senario College
Student Support Services - Control Number ED-OIGIA05­
A0003, audit period 1998-1999; Creighton University Upward
Bound, Upward Bound Math Talent Search Programs - Control
Number ED-OIGIA07 -80027, audit periods 1996-1997 and
1997-1998. The only program that was requested to return all
of the grant monies was Creighton University Talent Search.
They had 63% and 80% (two years) of their student services
undocumented. (They also had numerous deficiencies in other
areas such as financial management and change of program
scope and objectives.) In the other four programs, lack of
documentation ranged from 6% to 74% and they were not
asked to return all of their grant monies. Communities In
                                                                     5


Schools of San Antonio Talent Search Program had 110/0, or 9
of the 85, student records deficient.

Mr. Willie Thomas, Director of CIS-SA Talent Search and
Upward Bound programs for Communities In Schools of San~.
Antonio, has done an excellent job of making certain the
program is running efficiently and effectively. His computer
expertise has been a tremendous asset toward this end. We do
acknowledge the loss of some sign-in sheets and lack of
eligibility ~or one of our students. However, corrective action
has been implemented to avoid the same issues in the future.
The audit team's file review substantiates that changes have
                                   .,..   _~             ""4-';"'"


been made in required file documentation as well ~s _           -­
maintenance of support documentation. In addition, the audit
team acknowledged receiving a memo dated September 20,
2002, requiring Talent Search staff to maintain binders at each
campus with one binder to be labeled "Sign-In Sheets. This
requirement has been implemented. A revised "CIS Talent
Search Registration Form," dated August 30,2002, evidences
that CIS has modified its monitoring of eligibility. We believe
that having to refund the total amount of the grant funds,
$298,000 is extreme and unreasonable. We sincerely hope
after you have read our response to the audit team's findings,
you will reconsider this request.

Please let me know if I can provide any additional infOlmation.

Sincerely,



Nancy Reed
Executive Director


encls.