Democracy Prep at the Agassi Campus

Finding 2021-001 - Title I Maintenance of Effort Federal Agency: US Department of Education Federal Program Title: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Pass-Through Agency: Nevada Department of Education Pass-Through Number (s): N/A Award Period: 7/1/2020 - 9/30/2021 Type of Finding: Non-compliance; Weakness in internal control over compliance Criteria of specified requirement: Under 20 U.S. Code section 7901 Maintenance of Effort, a local Education Agency may receive funds under a covered program for any fiscal year only if the State expenditures of the agency and the state for the preceding fiscal year was not less than 90 percent of the combined fiscal effort of aggregate expenditures for the second preceding year. Condition/Context: The School's combined fiscal effort per student and aggregate expenditures for the preceding fiscal year was less than than 90 percent of the second preceding year. Questioned Cost: Under federal guidelines 20 U.S. Code section 7901 the State educational agency shall reduce the amount of the allocation of funds under a covered program in any fiscal year in the exact proportion by which a local educational agency fails to meet the requirement of subsection (a) of this section by failing below 90 percent of both the combined fiscal effort per student and aggregate expenditures (using the measure most favorable to the local agency), if such local educational agency has also failed to meet such requirement (as determined using the measure most favorable to the local agency) for 1 or more fo the 5 immediately preceding fiscal years. The School did not fail to meet such requirement in any of the 5 immediately preceding fiscal years, therefore no questioned costs are being reported. Cause: The School's campus was closed due to COVID-19 causing fewer expenditures during the fiscal year ended June 20, 2020 while also receiving additional COVID-19 related federal funding from the Nevada Department of Education. Effect: The School is not in compliance with 20 U.S. Code section 7901 requirements. Identification of repeat finding: Not a repeat finding. Recommendation: We recommend the School monitor it's combined fiscal effort to ensure compliance with 20 U.S. Code Section 7901 - Maintenance of Effort. Views of responsible officials: The Nevada Department of Education had the option to request a waiver from the U.S. Department of Education regarding the MOE requirement due to the financial complexities resulting from COVID-19, however they failed to do so. The suddenness of the additional COVID related federal funding, combined with the reduction of operating expenses from transitioning to remote leering, presented an unreasonable threshold to meet the MOE requirement in FY2020. Despite this additional context, the MOE waiver request was not carried out and therefore Management has no disagreement with the audit finding.