WAPATO SCHOOL DISTRICT

The District’s internal controls were inadequate for ensuring compliance with Title I grant requirements for assessment security system. Assistance Listing Number and Title: 84.010 - Title I Grants to Local Educational Agencies Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Education Pass-through Award/Contract Number: 270350, 270352, 270367, 271500, 270351, FPG-2035 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objective of Title I program is to help local education agencies improve the teaching and learning of children who are at risk of not meeting academic standards and reside in areas with high concentrations of children from low-income families. During fiscal year 2023, the District spent $2,173,875 in Title I program funds and administered the Washington Comprehensive Assessment of Science, Washington State Smarter Balanced Assessment Consortium, and World-Class Instructional Design and Assessment Screener standardized tests. Federal regulations require recipients of federal awards to establish and maintain internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. States, in consultation with school districts, must establish and maintain an assessment system that is valid, reliable and consistent with relevant professional and technical standards. States must have formal, well-documented policies and procedures to maintain test security and ensure that districts implement these policies and procedures for all standardized tests. The Office of Superintendent of Public Instruction (OSPI) provides templates for all districts to document their test security and building plans for each assessment they administer. OSPI also provides detailed guidance and manuals on test security. Description of Condition The District did not have adequate controls for ensuring it complied with assessment system security requirements. Specifically, the District did not have written test security and building plans in place for six of seven school buildings that administered standardized tests, as required by OSPI. Further, the District had a test security and building plan for one building, but it was missing several elements. Specifically, the plan did not identify the people who will: • Establish user accounts to Test Information Distribution Engine (TIDE) and when the accounts will be established • Review and address technical requirements • Verify that student test settings and accessibility feature settings are correctly entered in TIDE before the administration of a summative test • Ensure students using accessibility features practice with the secure login to become familiar with the accessibility features prior to taking a summative test • Ensure all students participating in testing online complete the training test, practice test or interim assessment by domain or subject at least once before taking a summative test • Establish and approve the chain of custody for secure test materials, including tracking materials when they are passed to and from the District, school, test administrator, student and returned to the scoring contractor We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition District staff were unaware of the requirement to have a test security and building plan at each building where tests are administered and that plans need to address all elements identified in OSPI’s templates. Effect of Condition Without a documented plan, the District cannot demonstrate it implemented and complied with OSPI’s assessment security requirement for all standardized tests it administered in fiscal year 2023. Recommendation We recommend the District improve internal controls and establish policies and procedures to comply with OSPI’s assessment system security requirements. Specifically, the District should establish written test security building plans for all standardized tests, as OSPI requires, and ensure that plans contain all required elements. District’s Response Starting with the 2023-24 Spring Smarter Balanced / WCAS administration, the district will require all buildings to complete a Test Security and Building Plan designed using the OSPI template. This will be completed at all buildings that conduct SBA/WCAS testing, including our Online Academy. This will be expanded to include the WIDA ACCESS and ALT-ACCESS and the remaining buildings for the 2024-25 assessment year. All Test Security and Building Plans will be sent to the District Assessment Coordinator at the conclusion of each assignment window for review. Any aspect of the plan found incomplete, missing, or otherwise not meeting standard will be sent back to the Building Assessment Coordinator for completion with guidance from the DAC and then returned to the DAC for final review. Auditor’s Remarks We thank the District for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 20 U.S. Code section 6311(b)(2)(B)(iii) requires state and local education agencies to establish and maintain valid and reliable assessment systems, consistent with relevant professional and technical standards.

The District did not have adequate controls for ensuring compliance with procurement requirements for the Special Education Program. Assistance Listing Number and Title: 84.027 Special Education – Grants to States 84.027 COVID-19 Special Education – Grants to States 84.173 – Special Education – Preschools Grants 84.173 – COVID-19 Special Education – Preschool Grants Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 312366, 307709, 371327, 389033, 367108 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objective of the Special Education program is to ensure students with disabilities receive a free and appropriate public education. The program has specifically designed instruction addressing the unique needs of each eligible student. During fiscal year 2023, the District spent $990,471 in federal funds through its Special Education program. Federal regulations require recipients to establish and maintain internal controls to ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods and services, governments must apply the more restrictive of federal, state or local laws by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase. Federal regulations and District policy require the District to solicit sealed bids or competitive proposals for personal services more than $250,000. The District may procure services using noncompetitive proposals when the service is available only from a single source. The District must also keep documentation supporting the procurement method it used. Description of Condition The District did not follow its policy and federal regulations for formally procuring a contract for personal services costing more than $250,000. Specifically, the District contracted with a vendor to provide special educations services totaling $285,001 and charged $189,997 to the federal program for these services. We determined the District should have formally procured this contract. We consider this a deficiency in internal controls to be material weakness that led to material noncompliance. Cause of Condition Because the District had been unable to fill two special education positions since 2019, it contracted with a vendor to provide annual special education services. The District’s contract with the vendor included an hourly rate but did not include a total contract amount. The District did not estimate how much of the contract would be paid through federal funds to determine whether formal procurement would be necessary. Effect of Condition Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractor. Additionally, the District cannot demonstrate that it complied with federal regulations services. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Recommendation We recommend the District follow its procurement policy and federal regulations for services and purchases it makes with federal funds. District’s Response Special education staff for services, such as school psychologist, COTA’s, and occupational therapist, are very difficult to attract, hire, and retain. The District has struggled to hire quality staff for these positions since 2019. We have had several openings for these positions with limited viable candidates to select from. In a rare occasion, we have hired staff for these services, the District is unable to retain them due to other offers from consulting agencies. It is difficult to compete with outside agencies and their working amenities. With these limitations, the services to special education students must be provided. We revert to outside agencies that offer temporary staff to provide these services to students. These services cannot be postponed as the District will find itself out of compliance. The District understands the finding issued under procurement for special education services. In order to ensure we are following District policies, we plan to implement a check list for procuring contract services. The checklist will provide detail steps that must be followed prior to securing a contract with any vendor. We will re-train all administrative staff on the procurement policy and procedure 6220 as well as the new checklist that will be implemented. On an annual basis, policy 6220 and the checklist will be reviewed at our administrative nuts and bolts meeting. This will ensure all administrative staff have a review of the policy and checklist for procuring contract services. In addition, the business office will implement a process to issue a purchase order for all contract services that will clearly detail the amount of the contract. Auditor’s Remarks We thank the District for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR 200, Uniform Guidance, section 319, Competition, establishes the requirement that all procurement transactions with Federal funds be conducted in a manner providing full and open competition consistent with standards of this section. Title 2 CFR Part 200, Section 320 – Methods of procurement to be followed, describes each allowable procurement method.

The District did not have adequate internal controls for ensuring compliance with allowable activities and costs and restricted purpose requirements. Assistance Listing Number and Title: 32.009, COVID-19 ? Emergency Connectivity Fund Program Federal Grantor Name: Federal Communications Commission Federal Award/Contract Number: COVID-19 ECF202103812 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $587,790 Background The Emergency Connectivity Fund (ECF) Program provides funding to meet the needs of students and school staff who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning. This is referred to as ?unmet need.? In fiscal year 2022, the District spent $587,790 in ECF Program funds to purchase laptops and Wi-Fi hotspot services for students. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Allowable activities and costs ECF Program recipients must only seek reimbursement for the eligible devices and services provided to students and staff with unmet need. Recipients are prohibited from seeking and receiving reimbursement for eligible equipment and services purchased for use solely at the school or held for future use (i.e., warehousing). Office of the Washington State Auditor sao.wa.gov Restricted purpose ? unmet need When submitting applications to the Federal Communications Commission (FCC), schools only had to provide an estimate of their students? and staff?s unmet need. However, when requesting reimbursement, the District could only request program funds for eligible equipment and services provided to students and school staff with actual unmet need. Restricted purpose ? per-location and per-user limitations The FCC imposed per-location and per-user limitations to maximize the use of limited funds. Under the program, eligible schools could only be reimbursed for one connected device and Wi-Fi hotspot per student or school employee with unmet need, and no more than one fixed broadband connection per location, such as a student?s or employee?s residence. Description of Condition Allowable activities and costs/restricted purpose ? unmet need The District estimated unmet need for eligible equipment and services when it applied for ECF Program funds. However, our audit found the District?s internal controls were ineffective for ensuring it requested reimbursement only for eligible equipment and services provided to students with a documented unmet need. Specifically, the District purchased laptops and Wi-Fi hotspot services, based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $587,790. However, the District did not maintain documentation showing it provided each laptop and Wi-Fi hotspot service paid with program funds to a student or employee with unmet need. Restricted purpose ? per-location and per-user limitations Our audit found the District?s internal controls were ineffective for demonstrating it complied with the FCC?s per-location and per-user limitations. Specifically, the District did not maintain documentation showing it monitored or had a tracking process in place to ensure it only provided one device or connection per user and location. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition Allowable activities and costs/restricted purpose ? unmet need Although employees in the District?s Finance Department knew that another department received an ECF Program award, they said they were unaware of all its regulations. Further, they did not know about the requirement to request reimbursement only for actual unmet need, and thought the estimate of unmet need provided during the application process was sufficient to comply with this requirement. Restricted purpose ? per-location and per-user limitations Staff said they did not know the District needed to maintain documentation at the time of distribution showing it only provided one device and/or connection per student and employee with unmet need. Effect of Condition and Questioned Costs Allowable activities and costs/restricted purpose ? unmet need Because the District did not have documentation supporting whether it provided eligible equipment and services to students with actual unmet need, it cannot demonstrate compliance with the program?s requirements. Given the nature of the program and circumstances, it is likely that at least some of the equipment and services the District charged to the award addressed unmet needs. However, the lack of a documented assessment of students? actual unmet need means that all costs are unsupported. Since we do not have a reasonable basis for estimating how much of the District?s expenditures are allowable, we are questioning all unsupported costs. Federal regulations require the State Auditor?s Office to report known questioned costs that are greater than $25,000 for each type of compliance requirement. We question costs when we find the District does not have adequate documentation to support expenditures. Restricted purpose ? per-location and per-user limitations Because the District did not maintain documentation, it cannot demonstrate compliance with the FCC?s restrictions. Additionally, we cannot determine whether the District only provided one device or connection per user and location. Office of the Washington State Auditor sao.wa.gov Recommendation We recommend the District work with the granting agency to determine audit resolution. We further recommend the District establish and follow internal controls to ensure staff fully understand the requirements for ECF awards. Specifically, the District should: ? Request reimbursement only for eligible equipment and services provided to students with unmet need, and maintain documentation demonstrating compliance ? Monitor to confirm it provides no more than one device per student and employee, and no more than one broadband connection per location, in compliance with the ECF Program?s requirements District?s Response During the COVID -19 pandemic, the District applied for ECF funding for hotspots and chrome books for our students. The Wapato School District was not a 1 to 1 District in regards to devices, but we had to pivot quickly to ensure our students had a device and connectivity. This would ensure we could provide instruction during remote learning and school closures during the pandemic. The District provided a survey to all students/parents seeking information regarding connectivity and devices. The survey results showed many of our students did not have adequate connectivity or a device to stream videos, which is needed or remote instruction. Also, the District did not receive responses from all families as they did not have connectivity to do so. The District used its library check out system to issue Chromebook and hot spots to students. The process was for students who needed a device to communicate this to their school building, then they would be directed to the library to obtain a device. The student?s requests were an unmet need. Although the student/parent did not sign a form to document unmet need, the District felt the request for a device was sufficient. As for the per location and per user limitation, the District?s library system was used to provide reports during the audit process, but it was determined the reports were not run at the time of reimbursement. The Wapato School District is a District with over 90% poverty level, the District?s priority was to ensure students were provided devices for instruction and connectivity during the pandemic. The District will strengthen its controls over documenting unmet need for students as well as maintaining reports that show per location/ per user limits at the time ECF funding is requested. Our IT department has started to implement a formal process, which includes a written application for our student/family to submit prior to receiving a device. They are also working on written instructions for the deployment of devices and documentation to be obtained. These instructions will be provided to all school buildings. Auditor?s Remarks The State Auditor?s Office is sympathetic to the significant challenges the District faced during the COVID-19 pandemic, and deeply respects its commitment to students learning despite these challenges. SAO knows that in many cases, governments across Washington received significant pandemic-era federal funds without also receiving clear guidance on how to use them. Then, and now, SAO continues to advocate for clear, timely guidance from federal agencies to make sure Washington governments are not put in a difficult position at audit time. However, when auditing federal programs of any kind, governments must provide documentation to substantiate that they met the grant requirements. As is our practice and audit standards require, we will review the status of this finding during our next audit. We value our partnership with the District in striving for transparency in public service Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 47 CFR Part 54, Universal Service, Subpart Q, Emergency Connectivity Fund, describes the ECF Program requirements.

Wapato School District did not have adequate internal controls to ensure compliance with federal suspension and debarment requirements. CFDA Number and Title: 84.027 Special Education Grants to States 84.173 Special Education Preschool Grants Federal Grantor Name: Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 306830, 366320 Questioned Cost Amount: $0 Description of Condition The objective of the Special Education program is to ensure students with disabilities receive a free and appropriate public education. The program has specifically designed instruction that addresses the unique needs of an eligible student. During fiscal year 2020, the District received $768,568 in Special Education funding, which was spent on salaries and benefits, supplies, materials, and purchased services. Federal requirements prohibit grant recipients from contracting with or making sub-awards to parties suspended and debarred from doing business with the federal government. Whenever the District contracts for goods or services equal to or exceeding $25,000 paid all or in part with federal funds, it must verify that contractors have not been suspended or debarred or otherwise excluded. This verification may be accomplished by (1) checking the federal Excluded Parties List System (EPLS) maintained by the U.S. General Service Administration, (2) collecting a written certification from the contractor, or (3) adding a clause or condition into the contract in which the contractor states it is not suspended or debarred. . The District must perform one of these activities to meet this requirement before entering into a contract and maintain documentation to demonstrate compliance. The District did not have effective internal controls to ensure contracts for hourly contractors exceeding $25,000 were not suspended or debarred. The District awarded one contract more than $25,000 and did not obtain a written certification, insert a clause into the contract or review EPLS to verify the contractor was not suspended or debarred from participating in federal programs. The District paid this contractor $58,164 during fiscal year 2020. We consider this deficiency in internal controls to be a material weakness. The issue was not reported as a finding in the prior audit. Cause of Condition The District is aware of the requirements and has processes in place to verify the suspension and department status of its contractors. The District did not anticipate that this contract would exceed $25,000 and staff did not check the contractor?s suspension and debarment status prior to entering into the agreement. Effect of Condition and Questioned Costs Without adequate internal controls over suspension and debarment requirements, the District cannot ensure federal funds are paid only to contractors who are eligible to participate in federal programs. Any payments of program funds to an ineligible contractors would be unallowable and subject to recovery by the funding agency. We verified that the contractor was not suspended or debarred. Therefore, we are not questioning costs for these payments. Recommendation We recommend the District implement and follow internal controls to comply with suspension and debarment requirements and ensure contractors paid $25,000 or more in federal funds are eligible to participate in federal programs before entering into contracts. District?s Response The District understands the finding regarding suspension and debarment. The District does have internal controls in place to ensure vendors are reviewed for suspension and debarment prior to entering into a contract. The District has the certification statement included on personal service contracts and the business office personnel check for the EPLS search page for all purchase order requisitions. In this instance, the vendor contract did not specify the total amount of cost for services and it was listed as an hourly amount. Also a purchase order was not requested for this vendor. These two issues contributed to the oversight of suspension and debarment check. The District will ensure all steps are followed by including a check list for all administrators and directors detailing the process for entering into contracts with vendors using federal funds. This will ensure the process is understood by all staff. This will be presented to them at the annual start of the year meeting. We will also review this with them at the monthly administrative meeting. Auditor?s Remarks We appreciate the District?s commitment to resolving this issue and for its cooperation and assistance during the audit. We will review corrective action taken during the next regular audit. Applicable Laws and Regulations The American Institute of Certified Public Accountants define significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, paragraph 11. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Department and Suspension (Nonprocurement) establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.