Quincy School District No. 144Local Government

The District did not have adequate internal controls to ensure compliance with eligibility requirements when allocating funds to Title I schools. CFDA Number and Title: 84.010 ? Title I Grants to Local Educational Agencies Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: 203094, 270064, 270049, 271019 and 270728 Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Questioned Cost Amount: $0 Background The federal Title I program?s objective is to improve the teaching and learning of children who are at risk of not meeting state academic standards and who reside in areas with high concentrations of children from low-income families. During fiscal year 2019, the District spent $931,302 in Title I federal funding. Federal regulations require recipients of federal awards to establish and maintain effective internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring of program controls. Federal regulations require the District to allocate Title I grant funds to each attendance area or school in rank order based on the total number of children from low-income families residing in the area or attending the school. A school or school attendance area is generally eligible to participate if the percentage of children from low-income families in the District as a whole is at least 35 percent. The District must serve areas or schools with over 75 percent students from low-income families in rank order first. Then it may serve areas or schools with a rate of low-income families between 35 percent and 75 percent in rank order. Districts are expected to use the enrollment report from the same month each year to ensure consistency in ranking. Description of Condition The District had a process in place, but controls were not effective to ensure it complied with program eligibility requirements. The District used the incorrect enrollment report when calculating the percentage of low-income families and assigning rank order. We consider this internal control deficiency to be a material weakness. This issue was not reported as a finding in the prior audit. Cause of Condition District staff did not know that the enrollment figures used to prepare the grant application were from the wrong reporting month. Additionally, the District did not perform a secondary review of the Title I application before submitting it to ensure figures used were accurate. Effect of Condition The District over-allocated program funding to Quincy Innovation Academy. The Academy was allocated per-pupil expenditures of $387, not the required $277, resulting in overfunding of $3,420. Additionally, the District under-allocated Program funding to three schools as follows: ?Monument Elementary School was allocated per-pupil expenditures of $282, not the required $283, resulting in an underfunding of $150. ?Mountain View Elementary School was allocated per-pupil expenditures of $279, not the required $280, resulting in an underfunding of $150 ?Quincy Middle School was allocated per-pupil expenditures of $268, not the required $278, resulting in an underfunding of $3,090 Recommendation We recommend the District strengthen and follow internal controls to ensure it allocates funds to school attendance areas properly. Internal controls should include a review for accuracy of the information used to determine the percentage of low?income families to assign rank order. District?s Response The District will enhance internal controls to mitigate keying errors when reporting enrollment numbers ensuring funds are allocated to buildings in rank order. These internal controls will include adding an additional staff member to review data and provide a formal structure to document the process below: ?Collect Enrollment and free/reduced count documentation to check accuracy. ?Enter verified information into the iGrant to accurately calculate building rank order and allocations. ?Review the iGrant and supporting documentation prior to the final submission to OSPI, ensuring alignment with the reports and Public Schools Breakdown Page in iGrants. All documentation will continue to be kept on file for audit/program review. Auditor?s Remarks We appreciate the District?s commitment to resolving the issue noted and will follow up during the 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. 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 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 34 CFR, Part 200, sections 200.77 and 200.78 establish the requirements for reservation of funds by a Local Education Agency (LEA) and allocation of funds to school attendance areas and schools, respectively.

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