OCEANSIDE UNIFIED SCHOOL DISTRICT

Criteria: ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))) require a local educational agency to have official written documentation that a student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma in order to remove a student from the graduation cohort. A student who is retained in grade, enrolled in a GED program, or leaves school for any other reason may not be counted has having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort. Condition: During our testing of compliance and controls over the graduation cohort, we identified two instances in which the District was unable to provide supporting documentation to demonstrate that the students enrolled in another school or in a educational program that culminates in the award of a regular high school diploma. Context: Exceptions were identified in two of the sixteen students sampled. Questioned Costs: None. Cause: The District did not maintain adequate documentation to support the removal of a student from the regulatory adjusted cohort. Effect: School site’s graduation rate will be overstated on the school site’s annual report card. Recommendation: We recommend the District train school site staff on allowable documentation to remove students from a graduation cohort as well as other cohort codes. Subsequently the District should assist school sites in developing the record retention process to ensure documentation is available upon request. Views of Responsible Officials: The district will develop a process for properly accounting for and documenting when a student is taken from the regulatory-adjusted cohort. In addition, formal training will be provided to both Counselors and site Guidance Technicians on the manner in which to implement the developed process in order to ensure that documentation is available upon request. This will be provided prior to May of 2024.

FINDING 2021-001 CORONAVIRUS RELIEF FUND (50000) Criteria: Coronavirus Relief Fund (CRF) is to provide payments to cover (1) necessary expenditures incurred to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19); (2) costs that were not accounted for in the governments most recently approved budget as of March 27, 2020; and (3) costs that were incurred during the period that begins on March 1, 2020; and ends on December 31, 2021 (CDE as pass through entity approved through May 31, 2021). Federal Register Vol. 86, No.10/Friday, January 15, 2021/Notices. Condition: The District utilized CRF to purchase a three-year license for the years 2020-21, 2021-22, and 2022-23. This exceeds the period that the funding is allowable for expenditures in connection with the pandemic. Questioned Cost: The contract cost is $186,500. Prorated for 2 years the cost is $124,100, which should not use CRF as the funding source. Context: The purchase occurred in one of a sample of twenty-five expenditures. Two of the three years in the contract fall outside of the period of performance. The finding was isolated and not representative of the population. Cause: The District believed it could pre-pay using CRF beyond the period through May 31, 2021. Effect: Expenditures occurred beyond the period of availability, so other funding sources will need to be used. Recommendation: The cost of the 2021-22 and 2022-23 contract years should use other allowable funding. We recommend the District use the CRF for learning loss expenditures only for the period between March 1, 2020 and May 31, 2021. Views of Responsible Officials: The District has identified allowable expenses that can be charged to this resource in the period of allowability. The District has journaled the expense during that time frame.

FINDING #2019-006: CHILD AND ADULT CARE FOOD PROGRAM (CACFP) ? ACTIVITIES ALLOWED OR UNALLOWED (50000) (Material Weakness) CFDA Number and Title: 10.558 - Child & Adult Care Food Program (CACFP) Federal Grantor Name: U.S. Department of Agriculture; Passed through California Department of Education Criteria: In accordance with 7 CFR Section 226.15(e)(13), CACFP reimbursement payments shall be used solely for the conduct of the CACFP food service operations, principally for the benefit of enrolled participants. School food authorities (SFAs) participating in both the School Nutrition Program (SNP) and the Child and Adult Care Food Program (CACFP) are required to track their respective revenues and expenditures separately. Condition: During our compliance procedures related to activities allowed or unallowed, we noted that the District does not separately track the expenditures of CACFP reimbursement payments received. Instead, these expenditures appear to be commingled with the expenditures of the SNP. Cause: Lack of adequate accounting and recordkeeping procedures in relation to program expenditures. Effect: The District could not provide a complete detail of program expenditures in relation to the current year CACFP meal reimbursements. As a result, we were not able to confirm compliance with the requirements outlined above. Context: The monthly reimbursement payments reported for 2018-19 fiscal year totaled $824,585. Of this amount, only $9,798 in program expenditures were recorded to the appropriate Standardized Account Code Structure (SACS) resource code. Questioned Costs: $814,787, the net amount of 2018-19 reimbursement payments that could not be confirmed as being used for allowable cost activities. Repeat Finding: This is not a repeat finding. Recommendation: Program financial activities should be tracked using the appropriate SACS resource code within the Cafeteria Fund. The California School Accounting Manual (CSAM) Procedure 310 provides additional guidance in this area. Views of Responsible Officials: See Corrective Action Plan beginning on page 91.