LOS ANGELES UNIFIED SCHOOL DISTRICTLocal Government

Criteria Per 7 CFR 225.15 (c)(1), “Sponsors shall maintain accurate records justifying all meals claimed and documenting that all program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. The sponsor's records shall be available at all times for inspection and audit by representatives of the Secretary, the Comptroller General of the United States, and the State agency for a period of three years following the date of submission of the final claim for reimbursement for the fiscal year.” Per 7 CFR 226.10 (c), “Claims for Reimbursement shall report information in accordance with the financial management system established by the State agency, and in sufficient detail to justify the reimbursement claimed… In submitting a Claim for Reimbursement, each institution shall certify that the claim is correct and that records are available to support that claim.” Condition During the procedures performed over meals claimed under the School Breakfast Program in the fiscal year 2025, it was noted that monthly meal counts recorded in the District’s Cafeteria Management System (CMS) were not fully supported by underlying documentation (e.g., meal count sheets). We sampled a total 25 daily meal counts from the months of September 2024, November 2024, and February 2025. We then validated that the meal counts recorded in the CMS for Breakfast and Lunch were supported by either meal count sheets used at the school sites or by the point-of-sale (POS) system data. As a result of our testing, we noted variances in four (4) daily meal counts between the CMS count and the meal count sheets for Breakfast in Class. Breakfast counts were overclaimed by 111 based on a total sample of 3,793 meals tested from a total reported population of 12,688,107 meals. Our samples were statistically valid samples.   Cause and Effect The condition is as a result of human error while manually counting the paper meal count sheets for Breakfast in Class. Inaccurate claims of meal counts could lead to questioned costs. Questioned Costs Federal regulation 2 CFR 200.516 (a)(3) requires the auditor to report questioned costs when likely questioned costs exceed $25,000. An overclaim of $315 was identified, resulting from overclaimed quantities of 111 breakfasts multiplied by the reimbursement rate of $2.84 under the School Breakfast Program – Severe Need. Recommendation We recommend the District continue to strengthen its controls over the meal claim process to ensure that meals are accurately counted, input into CMS, and claimed for reimbursement.

Criteria 2 CFR section 200.403, Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient. (d) Be accorded consistent treatment. For example, a cost must not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian Tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing requirements of any other federally-financed program in either the current or a prior period. See § 200.306(b). (g) Be adequately documented. See §§ 200.300 through 200.309. (h) Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). 10th Edition Procurement Manual issued by the District in September 2023, Chapter 8 – What to Do When Item or Services Are Received A. Online Goods Receipts Prior to entering an online Goods Receipt (GR), schools and offices must have a copy of the vendor invoice and Purchase Order (PO). They are responsible for verifying the accuracy of the order and entering the “online receiver” into SAP immediately after delivery of materials. Partial receiving is acceptable to account only for materials actually received. Payments are processed based on materials that have been received online.   F.1. Payment for Materials Accounts Payable will process payment when the following three items are matched in SAP: (1) Purchase Order, (2) Goods Receipt, and (3) vendor invoice. F.2.c. Contracted Professional Services Accounts Payable will process payments for contracted professional services when the following four items are matched: executed contract/amendment, Purchase Order, vendor invoice, and approved authorization for payment. F.3. Contract Close-Out Upon contract expiration or termination, the District must ensure all deliverables have been received, final invoices paid, indirect costs settled, and any unspent funds unencumbered and transferred to the appropriate District account. Condition As part of our review of cash disbursement expenditures, we selected a statistically valid sample of forty (40) cash disbursement transactions from each of the following programs: Title I, Title IV, and Perkins. We reviewed the supporting documentation for these transactions to determine whether the expenditures were allowable under program regulations, accurately charged to the programs, and appropriately supported in accordance with 2 CFR Section 200.403 and the District Procurement Manual. Title I: From the $3,265,728 sample tested (out of $48,286,535 total disbursements), we identified one (1) purchase order with a variance between the Goods Receipt (GR) and vendor invoice (IR) amounts. This discrepancy resulted in an overstatement of reported expenditures by $21,394. The District subsequently corrected this by reversing the amount to the expenditure accounts in FY 2026. Title IV: From the $560,572 sample tested (out of $9,999,536 total disbursements), we identified one (1) purchase order with a variance between the GR and IR amounts, resulting in an overstatement of reported expenditures by $94,500. The District subsequently corrected this by reversing the amount to the expenditure accounts in FY 2026. Perkins: Additionally, from a $329,432 sample (out of $5,738,606 total disbursements), we identified seven (7) disbursements totaling $868 that lacked adequate proof of delivery of materials. Supporting documentation, such as signed delivery receipts or equivalent evidence of goods received, was not available for these transactions. Cause and Effect These conditions occurred because adjustments were not made to the GR amounts to reflect changes in goods or services received after the initial recording. The unadjusted GR balances led to variances between the GR and IR amounts, resulting in overstatements of reported expenditures for the affected programs. In addition, the lack of adequate proof of delivery of materials occurred because GR were entered without supporting documentation to substantiate that the materials were received. This increased the risk of payment for goods not received, misstatement of expenditures, and noncompliance with federal cost documentation requirements under 2 CFR section 200.403(g). Questioned Costs • Title I (AL No. 84.010): $21,394 overstated due to GR-IR variance. • Title IV (AL No. 84.424A): $94,500 overstated due to GR-IR variance. • Perkins (AL No. 84.048): $868 lacked sufficient supporting documentation that the goods were received. Recommendation We recommend that the District: 1. Strengthen review and reconciliation procedures to ensure that adjustments to the Goods Receipt (GR) are made promptly to reflect actual goods or services received. 2. Enforce documentation controls to require that all Goods Receipts are supported by adequate proof of delivery (e.g., signed delivery receipts, receiving reports, or equivalent evidence) before processing payments. 3. Provide staff training on documentation and reconciliation requirements to ensure compliance with federal cost principles and the District Procurement Manual.

Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: “ (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i). Title I: During our review of a sample of thirty (30) payroll expenditures, we noted the following exceptions: 1. One (1) employee’s timesheet reflected an inconsistency between the hours submitted and the records in SAP. The SAP recorded fifty-four (54) regular work hours instead of the accurate sixty (60) regular work hours. The six (6) hours variance was incorrectly classified as full pay illness instead of regular time pay. The District subsequently corrected this discrepancy. 2. One (1) timesheet amounting to $613 was not signed by the employee and contained a supervisor’s signature that was obtained after the submission deadline. Perkins: During our review of a sample of thirty (30) payroll expenditures, we identified three (3) timesheets contained supervisor’s signatures that were obtained after the submission deadline. The total amount of payroll expenditures associated with these exceptions was $20,067. Cause and Effect The discrepancies occurred due to inadequate review and verification of employee timesheets prior to payroll processing, as well as a lack of timely completion of required authorization signatures. Failure to ensure the accuracy and completeness of timesheet records increases the risk of payroll misstatements, improper classification of labor costs, and potential noncompliance with internal control and documentation requirements under Federal grant regulations. Questioned Costs There were no questioned costs identified as a result of the discrepancy in hours reported, as there was no difference in the amount of pay between regular time pay and full pay illness. Likewise, there were no questioned costs related to the missing or untimely signatures on timesheets, as the payroll costs incurred were still considered allowable under the respective programs (Title I and Perkins), despite the timing and documentation issues. Recommendation We recommend that the District strengthen and reinforce internal controls over the preparation, review, and approval of employee timesheets to ensure the accuracy and completeness of payroll records. This should include implementing procedures to reconcile timesheet data with system records (e.g., SAP) prior to payroll processing, ensuring that hours worked and pay classifications are correctly reported. In addition, the District should enforce policies requiring all timesheets to be signed by employees and approved by supervisors prior to the submission deadline. The review and approval process should be adequately documented to provide evidence of compliance with established payroll and Federal grant requirements.

Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.

Criteria Annual Report Card, High School Graduation Rate An SEA and its LEAs must report graduation rate data for all public high schools at the school, LEA, and State levels using the 4-year adjusted cohort rate under 34 CFR section 200.19(b)(1)(i)-(iv). Additionally, SEAs and LEAs must include the 4-year adjusted cohort graduation rate (which may be combined with an extended-year adjusted cohort graduation rate or rates) in adequate yearly progress (AYP) determinations. Graduation rate data must be reported both in the aggregate and disaggregated by each subgroup described in 34 CFR section 200.13(b)(7)(ii) using a 4-year adjusted cohort graduation rate. Only students who earn a regular high school diploma may be counted as a graduate for purposes of calculating the 4-year adjusted cohort graduation rate. To remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a General Educational Development (GED) program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort (Title I, Sections 1111(b)(2) and (h) of ESEA (20 USC 6311(b)(2) and (h)); 34 CFR section 200.19(b)). Section 8.3 of the LAUSD Attendance Manual states School staff shall document students who withdraw from the school. School staff shall follow Appendix J-2: Elementary School Withdrawal Symbols and Appendix J-3: Secondary School Withdrawal Symbols when recording withdrawal data. Section XI.B of LAUSD REF-6554.4 states the Parent Assurance Letter (PAL) is the official form used to document withdrawal, transfer, and other student movement and that the form must be signed and submitted by the parent/guardian for student withdrawals.   Condition We sampled a total of sixty (60) out of 78,036 students with leave codes in the school year 2021-22 My Integrated Student Information System (MiSiS) data file to verify that the leave code and reason code reported in MiSiS was properly supported. In our review of the documentation in comparison to the leave and reason code, we noted the following: 1. Six (6) schools provided documentation for seven (7) students that did not support the leave code entered into MiSiS: 2. One (1) school was unable to provide any documentation to support the leave code for one (1) student file. Our sample was a statistically valid sample. Cause and Effect The discrepancy in the leave code was caused by the schools using the wrong leave code when they did not have enough information to substantiate that code. There seems to be a deficiency in the internal control system to properly train and monitor the personnel who are assigned to maintain the accuracy of student records and documentation. Inaccurate leave codes in MiSiS may lead to inaccurate data collected by CDE, which could lead to errors in the calculation of the graduation rate. Questioned Costs Not applicable. This finding is considered a programmatic non-compliance issue. Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-002. Recommendation Given the recurring nature of this finding, we strongly recommend that the District take more robust measures to strengthen and improve its existing controls over enrollment/withdrawal status to ensure that student records on MiSiS are accurate and that necessary documents are maintained. Additionally, we recommend that the District continue to provide training on accurate enrollment/withdrawal codes and on the appropriate levels of written documentation required for various withdrawal situations under both ESSA and CDE guidance.

Criteria 20 U.S. Code § 7845 (a) (1), “A local educational agency receiving funds under more than one covered program may submit plans or applications to the State educational agency under those programs on a consolidated basis.” This Consolidated Application (ConApp) is used by the California Department of Education (CDE) to distribute categorical funds from various federal programs (e.g., Title I, Part A; Title II) to county offices, school districts, and direct funded charter schools throughout California. Improving Teacher Quality State Grants (Title II, Part A) funds are allocated based on the following formula: (a) 20 percent based on the relative number of individuals age five through seventeen, and (b) 80 percent based on the relative numbers of individuals age five through seventeen from families with incomes below the poverty line, residing in the area the local educational agency (LEA) serves based on U.S. Census or state alternative poverty data. Condition We sampled a total of three (3) out of five (5) ConApp reports submitted in the fiscal year 2022-23. Our review identified discrepancies in the reported amount for Title II, Part A FY 2021-22 Expenditure Report, 12 Months as follows: Our sample was a statistically valid sample. Cause and Effect The discrepancies in the ConApp reporting can be attributed to a lack of adequate control measures within the reporting process, which has led to non-compliance with ConApp reporting requirement. Questioned Costs Not applicable - Title II, Part A funds are allocated based on a specific population and poverty-based formula, not based on expenditures. Recommendation We recommend that the District strengthen and improve its existing controls over the ConApp reporting process to ensure that all reported information is reconciled between the accounting records and the ConApp submissions.

Program Identification Finding Reference Number: F-2022-001 Federal Program Title, Awarding Agency, Pass-Through Entity, Assistance Listing Number, and Award Number: Supporting Effective Instruction State Grant (Title II, Part A of the ESEA), U.S. Department of Education, Passed through the California Department of Education, AL No. 84.367, PCA No. 14341 (Material Weakness) Elementary and Secondary School Emergency Relief Fund, U.S. Department of Education, Passed through the California Department of Education, AL No. 84.425D, PCA No. 15547 (Material Weakness) Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles State Audit Guide Finding Code: 30000 and 50000 Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.? In accordance with LAUSD Policy Bulletin 2643.11 entitled, ?Documentation for Employees Paid from Federal and State Categorical Programs,? the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from Federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.11. Supporting Effective Instruction State Grants (Title II, Part A of the ESEA): In our sample of sixty (60) payroll expenditures, we noted that five (5) employees provided the signed Multi-Funded Time Reports; however, the hours reported on the Multi-Funded Time Reports did not support the hours recorded in SAP. For four (4) of the five (5) employees, the hours reported on the Multi-Funded Time Reports were less than the hours recorded in SAP, leading to an overstatement of program expenditures. For one (1) of the five (5) employees, the hours reported on the Muti-Funded Report were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we noted that one (1) employee provided a signed Periodic Certification that was signed subsequent to our request. Total exceptions for overstatement and understatement amounted to $4,906 and $683, respectively, of the $208,524 sampled from $14,281,515 of the total payroll expenditures. Total exceptions for untimely certifications amounted to $274. Elementary and Secondary School Emergency Relief Fund: In our sample of sixty (60) payroll expenditures, we noted that three (3) employees provided the timesheets; however, the hours reported on the timesheets did not support the hours recorded in SAP. For one (1) of the three (3) employees, the hours reported on the timesheet were less than the hours recorded in SAP, leading to an overstatement of program expenditures. For two (2) of the three (3) employees, the hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we noted that one (1) employee provided a signed Periodic Certification that was signed subsequent to our request. Total exceptions for overstatement and understatement amounted to $820 and $350, respectively, of the $223,777 sampled from $487,522,973 of the total payroll expenditures. Total exceptions for untimely certifications amounted to $1,482. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District?s policies and procedures. The discrepancies between the time reports/timesheets and the SAP data appear to be due to clerical errors and lack of sufficient review. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Supporting Effective Instruction State Grants (Title II, Part A of the ESEA) (Assistance Listing No. 84.367): $4,906 overstatement and $683 understatement due to unsupported hours charged. Elementary and Secondary School Emergency Relief Fund (Assistance Listing No. 84.425D): $820 overstatement and $350 understatement due to unsupported hours charged. There were no questioned costs due to untimely completed/signed Periodic Certifications because payroll costs incurred were allowable costs for the programs. Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2021-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and the related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the required procedures to ensure the ongoing compliance requirements are being monitored. We also recommend that management responsible for each grant design and implement controls to review and approve the Multi-Funded Time Reports or timesheets prior to submission to the funding agency, and the review and approval are documented. View of Responsible Officials and Corrective Action Plan 1) Accounting Controls team will continue to coordinate with Central Office/program coordinators to: a) communicate the impact of questioned cost resulting from current year?s audit findings b) follow through on the sample testing performed on payroll documentations as a secondary control twice a year; and c) provide feedback and training to the schools based on the result of sample testing 2) Accounting Controls team will coordinate with the MyPLN team regarding the implementation of the annual Mandatory Time & Effort Training. This is a required 30-minute training of administrators, timekeepers, and supervisors with review questions at the end of the course, and requires a 100% correct answers before a certificate of completion will be issued. Name: Timothy Rosnick Title: Deputy Controller Telephone: (213) 241 -7989

Program Identification Finding Reference Number: F-2022-002 Assistance Listing Number: 84.010 Federal Program Title: Title I Grants to Local Educational Agencies (Title I, Part A of the ESEA) (Material Weakness) Awarding Agency / Pass-Through Entity: U.S. Department of Education / California Department of Education Award Number: PCA Nos. 14329, 14357, and 15438 Compliance Requirement: Special Tests and Provisions ? Annual Report Card, High School Graduation Rate State Audit Guide Finding Code: 30000 and 50000 Criteria Annual Report Card, High School Graduation Rate An SEA and its LEAs must report graduation rate data for all public high schools at the school, LEA, and State levels using the 4-year adjusted cohort rate under 34 CFR section 200.19(b)(1)(i)-(iv). Additionally, SEAs and LEAs must include the 4-year adjusted cohort graduation rate (which may be combined with an extended-year adjusted cohort graduation rate or rates) in adequate yearly progress (AYP) determinations. Graduation rate data must be reported both in the aggregate and disaggregated by each subgroup described in 34 CFR section 200.13(b)(7)(ii) using a 4-year adjusted cohort graduation rate. Only students who earn a regular high school diploma may be counted as a graduate for purposes of calculating the 4-year adjusted cohort graduation rate. To remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a General Educational Development (GED) program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort (Title I, Sections 1111(b)(2) and (h) of ESEA (20 USC 6311(b)(2) and (h)); 34 CFR section 200.19(b)). Section 8.3 of the LAUSD Attendance Manual states School staff shall document students who withdraw from the school. School staff shall follow Appendix J-2: Elementary School Withdrawal Symbols and Appendix J-3: Secondary School Withdrawal Symbols when recording withdrawal data. Section XI.B of LAUSD REF-6554.4 states the Parent Assurance Letter (PAL) is the official form used to document withdrawal, transfer, and other student movement and that the form must be signed and submitted by the parent/guardian for student withdrawals. Condition We sampled a total of sixty (60) out of 66,263 students with leave codes in the school year 2020-21 My Integrated Student Information System (MiSiS) data file to verify that the leave code and reason code reported in MiSiS was properly supported. In our review of the documentation in comparison to the leave and reason code, we noted the following: 1. Three (3) schools provided documentation for five (5) students that did not support the leave code entered into MiSiS: "See Schedule of Findings and Questionsed Costs for chart/table" 2. One (1) school was unable to provide any documentation to support the leave code for one (1) student file. Our sample was a statistically valid sample. Cause and Effect The discrepancy in the leave code was caused by the schools using the wrong leave code when they did not have enough information to substantiate that code. There seems to be a deficiency in the internal control system to properly train and monitor the personnel who are assigned to maintain the accuracy of student records. Inaccurate leave codes in MiSiS may lead to inaccurate data collected by CDE, which could lead to errors in the calculation of the graduation rate. Questioned Costs Not applicable. This finding is considered a programmatic non-compliance issue. Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Finding as finding number F-2021-005. Recommendation We recommend that the District continue to strengthen its controls over enrollment/withdrawal status by providing adequate training/monitoring to ensure that student records on MiSiS are accurate and updated when new information is available and that necessary documents are maintained. We recommend that the training include the appropriate levels of written documentation required for different situations under both ESSA guidance and CDE guidance. View of Responsible Officials and Corrective Action Plan Pupil Services and Attendance will continue to provide policy guidance: 1. Provide ongoing reminders every other month through the Schoology communication platform regarding accurate enrollment, withdrawal codes and the MYPLN Essential Tips training to support with the withdrawal process, codes, and documentation. 2. Pupil Services and Attendance will continue to post resource tools such as the Certify Rules (this automated data validation tool allows users to efficiently identify data errors or omissions to improve the quality of student data in MiSiS) to support accurate enrollment and withdrawal procedures. 3. Pupil Services and Attendance will communicate with Local District Administration on disseminating information to school-site designees with audit findings to participate in the MYPLN training on accurate enrollment and withdrawal codes during school year 2023-24. 4. Pupil Services and Attendance will communicate with Office of Organizational Excellence to support in messaging the availability of the MYPLN training to support with the withdrawal process, codes, and documentation. 5. Will obtain written acknowledgement for completion of the MYPLN Essential Tips training to support with the withdrawal process, codes, and documentation from the schools identified with audit findings. Name: Elsy Rosado Title: Director, Pupil Services and Attendance Telephone: (213) 241-3844

Program Identification Finding Reference Number: F-2022-003 Federal Program Title, Awarding Agency, Pass-Through Entity, Assistance Listing Number, and Award Number: Child Nutrition Cluster, U.S. Department of Agriculture, Passed through the California Department of Education, AL Nos. 10.553, 10.555, and 10.559, PCA Nos. 13523, 13524, 13525, 13526, 15637, 13004, and 13006. (Significant Deficiency) Child and Adult Care Food Program, U.S. Department of Agriculture, Passed through the California Department of Education, AL No. 10.558, PCA Nos. 13529, 13534, and 15577. (Significant Deficiency) Compliance Requirement: Special Tests and Provisions State Audit Guide Finding Code: 30000 and 50000 Criteria Per 7 CFR 225.15 (c)(1), ?Sponsors shall maintain accurate records justifying all meals claimed and documenting that all program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. The sponsor's records shall be available at all times for inspection and audit by representatives of the Secretary, the Comptroller General of the United States, and the State agency for a period of three years following the date of submission of the final claim for reimbursement for the fiscal year.? Per 7 CFR 226.10 (c), ?Claims for Reimbursement shall report information in accordance with the financial management system established by the State agency, and in sufficient detail to justify the reimbursement claimed? In submitting a Claim for Reimbursement, each institution shall certify that the claim is correct and that records are available to support that claim.? Condition Child Nutrition Cluster (CNC) (AL Nos. 10.553, 10.555, and 10.559) During the procedures performed over meals claimed under the Child Nutrition Cluster programs during the fiscal year 2022, we noted that the monthly meal counts recorded in the District?s Cafeteria Management System (CMS) were not fully supported by underlying documentation (e.g., meal count sheets). We sampled 20 out of 711 schools in August 2021, 20 out of 697 schools in November 2021, and 20 out of 696 schools in February 2022. We then validated that the meal counts recorded in the CMS for Breakfast and Lunch were supported by either meal count sheets used at the school sites or by the point-of-sale (POS) system data. Based on our procedures, we noted the following: 1. Of the 20 schools sampled in August 2021, we noted variances in four (4) schools between the CMS count and the meal count sheets for Breakfast. Breakfast meal counts were under-claimed by 46, based on a total sample of 23,497 meals tested, from a total reported population of 1,961,194 meals. 2. Of the 20 schools sampled in November 2021, we noted variances in four (4) schools between the CMS count and the meal count sheets for Breakfast. Breakfast counts were over/(under) claimed by 29 and (1), respectively, based on a total sample of 25,432 meals tested, from a total reported population of 2,508,853 meals. 3. Of the 20 schools sampled in February 2022, we noted variances in four (4) schools between the CMS count and the meal count sheets for Breakfast. Breakfast counts were over/(under) claimed by 9 and (44), respectively, based on a total sample of 19,882 meals tested from a total reported population of 2,575,622 meals. Child And Adult Care Food Program (CACFP) (AL No. 10.558) During the procedures performed over meals claimed under the Child and Adult Care Food Program during the fiscal year 2022, we noted that the monthly meal counts recorded in the District?s Cafeteria Management System (CMS) were not fully supported by underlying documentation (e.g., meal count sheet). We sampled 8 out of 680 schools in September 2021, 9 out of 680 schools in November 2021, and 8 out of 684 schools in February 2022. We then validated that the meal counts recorded in the CMS for Snack and Supper were supported by either meal count sheets used at the school sites or by POS system data. Based on our procedures, we noted the following: 1. Of the 8 schools sampled in September 2021, we noted a variance in one (1) school between the CMS count and the meal count sheets for Supper. Supper meal counts were under-claimed by 10, based on a sample of 12,269 meals tested, from a total reported population of 4,513,335 meals. 2. Of the 8 schools sampled in February 2022, we noted variances in four (4) schools between the CMS count and the meal count sheets for both Snack and Supper. Snack counts were over-claimed by 20, based on a total sample of 4,609 meals tested from a total reported population of 1,183,533 meals. Supper counts were over/(under) claimed by 27 and (21), respectively, based on a total sample of 14,854 meals tested from a total reported population of 3,686,216 meals. Our samples were statistically valid samples. Cause and Effect The condition appears to be caused by human error while manually counting the paper meal count sheets. Inaccurate claims of meal counts could lead to questioned costs. Questioned Costs Federal regulation 2 CFR 200.516 (a)(3) requires the auditor to report questioned costs when likely questioned costs exceed $25,000. Child Nutrition Cluster (CNC) (AL Nos. 10.553, 10.555, and 10.559) Overclaimed - $95; Underclaimed ? $(230) Child And Adult Care Food Program (CACFP) (AL No. 10.558) Overclaimed - $126; Underclaimed ? $(122) The following are the total over/(under) claimed per meal type and per program: "See schedule of Findings and Questioned Costs for chart/table" Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Finding as finding number F-2021-007. Recommendation We recommend that the District continue to strengthen its controls over the meal claim process to ensure that meals are accurately counted, inputted into CMS and claimed for reimbursement. Views of Responsible Officials, Planned Corrective Actions, and Contact Information For the 2021-22 school year, the Food Services Division used federal waivers to support students and families by providing meals under multiple programs. Starting August 2021, COVID concerns resulted in the district discontinuing breakfast in the classroom. USDA waivers permitted the distribution of breakfast and supper meals to students as they left campus for consumption at home. As the school year progressed, the after-school supper program was reinstated for a small group of students at some schools, and this group of students was given a breakfast to take home. Additionally, we distributed weekend meals comprising of supper and snacks. Lastly, the district requested Food Services to serve a morning snack (at the District?s expense) for hungry students. The snacks were tracked manually for reimbursement from ESSER funds by the district. Each meal service required a different form to count meals and multiple sheets for the same meal period depending on how the meal bags were distributed (exit gate vs. classroom). The managers had many forms that had to be put together and summed up to come up with the reimbursable counts. Manually compiling and uploading the information is the reason for the variances. Each time there was a change in the operation, the Food Service team had to create a new training module for the change in operation, which created additional forms leading to the errors seen in the audit review. We want to state respectfully that our error rate for meal counts was 0.4% which, given the multiple food distribution channels to support students, is understandable. To address the audit findings, Food Services will review and modify our procedures and be stringent in monitoring our existing systems and procedures: 1. Food Services Division will add steps to our current meal claiming procedures to ensure accuracy of claims. a. Food Service Manager will utilize the Meal Count Consolidation Form for meal periods that have more than one meal count sheet. b. Food Service Manager will input meal counts into CMS based on information from the Consolidation Form. c. Food Service Manager will run a weekly Meal Counts Report generated from CMS. d. Food Service Manager will compare daily meal count documents to the five-day Meal Count Report for accuracy. e. Area Food Services Supervisors (AFSS) will randomly check meal counts entered in CMS and compare them with the numbers entered in daily meal count sheets. Each school will have a random review every 2-3 months, and where errors are found there will be additional follow up. 2. Food Services will follow the review steps as indicated in Corrective Action Response #1 and confirm the claim for accuracy prior to submission to CNIPS. a. Food Services Central Office Staff will provide a daily meal count report to all Supervisors for review to identify any inputting errors. b. Food Service Managers will review and adjust meal counts prior to the CNIPS claim submission, based on AFSS feedback. The target date for the implementation of the above corrective action plan is by the end of February 2023. Name: Manish Singh Title: Director, Food Services Division Telephone: (213) 241-2993

Program Identification Finding Reference Number: F-2022-004 Assistance Listing Number: 32.009 Federal Program Title: Emergency Connectivity Fund Program (Significant Deficiency) Awarding Agency / Pass-Through Entity: Federal Communications Commission Award Number: Not Available Compliance Requirement: Equipment/Real Property Management; Special Tests and Provisions State Audit Guide Finding Code: 30000 and 50000 Criteria 47 CFR 54.1706 (c) states Emergency Connectivity Fund support for eligible equipment and services is limited to no more than one fixed broadband internet access connection per location, and one connected device and one Wi-Fi hotspot device per student, school staff member, or library patron. 2 CFR 200.303 (a) states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our audit, we noted that the District did not have sufficient controls in place within its Emergency Connectivity Fund (ECF) program to ensure that proper records were maintained for equipment acquired under the ECF program. The District utilized fundings from both ECF and another Federal grant, Elementary and Secondary School Emergency Relief II (ESSER II), for connectivity to meet the remote learning needs of students, school staff, and library patrons during the COVID-19 emergency period. We noted that eligible devices, such as connectivity devices and Wi-Fi hotspot devices, had originally been purchased using ESSER II grant. Subsequently, a portion of the costs were allocated/transferred to the ECF program. We obtained a list of equipment purchased with ECF funds for our review and noted that they were not in compliance with the ?per-user? limitation. The original listing of equipment indicated that twenty-six (26) individuals were distributed with more than one (1) device. After further inquiry, the District provided an updated equipment list which indicated that ten (10) individuals were distributed with more than one (1) device. Cause and Effect The condition was due to a lack of sufficient internal controls over maintaining accurate property/equipment records and internal controls over compliance with the ?per-user? limitation requirement. The District did not properly identify equipment funded with Federal awards to ensure maintenance of accurate property/equipment inventories. Also, the District did not maintain a proper tracking system to ensure compliance with the ?per-user? limitation requirement. Questioned Costs Not applicable. This finding is considered a programmatic non-compliance issue as well as a deficiency in the internal control system over equipment inventory management as the District has yet to submit the request for reimbursement. Recommendation We recommend that the District strengthen its policies and procedures related to maintaining accurate property/equipment records in order to comply with the program requirements. We also recommend that the District perform a thorough review of the year-end equipment list to ensure it is complete and accurate. We also recommend that the District review the listing of devices distributed to students/school staff to ensure that there are no other instances of non-compliance with the per-user limitation requirement, and that non-compliance devices be removed from the request for reimbursement to be submitted to the Federal Communications Commission. View of Responsible Officials and Corrective Action Plan The District acknowledges the need to strengthen the staff?s compliance to policies and procedures related to equipment tracking and property records. ECF is a new program and there was an urgent need for the District to provide the necessary equipment for connectivity to meet the remote learning needs of students/school staff during the COVID-19 emergency period. Beginning January 3, 2023, the District will provide additional training to staff as needed and will reiterate the policies and procedures to ensure compliance with program requirements. The District will conduct a thorough review of devices distributed to students/school staff prior to requesting any reimbursement from the program administrator to ensure compliance with the per-user limitation requirement. Name: Aaron Wai Title: Admin Services Manager, Information Technology Division E-mail: aaron.wai@lausd.net

Program Identification Finding Reference Number: F-2022-005 Assistance Listing Number: 84.002A Federal Program Titles: Adult Education ? Basic Grants to States (Material Weakness) Awarding Agency / Pass-Through Entity: U.S. Department of Education / California Department of Education Award Number: PCA Nos. 13978, 14109, and 14508 Compliance Requirement: Eligibility State Audit Guide Finding Code: 30000 and 50000 Criteria According to 29 U.S. Code Section 3272 (4) Eligible Individual, the term ?eligible individual? means an individual ? (A) who is at least 16 years of age; (B) who is not enrolled or required to be enrolled in secondary school under State law; and (C) who ? (iii) is basic skills deficient; (ii) does not have a secondary school diploma or its recognized equivalent and has not achieved an equivalent level of education; or (iii) is an English language learner. Condition We sampled a total of sixty (60) out of 24,009 students with at least one A Comprehensive System for Adult Education?s (CASAS) test score to verify eligibility for the Adult Education Basic Grants to States Program (Adult Education Program) and identified two (2) students who were sixteen years old at the time of enrollment, but not enrolled in secondary school. Based on the compulsory education law in the State of California, students under the age of 18 are required to be enrolled in secondary school. As such, sixteen-year-old students are not eligible to participate in the Adult Education Program. Additionally, we noted that the two (2) aforementioned sixteen-year-old students were enrolled in a subprogram specifically designed for high school dropouts between the ages of 16 and 24. As such, we had reasonable doubt that there could potentially be more students in the population who were under the age of 18. After further investigation, we found 631 students enrolled in the Adult Education Program who were under the age of 18 at the time of enrollment. Cause and Effect The District?s policies and procedures regarding the Adult Education Program were not consistent with the age requirements under the State?s compulsory education law. Ineligible participants could result in non-compliance with the program requirements, as well as adjustments to future funding amounts, which are determined based on payment points generated from the District?s past performance. Questioned Costs Undetermined. The questioned costs for the above-mentioned ineligible participants could not be assessed as the exact expenditure amount related to specific students could not be determined. This grant is a cost reimbursement grant, in which future funding is determined based on payment points generated from the current students? performance. Recommendation We recommend that the District develop policies and procedures over eligibility determination and intake process/assessment to ensure that students under the age of 18 are not enrolled in a program funded by the Adult Education Program. In addition, the District should find alternative funding source(s) for students under the age of 18 that are enrolled in the high school dropouts subprogram. Views of Responsible Officials, Planned Corrective Actions, and Contact Information Division of Adult and Career Education (DACE) will review the current process and implement the following: 1. Directive will be provided to DACE principals to stop enrolling 16?17-year-old students. 2. Instructions will be given to DACE Accelerated College and Career Transitions (ACCT) Advisors not to enroll students between ages 16-17 moving forward. 3. The District will utilize unrestricted funds for students under the age of 18 that are enrolled in the Workforce Innovation and Opportunity Act (WIOA) program. 4. DACE will continue to serve the existing 16?17-year-old ACCT student population through the end of the school year 2022-23 and use unrestricted funding sources other than WIOA. 5. During school year 2022-23 and henceforth, DACE will not report or claim any student outcomes other than those earned by students who are of 18 years of age and older. 6. DACE will amend the ACCT intake and enrollment policies and procedures in the DACE Counseling Handbook. Name: Megan Carroll Title: Program and Policy Development Coordinator Contact Information: mmc78271@lausd.net or (213) 241-3781 Name: Alejandra Salcedo Title: Federal Grants Specialist Contact Information: axs60041@lausd.net or (213) 241-3812

Program Identification Finding Reference Number: F-2021-001 Federal Program Title, Awarding Agency, Pass-Through Entity, Assistance Listing Number, and Award Number: Child Nutrition Cluster, U.S. Department of Agriculture, Passed through the California Department of Education, Assistance Listing Nos. 10.555 and 10.559, PCA Nos. 13523, 13524, 13004, and 13006. (Significant Deficiency) Coronavirus Relief Fund, U.S. Department of Treasury, Passed through the California Department of Education, Assistance Listing No. 21.019, PCA No. 25516 (Material Weakness) Adult Education ? Basic Grants to States, U.S. Department of Education, Passed through the California Department of Education, Assistance Listing No. 84.002, PCA 14508, 14109, and 13978; (Material Weakness) Title I Grants to Local Educational Agencies (Title I, Part A of the ESEA), U.S. Department of Education, Passed through the California Department of Education, Assistance Listing No. 84.010, PCA 14329, 14357, 14329, and 15438; (Material Weakness) Career and Technical Education ? Basic Grants to States (Perkins V), U.S. Department of Education, Passed through the California Department of Education, Assistance Listing No. 84.048, PCA 14894 and 14893; (Material Weakness) Supporting Effective Instruction State Grants (Title II, Part A of the ESEA), U.S. Department of Education, Passed through the California Department of Education, Assistance Listing No. 84.367, PCA 14341; (Material Weakness) Elementary and Secondary School Emergency Relief Fund, U.S. Department of Education, Passed through the California Department of Education, Assistance Listing No. 84.425D, PCA No. 15536, 15547, and 15535 (Material Weakness)Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles State Audit Guide Finding Code: 30000 and 50000 Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.? In accordance with LAUSD Policy Bulletin 2643.10 entitled, ?Documentation for Employees Paid from Federal and State Categorical Programs,? the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from Federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month.Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.10. Child Nutrition Cluster: In our sample of sixty (60) payroll expenditures, we noted that one (1) employee provided a signed Periodic Certification; however, the certification was signed subsequent to our request. Total exception amounted to $931 of the $73,200 sampled from $101,201,558 of the total payroll expenditures. Coronavirus Relief Fund: In our sample of 165 payroll expenditures, we noted that five (5) employees provided timesheets, but the hours reported on the timesheets did not support the hours recorded in SAP, the District?s accounting system. Total exceptions amounted to $1,193 of the $213,809 sampled from $89,903,154 of the total payroll expenditures. Adult Education ? Basic Grants to States: In our sample of sixty (60) payroll expenditures, we noted that one (1) employee provided a signed Periodic Certification and two (2) employees provided signed Multi- Funded Time Reports; however, the certification and the Multi-Funded Time Reports were signed subsequent to our request. Total exceptions amounted to $4,876 of the $250,415 sampled from $10,745,231 of the total payroll expenditures. Title I Grants to Local Educational Agencies (Title I, Part A of the ESEA): In our sample of sixty (60) payroll expenditures, we noted that one (1) employee provided a signed periodic certification; however, the certification was signed subsequent to our request. In addition, we noted that there was no supporting documentation available for one (1) other employee?s Special Assignment hours. Total exceptions amounted to $7,320 (untimely certification) and $2,221 (unsupported hours charged) of the $193,720 sampled from $217,378,737 of the total payroll expenditures. Career and Technical Education ? Basic Grants to States (Perkins V): In our sample of sixty (60) payroll expenditures, we noted that one (1) employee provided a signed periodic certification; however, the certification was signed subsequent to our request. In addition, we noted that three (3) employees provided timesheets, but the hours on the timesheets did not support the hours recorded on SAP. Total exceptions amounted to $786 (untimely certification) and $461 (unsupported hours charged) of the $106,864 sampled from $1,495,993 of the total payroll expenditures. Supporting Effective Instruction State Grants (Title II, Part A of the ESEA): In our sample of sixty (60) payroll expenditures, we noted that three (3) employees provided signed Multi-Funded Time Reports; however, the hours reported on the Multi-Funded Time Reports did not support the hours recorded in SAP. For two (2) of the three (3) employees, the hours reported on the Multi-Funded Time Reports were less than the hours recorded in SAP, leading to an overstatement of program expenditures. For one (1) of the three (3) employees, the hours reported on the Muti-Funded Reports were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $899 and $368, respectively, of the $277,072 sampled from $15,231,916 of the total payroll expenditures. Elementary and Secondary School Emergency Relief Fund: In our sample of 120 payroll expenditures, we noted that two (2) employees provided a signed Periodic Certification; however, the certifications were signed subsequent to our request. In addition, one (1) employee provided a timesheet, but the hours reported on the timesheet did not support the hours recorded in SAP. The hours reported on the timesheet were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions amounted to $3,340 (untimely certifications) and $123 (unsupported hours charged) of the $173,284 sampled from $207,837,633 of the total payroll expenditures. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District?s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review. Coronavirus Relief Fund? This finding is a repeat finding and has been reported previously for June 30, 2020 (F-2020-001). Elementary and Secondary School Emergency Relief Fund ? This finding is a repeat finding and has been reported previously for June 30, 2020 (F-2020-001). Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Coronavirus Relief Fund (Assistance Listing No. 21.019): $1,193 due to unsupported hours charged. Title I Grants to Local Educational Agencies (Title I, Part A of the ESEA) (Assistance Listing No. 84.010): $2,221 due to unsupported hours charged. Career and Technical Education ? Basic Grants to States (Perkins V) (Assistance Listing No. 84.048): $461 due to unsupported hours charged. Supporting Effective Instruction State Grants (Title II, Part A of the ESEA) (Assistance Listing No. 84.367): $899 overstatement and $368 understatement due to unsupported hours charged. Elementary and Secondary School Emergency Relief Fund (Assistance Listing No. 84.425D): $123 understatement due to unsupported hours charged. There were no questioned costs due to untimely completed/signed Periodic Certifications or Multi-Funded Time Report because payroll costs incurred were allowable costs for the programs. Recommendation We recommend that the District continue to strengthen its internal controls over payroll expenditures and the related compliance requirements by providing ongoing training to appropriate personnel on the required procedures, and to include a review process for monitoring compliance with those procedures.

Program Identification Finding Reference Number: F-2021-002 Assistance Listing Number: 93.323 Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Material Weakness) Awarding Agency / Pass-Through Entity: U.S. Department of Health and Human Services, Los Angeles County Office of Education Award Number: C-21248-20:23 Compliance Requirement: Allowable Costs/Cost Principles State Audit Guide Finding Code: 30000 and 50000 Criteria 2 CFR section 200.403, Factors affecting allowability of costs: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part.? 2 CFR section 200.404 Reasonable costs: ?A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm's-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award. (c) Market prices for comparable goods or services for the geographic area. (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost.? 2 CFR section 200.53 Improper payment: (a) Improper payment means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. Condition During our review of the expenditures charged to the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (School Based COVID-19 Testing) Program, we identified the following issue related to contracted services: According to an executed agreement entered on April 30, 2021, between the District and a Contractor, the Contractor is permitted to invoice the District the actual cost of equipment and materials directly related to program services, plus a ?Material and Handling fee? (markup) of eleven percent (11%). However, it was noted that the Contractor applied the 11% markup to costs that were not related to equipment and materials for program services on the June 2021 invoice. The cost categories that were marked up by the Contractor included travel reimbursements, per diem, insurance, and subcontractor costs. The District has agreed that the markup on those cost categories were improper, and has subsequently adjusted the 11% markup on travel, per diem, and insurance in the FY2022 general ledger, except for the subcontractor?s markup. Cause and Effect The improper markup of costs was due to a lack of proper review procedures implemented over the Contractor?s executed agreement and invoices as both the executed agreement and the program were new to the District. The effect of these errors/ improper markup resulted in inaccurate claims/costs submitted for reimbursement to the grantor. Questioned Costs Federal amounts over reported to the grantor for reimbursement and removed from SEFA is $305,635. Of the total amount, $293,119 represents the additional 11% ?Material and Handling fee? charged for travel reimbursements, per diem, insurance, and subcontractor costs. The remaining amount of $12,516 represents the indirect cost/administrative cost that was charged by the District to the grantor related to the $293,119 markup. We noted that the District has reduced the Fiscal Year 2022 program general ledger and reimbursement request to the grantor by this amount except for the subcontractor cost of $2,975 and the related indirect cost of $127 charged by the District. Recommendation We recommend that the District strengthen its review process over invoices to ensure that all costs charged by Contractors and vendors are in accordance with the terms stipulated in the executed agreements/contracts. View

Program Identification Finding Reference Number: F-2021-003 Assistance Listing Number: 97.039 Federal Program Titles: Hazard Mitigation Grant Program (HMGP) (Significant Deficiency) Awarding Agency / Pass-Through Entity: U.S. Department of Homeland Security, California Governor?s Office of Emergency Services Award Number: Project Nos. PJ0004 and PJ0066 Compliance Requirement: Period of Performance State Audit Guide Finding Code: 30000 and 50000 Criteria 2 CFR section 200.403, Factors affecting allowability of costs: ?(h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to ?200.308(e)(3).? Condition As part of our review over the reimbursable expenditures under the Hazard Mitigation Grant Program, we selected sixty (60) expenditure samples over four (4) projects and reviewed the underlying supporting documents to determine if the expenditures were allowable per program regulations, accurately charged to the program, and properly supported. Based on our review, we noted the following: ? One (1) expenditure item included in the total reimbursable amounts for Eagle Rock High School Boys Gym, Project No. PJ0004, was related to activities between July 1, 2016 and July 31, 2016. However, the period of performance for this project began on July 29, 2016. ? One (1) expenditure item included in the total reimbursable amounts for King Middle School Auditorium, Project No. PJ0066, was related to activities between August 10, 2016 and January 27, 2017. However, the period of performance for this project began on December 23, 2016. Cause and Effect The condition was caused by the District using the ?transaction date? field from SAP, the District?s accounting system, to identify program expenditures for reimbursements instead of determining the actual period in which the expenditures were incurred. The effect is that cutoff issues may occur and program expenditures outside of the period of performance may be included as reportable and reimbursable expenditures. Questioned Costs We determined that, for Eagle Rock High School Boys Gym, Project No. PJ0004, there were no questioned costs as the total expenditure amounts tested for this project exceeded the total Federal share reimbursed to the District. For King Middle School Auditorium, Project No. PJ0066, we were unable to determine whether the District had incurred allowable expenditures in excess of the total Federal share without reviewing additional expenditures charged to the project. The prorated amount of the expenditures that were incurred outside of the period of performance was $35,270. Recommendation We recommend that the District strengthen its controls over period of performance by implementing procedures to accurately identify program expenditures based on the actual period in which the expenditures were incurred. We also recommend that the District review all expenditures charged to King Middle School Auditorium, Project No. PJ0066 to determine whether the expenditures were incurred within the period of performance in excess of the total Federal share reimbursed.

Program Identification Finding Reference Number: F-2021-004 Assistance Listing Number: 84.287 Federal Program Titles: Twenty-First Century Community Learning Centers (Significant Deficiency) Awarding Agency / Pass-Through Entity: U.S. Department of Education, California Department of Education Award Number: PCA Nos. 14349, 14765, 14603 and 14535 Compliance Requirement: Subrecipient Monitoring State Audit Guide Finding Code: 30000 and 50000 Criteria Under 2 CFR section 200.332, Requirements for Pass-through Entities, all pass-through entities must: ?(b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in section 200.501.? Condition Risk Assessment During procedures performed over the subrecipient monitoring compliance requirements, we noted that the District did not conduct an assessment/evaluation over the risk of noncompliance of all subrecipients in fiscal year 2021. The District would normally assess the risk of noncompliance for each subrecipient in a process called ?Agency Review Meeting.? In lieu of the annual ?Agency Review Meeting,? the District conducted a ?Mid-Year Review? in fiscal year 2021 which consisted of one-on-one meetings with the subrecipients. The District provided the ?Mid-Year Review? meeting agenda and calendar for review. However, upon our review of the information provided, we were unable to determine whether the District had conducted a risk analysis/assessment, as the meeting agenda did not include risk assessments as a meeting item, nor were meeting minutes or other supporting documents (e.g., completed risk assessment checklists, etc.) from the ?Mid-Year Review? maintained or provided. In response, the District prepared a subrecipient monitoring checklist template/worksheet which would serve as a tool to assess/evaluate the risk of noncompliance for all subrecipients going forward. As a result, we were unable to determine if an assessment/evaluation of each subrecipient?s risk of noncompliance was performed. Single Audit Verification During procedures performed over the requirements described in 2 CFR 200.332 (f), we noted that one subrecipient received more than $750,000 in Federal funds from the District during the fiscal year 2020, but the District did not obtain a Single Audit report for the same fiscal year-end, which was due during fiscal year 2021. Specifically, it was noted that the District maintained a tracking log of audited financial statements and/or Single Audit report submissions to document types of reports received from each subrecipient. This tracking log was cross-referenced to an invoicing spreadsheet, which tracked the amounts that were passed through to each subrecipient. In our review of the tracking log and the invoicing spreadsheet, we identified one (1) subrecipient that received more than $750,000 in Federal funds from the District during fiscal year 2020, but was not identified by the District as requiring a Single Audit. Per further inquiry, we noted that the subrecipient did not have a Single Audit conducted. Cause and Effect Risk Assessment The condition appears to be caused by an oversight by the District. The lack of a risk assessment could impact the level of subrecipient monitoring performed by the District. Single Audit Verification The condition appears to be caused by a lack of detailed knowledge regarding the subrecipient monitoring requirements by District personnel responsible for the verification of Single Audits of the subrecipients, stemming from employee turnover within the department. Questioned Costs Not applicable. This finding is considered a programmatic non-compliance issue as well as a deficiency in the internal control system to properly monitor subrecipients. Recommendation We recommend the District perform and document a risk of assessment/evaluation of noncompliance on all subrecipients by conducting the ?Agency Review Meetings? at least annually. We also recommend that the District complete the Subrecipient Monitoring Checklist for all subrecipients to assess/evaluate the risk of noncompliance at least annually. We also recommend the District continue to strengthen its controls over subrecipient monitoring by providing adequate training/monitoring to District personnel to ensure that all subrecipients, who receive Federal awards from the District and other entities in excess of $750,000 have a Single Audit conducted. If the subrecipient represents to the District that their total expenditures did not exceed the applicable threshold in Federal funding during the fiscal year, an exemption letter, signed by the subrecipient?s CFO, should be obtained in lieu of a Single Audit report to officially notify the District that the subrecipient is exempt from the Single Audit requirements.

Program Identification Finding Reference Number: F-2021-005 Assistance Listing Number: 84.010 Federal Program Titles: Title I Grants to Local Educational Agencies (Title I, Part A of the ESEA) (Material Weakness) Awarding Agency / Pass-Through Entity: U.S. Department of Education, California Department of Education Award Number: PCA No. 14329 Compliance Requirement: Special Tests and Provisions ? Annual Report Card, High School Graduation Rate State Audit Guide Finding Code: 30000 and 50000 Criteria Annual Report Card, High School Graduation Rate An SEA and its LEAs must report graduation rate data for all public high schools at the school, LEA, and State levels using the 4-year adjusted cohort rate under 34 CFR section 200.19(b)(1)(i)-(iv). Additionally, SEAs and LEAs must include the 4-year adjusted cohort graduation rate (which may be combined with an extended-year adjusted cohort graduation rate or rates) in adequate yearly progress (AYP) determinations. Graduation rate data must be reported both in the aggregate and disaggregated by each subgroup described in 34 CFR section 200.13(b)(7)(ii) using a 4-year adjusted cohort graduation rate. Only students who earn a regular high school diploma may be counted as a graduate for purposes of calculating the 4-year adjusted cohort graduation rate. To remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a General Educational Development (GED) program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort (Title I, Sections 1111(b)(2) and (h) of ESEA (20 USC 6311(b)(2) and (h)); 34 CFR section 200.19(b)). Section 8.3 of the LAUSD Attendance Manual states School staff shall document students who withdraw from the school. School staff shall follow Appendix J-2: Elementary School Withdrawal Symbols and Appendix J-3: Secondary School Withdrawal Symbols when recording withdrawal data. Section XI.B of LAUSD REF-6554.4 states the Parent Assurance Letter (PAL) is the official form used to document withdrawal, transfer, and other student movement and that the form must be signed and submitted by the parent/guardian for student withdrawals. Condition We sampled a total of sixty (60) out of 62,082 students with leave codes in the school year 2019-20 My Integrated Student Information System (MiSiS) data file to verify that the leave code and reason code reported in MiSiS was properly supported. In our review of the documentation in comparison to the leave and reason code, we noted five (5) schools provided documentation for five (5) students that did not support the leave code entered into MiSiS: "See Schedule of Findings and Questioned Costs for table/chart." Our sample was a statistically valid sample. Cause and Effect The discrepancy in the leave code was caused by the school using the ?L3? code (Student transfers to a California public school outside LAUSD) when they did not have enough information to substantiate that code. Inaccurate leave codes in MiSiS may lead to inaccurate data collected by CDE, which could lead to errors in the calculation of the graduation rate. This finding is a repeat finding and has been reported previously for June 30, 2019 (F-2019-002) and June 30, 2020 (F-2020-003). Questioned Costs Not applicable. This finding is considered a programmatic non-compliance issue as well as a deficiency in the internal control system to properly train and monitor the personnel who are assigned to maintain the accuracy of student records. Recommendation We recommend the District continue to strengthen its controls over enrollment/withdrawal status by providing adequate training/monitoring to ensure that student records on MiSiS are accurate and updated when new information is available and that necessary documents are maintained. We recommend that the training include the appropriate levels of written documentation required for different situations under both ESSA guidance and CDE guidance.

Program Identification Finding Reference Number: F-2021-006 Assistance Listing Number: 84.010 Federal Program Titles: Title I Grants to Local Educational Agencies (Title I, Part A of the ESEA) (Material Weakness) Awarding Agency / Pass-Through Entity: U.S. Department of Education, California Department of Education Award Number: PCA No. 14329 Compliance Requirement: Special Tests and Provisions ? Assessment System Security ? (SEAs/LEAs) State Audit Guide Finding Code: 30000 and 50000 Criteria Under Section 1111(b)(2)(B)(iii) of the Elementary and Secondary Education Act of 1965 (ESEA), ?State Education Agencies (SEAs), in consultation with LEAs, are required to establish and maintain an assessment system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment system, SEAs must have policies and procedures to maintain test security and ensure that LEAs implement those policies and procedures.? Per Reference Guide REF-096500 ? 2020-21 Initial English Language Proficiency Assessments for California (ELPAC) Requirements for Principals, Coordinators, and Support Staff: Section II. Principal and Site ELPAC Coordinator Requirements: it indicates that principals must sign the 2020-21 ELPAC Test Security Agreement and Affidavit before a Site ELPAC Coordinator user role is created in TOMS (Test Operations Management System) to manage the ELPAC testing program at the school. Condition During the procedures performed over the District?s policies and procedures regarding assessment system security, we noted that six (6) schools administered the initial ELPAC assessment prior to the principals signing the 2020-21 ELPAC Security Agreement and Affidavit. Specifically, we sampled 45 out of 807 schools that administered the ELPAC to verify that the principals and coordinators followed the required procedures prior to administering the ELPAC assessment. Of the 45 sampled schools, we noted that six (6) schools created Site ELPAC Coordinator user roles and administered the initial ELPAC prior to the principals? signing of the 2020-21 ELPAC Security Agreement and Affidavit. Our sample was a statistically valid sample. Cause and Effect The condition was caused by an oversight on the requirement of a principal to sign the ELPAC Security Agreement and Affidavit before a Site ELPAC Coordinator?s user role is created in TOMS and ELPAC assessment is administered. Questioned Costs Not applicable. This finding is considered a programmatic non-compliance issue as well as a deficiency in the internal controls over monitoring the requirement for principals to sign the ELPAC Security Agreement and Affidavit. Recommendation We recommend that the District strengthen its monitoring process to ensure principals sign the ELPAC Security Agreement and Affidavit before a Site ELPAC Coordinator user role is created in TOMS and the ELPAC assessment is administered.

Program Identification Finding Reference Number: F-2021-007 Assistance Listing Number: 10.555 and 10.559 Federal Program Titles: Child Nutrition Cluster: National School Lunch Program and Summer Food Service Program for Children (Material Weakness) Awarding Agency / Pass-Through Entity: U.S. Department of Agriculture, California Department of Education Award Number: PCA Nos. 13523, 13524, 13004, and 13006 Compliance Requirement: Special Tests and Provisions State Audit Guide Finding Code: 30000 and 50000 Criteria Per 7 CFR 225.15 (c)(1), ?Sponsors shall maintain accurate records justifying all meals claimed and documenting that all program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. The sponsor's records shall be available at all times for inspection and audit by representatives of the Secretary, the Comptroller General of the United States, and the State agency for a period of three years following the date of submission of the final claim for reimbursement for the fiscal year.? Condition During the procedures performed over meals claimed under the Summer Food Service Program (SFSP) during the fiscal year 2021, it was noted that monthly meal counts recorded in the District?s Cafeteria Management System (CMS) were not fully supported by underlying documentation (e.g., meal count sheet). Specifically, we noted that the District operated 64 meal pickup sites while schools were closed until the schools reopened in April 2021. We sampled five (5) out of 64 schools in August 2020 and in January 2021 each, and sampled 25 schools out of 685 schools in April 2021. In total, 35 schools were sampled over three (3) months to verify that the monthly meal counts recorded in the CMS for Breakfast and Lunch were supported by meal count sheets used at the school sites. Based on our procedures, we noted the following: 1. Of the five (5) schools sampled in August 2020, we noted variances for four (4) schools between the CMS count and the meal count sheets for both Breakfast and Lunch. Breakfast and Lunch counts were both under claimed by 153 and 304, respectively. 2. Of the five (5) schools sampled in January 2021, we noted variances in four (4) schools between the CMS count and the meal count sheets for both Breakfast and Lunch. Breakfast counts were over / (under) claimed by 307 and (4), respectively. Lunch counts were over / (under) claimed by 307 and (4), respectively. 3. Of the 25 schools sampled in April 2021, we noted variances in twenty-one (21) schools between the CMS count and the meal count sheets for both Breakfast and Lunch. Breakfast counts were over / (under) claimed by 694 and (1,693), respectively. Lunch counts were over / (under) claimed by 1,318 and (1,496), respectively. Our sample was a statistically valid sample. Cause and Effect The condition appears to be caused by human error while manually counting the paper meal count sheets, as well as potential confusion caused by multiple types of count sheets being used. Inaccurate claims of meal counts could lead to questioned costs. Questioned Costs Overclaimed - $9,481; Underclaimed ? $(12,281) The following are the total over/(under) claimed per meal types: "See Schedule of Findings and Questioned Costs for chart/table" Recommendation We recommend the District continue to strengthen its controls over the meal claim process to ensure that meals are accurately counted, inputted into CMS and claimed for reimbursement.

Program Identification Finding Reference Number: F-2020-001 Federal Program Title, Awarding Agency, Pass-Through Entity, Catalog of Federal Domestic Assistance (CFDA) Number, and Award Number: COVID-19 - Coronavirus Relief Fund, U.S. Department of Treasury, Passed through the California Department of Education, CFDA No. 21.019, PCA No. 25516 (Material Weakness) COVID-19 - Elementary and Secondary School Emergency Relief Fund, Department of Education, Passed through the California Department of Education, CFDA No. 84.425D, PCA No. 15536 (Material Weakness) Compliance Requirement: Activities Allowed or Unallowed/Allowable Costs and Cost Principles State Audit Guide Finding Code: 30000 and 50000 Criteria Coronavirus Relief Fund: The Fund is designed to provide ready funding to address unforeseen financial needs and risks created by the COVID-19 public health emergency. Governments may use Fund payments for eligible expenses subject to the restrictions set forth in section 601(d) of the Social Security Act. Payments must be used to cover costs that are: 1. Necessary expenditures incurred due to the public health emergency with respect to COVID?19; 2. Not accounted for in the governments? most recently approved budget as of March 27, 2020; and 3. Incurred during the period that begins on March 1, 2020 and ends on December 30, 2020. Elementary and Secondary School Emergency Relief Fund: 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity; ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; ? Comply with the established accounting policies and practices of the non-Federal entity; ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition Coronavirus Relief Fund: The District used a portion of the Coronavirus Relief Fund (CRF) to pay daily stipends of $100 to District employees who worked at various sites during the pandemic. As part of our compliance and internal control review over payroll expenditures, we selected a sample of payroll expenditures for daily stipends of $100 charged to the program to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported. In our sample of 60 payroll stipend expenditures, after review of the sign-in sheets at the sites, we noted that one (1) employee worked only one day but was paid for five days. We also noted that one (1) employee was paid for one day, even though she did not work at a site. Total exceptions amounted to $600 of the $53,100 sampled from $23,062,035 of the total payroll stipend expenditures related. The District also used a portion of the CRF to fund an extended summer school during the summer of 2020 in response to the school closures. As part of our compliance and internal control review over payroll expenditures, we selected a sample of payroll expenditures charged to the program to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported. In our sample of 40 payroll expenditures, after review of timesheets, we noted variances between hours reported on the timesheets and the hours recorded on SAP, the District?s accounting system, for four (4) employees. For three (3) of the four (4) employees, the hours reported on the timesheets were greater than the hours recorded on SAP, leading to an understatement of payroll expenditures. For one (1) of the four (4) employees, the hours on the timesheets were less than the hours recorded on SAP, leading to an overstatement of payroll expenditures. Total exceptions for understatement and overstatement amounted to $538 and $144, respectively, of the $52,482 sampled from $3,804,007 of the total payroll expenditures related to the summer school programs. Our sample was a statistically valid sample. Elementary and Secondary School Emergency Relief Fund: The District used a portion of the Elementary and Secondary School Emergency Relief Fund (ESSER) to pay certain employees a differential pay of $5 per hour that the employee was authorized to physically report on site during the pandemic. As part of our compliance and internal control review over payroll expenditures, we selected a sample of payroll expenditures charged to the program to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported. In our sample of 60 payroll expenditures, we noted that three (3) employees provided timesheets, but the hours reported on the timesheets did not support the hours recorded on SAP. Total exceptions amounted to $100 of the $28,092 sampled from the $11,193,182 of the total payroll expenditures related to the additional $5 per hour payments. Our sample was a statistically valid sample. Cause and Effect The discrepancies between timesheets/sign-in sheets and SAP data seem to be due to clerical errors. The net effect is an overstatement of payroll expenditures. Questioned Costs Coronavirus Relief Fund: Total questioned cost: $206. $600 related to stipends. $144 overstated and $538 understated related to the summer school programs. Elementary and Secondary School Emergency Relief Fund: $100. Recommendation We recommend that the District strengthen internal controls over payroll expenditures related to the CRF and ESSER.

Program Identification Finding Reference Number: F-2020-002 Federal Catalog of Domestic Assistance Number(s): 84.002 Federal Program Titles: Adult Education ? Basic Grants to States (Material Weakness) Awarding Agency / Pass-Through Entity: U.S. Department of Education, California Department of Education Award Number: PCA Nos. 13978, 14508, and 14109 Compliance Requirement: Earmarking State Audit Guide Finding Code: 30000 and 50000 Criteria Code of Federal Regulations Title 34, Subtitle B, Chapter IV, Part 463, Subpart C, Section 463.25: Not more than five percent of a local grant to an eligible provider can be expended to administer a grant or contract under Title II. In cases where five percent is too restrictive to allow for administrative activities, the eligible agency may increase the amount that can be spent on local administration. In such cases, the eligible provider must negotiate with the eligible agency to determine an adequate level of funds to be used for non-instructional purposes. Code of Federal Regulations Title 34, Subtitle B, Chapter IV, Part 463, Subpart C, Section 463.26: An eligible provider receiving a grant or contract under this part may consider costs incurred in connection with the following activities to be administrative costs: a) Planning; b) Administration, including carrying out performance accountability requirements; c) Professional development; d) Providing adult education and literacy services in alignment with local workforce plans, including promoting co-enrollment in programs and activities under Title I, as appropriate; and e) Carrying out the one-stop partner responsibilities described in ?678.420, including contributing to the infrastructure costs of the one-stop delivery system. Condition During procedures performed to test the earmarking requirement, we noted that the District was granted a waiver of the 5 percent administrative cost limit and was instead approved for a 7.1 percent limit. We noted that the District accounts for such administrative expenditures using a separate program code in its SAP system. The expenditures recorded under those program codes did not exceed 7.1 percent of the total grant award. However, during additional analysis over payroll costs, we identified the following positions, which appeared to be administrative functions, but whose salaries were not recorded under the administrative program codes. "See Schedule of Findings and Questioned Costs for chart/table"The District?s Division of Adult and Career Education provided us with job duties for the above positions. The job duties for the Office Technician and Senior Office Technician positions include creating and printing labels and forms related to TOPS (Tracking of Programs and Students) Entry and CASAS (Comprehensive Adult Student Assessment Systems) assessment, scanning TOPS entry forms, maintaining the data collected, ordering CASAS forms, assessments, and other supplies, time reporting for professional development, and training new employees. The job duties for the Microcomputer Support Assistant position consisted of maintaining, configuring, and updating computers in computer labs used for learning, testing, and data collection. We noted that the TOPS Entry and CASAS assessments were part of the data collection and accountability requirements set forth by CDE. We concluded, based on 34 CFR 463.26, that the job duties described above were administrative activities and, as such, the above positions should be recorded and reported under administrative costs. In addition, during procedures performed to test non-payroll expenditures, we discovered $18,878 of administrative costs that were transferred into the program expenditures but were not recorded as administrative costs. The District reported $807,298 of administrative costs for the fiscal year 2019-2020. The maximum allowable administrative costs are $1,191,157, which is 7.1% of the $16,776,855 total grant award. The original cost charged to administrative, plus the administrative cost of $18,878 and the payroll costs of $1,238,946 related to the above positions, amounts to $2,065,121 for total costs related to administrative activities. Cause and Effect The condition appears to be caused by oversight, in which the District was not aware that activities related to carrying out performance accountability requirements should be considered administrative. Questioned Costs $2,065,121 ? $1,191,157 = $873,964 Recommendation We recommend that the District update its classifications of payroll costs to record the three positions in question as administrative costs. Also, we recommend that all transfers of cost are reviewed carefully and charged to the appropriate SAP program code to ensure the 7.1% administrative limit is not exceeded.

Program Identification Finding Reference Number: F-2020-003 Federal Catalog of Domestic Assistance Number(s): 84.010 Federal Program Titles: Title I Grants to Local Education Agencies (LEAs) (Material Weakness) Awarding Agency / Pass-Through Entity: U.S. Department of Education, California Department of Education Award Number: PCA No. 14329 Compliance Requirement: Special Tests ? Annual Report Card, High School Graduation Rate State Audit Guide Finding Code: 30000 and 50000 Criteria Annual Report Card, High School Graduation Rate An SEA and its LEAs must report graduation rate data for all public high schools at the school, LEA, and State levels using the 4-year adjusted cohort rate under 34 CFR section 200.19(b)(1)(i)-(iv). Additionally, SEAs and LEAs must include the 4-year adjusted cohort graduation rate (which may be combined with an extended-year adjusted cohort graduation rate or rates) in adequate yearly progress (AYP) determinations. Graduation rate data must be reported both in the aggregate and disaggregated by each subgroup described in 34 CFR section 200.13(b)(7)(ii) using a 4-year adjusted cohort graduation rate. Only students who earn a regular high school diploma may be counted as a graduate for purposes of calculating the 4-year adjusted cohort graduation rate. To remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a General Educational Development (GED) program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort (Title I, Sections 1111(b)(2) and (h) of ESEA (20 USC 6311(b)(2) and (h)); 34 CFR section 200.19(b)). Section 8.3 of the LAUSD Attendance Manual states School staff shall document students who withdraw from the school. School staff shall follow Appendix J-2: Elementary School Withdrawal Symbols and Appendix J-3: Secondary School Withdrawal Symbols when recording withdrawal data. Section XI.B of LAUSD REF-6554.3 states the Parent Assurance Letter (PAL) is the official form used to document withdrawal, transfer, and other student movement and that the form must be signed and submitted by the parent/guardian for student withdrawals. Condition We sampled 60 out of 159,656 students with leave codes in the school year 2018-19 My Integrated Student Information System (MiSiS) data file to verify that the leave code and reason code reported in MiSiS was properly supported. In our review of the documentation in comparison to the leave and reason code, we noted the following exceptions: 1. One (1) school provided documentation for one (1) student that did not support the leave code entered into MiSiS. However, the student later re-enrolled to LAUSD and matriculated. 2. Four (4) student files from two (2) schools did not have official written documentation to support withdrawals for students who transferred out of the District, which would have caused the students to be removed from the cohort in the calculation of the adjusted cohort graduation rate. The schools were only able to provide notes from phone conversations with parents or other family members. One (1) of the four (4) students later re-enrolled to LAUSD and is currently enrolled. 3. One (1) school was not able to provide any type of documentation for one (1) student file. Our sample was a statistically valid sample. Cause and Effect 1. The discrepancy in the leave code was caused by the school using the ?L3? code (student transfers to a California public school outside LAUSD) when they did not have enough information to substantiate that code. 2. The notes from phone conversations with parents or other family members were used by the schools to determine the leave codes without obtaining official written documentation. However, the leave codes recorded in MiSiS were correct based on the notes. 3. The lack of any type of documentation from one school was caused by the limited access to files kept on school grounds due to the ongoing COVID-19 pandemic. Inaccurate leave codes in MiSiS may lead to inaccurate data collected by CDE, which could lead to errors in the calculation of the graduation rate. This finding is a repeat finding and has been reported previously for June 30, 2018 (F-2018-004) and June 30, 2019 (F-2019-002). Questioned Costs Not applicable. This finding is considered a programmatic non-compliance issue as well as a deficiency in the internal control system to properly train and monitor the personnel who are assigned to maintain the accuracy of student records. Recommendation We recommend the District continue to strengthen its controls over enrollment/withdrawal status by providing adequate training/monitoring to ensure that student records on MiSiS are accurate and that necessary ?official written documents? are maintained. We recommend that the training include the appropriate levels of written documentation required to be maintained for different situations under both ESSA guidance and CDE guidance.

Program IdentificationFinding Reference Number: F-2019-001Federal Program Title, AwardingAgency, Pass-Through Entity,Catalog of Federal DomesticAssistance (CFDA) Number, andAward Number:Special Education Cluster (IDEA), U.S. Department ofEducation, Passed through the California Department ofEducation, CFDA Nos. 84.027 and 84.173, PCA Nos.13430 and 10115. (Material Weakness)Child Care and Development Fund: Child Care andDevelopment Block Grant, Child Care Mandatory andMatching Funds of the Child Care and Development Fund,Department of Health and Human Services, Passedthrough the California Department of Education, CFDANos. 93.575, 93.596, Contract Nos. CCTR-8100 andCSPP-8216 (Significant Deficiency)Compliance Requirement: Cost PrinciplesState Audit Guide Finding Code: 30000 and 50000 Criteria2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires that charges toFederal awards for salaries and wages must be based on records that accurately reflect the workperformed. These records must:? Be supported by a system of internal control which provides reasonable assurance that thecharges are accurate, allowable, and properly allocated;? Be incorporated into the official records of the non-Federal entity;? Reasonably reflect the total activity for which the employee is compensated by the non-Federalentity, not exceeding 100% of compensated activities;? Encompass both federally assisted and all other activities compensated by the non-Federal entityon an integrated basis, but may include the use of subsidiary records as defined in the non-Federalentity's written policy;? Comply with the established accounting policies and practices of the non-Federal entity;? Support the distribution of the employee's salary or wages among specific activities or costobjectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activitieswhich are allocated using different allocation bases; or an unallowable activity and a direct orindirect cost activity.In accordance with LAUSD Policy Bulletin 2643.8, Documentation for Employees Paid from Federal andState Categorical Programs, the Periodic Certification (formerly referred to as Semi-AnnualCertifications) must be completed each fiscal year for employees whose compensation is singularlysourced from federal funds. The first periodic certification is for the period July 1st through December31st, and the second periodic certification is for the period January 1st through June 30th. Thesecertifications should be completed no later than January 31st and July 31st, respectively.ConditionAs part of our compliance review over payroll expenditures, we selected a sample of payroll expenditurescharged to the program to ascertain if they were allowable per program regulations, accurately charged tothe program, and appropriately supported in accordance with the 2 CFR section 200.430 and LAUSDPolicy Bulletin 2643.8.Special Education Cluster: In our sample of sixty (60) payroll expenditures, we noted that three (3)employees provided a signed periodic certification; however, the certifications were signed subsequent toour request.Total exceptions amounted to $18,151 of the $278,281 sampled from $40,717,350 of the total payrollexpenditures.Our sample was a statistically valid sample.Child Care and Development Fund Cluster: In our sample of sixty (60) payroll expenditures, we notedthat two (2) employees provided a signed periodic certification; however, the certifications were signedsubsequent to our request.Total exceptions for the two untimely certifications amounted to $3,985 of the $78,628 sampled from the$96,070,797 of the total payroll expenditures.Our sample was a statistically valid sample.Cause and EffectThe untimely certifications appear to be incidents in which employees did not follow the District?spolicies and procedures.This finding is a repeat finding and has been reported previously for June 30, 2018 (F-2018-001) but fordifferent grants.Questioned CostsThe total cost related to the above-mentioned conditions amounted to $22,136:Special Education Cluster (CFDA 84.027, 84.173): $18,151 due to untimely certifications.Child Care and Development Fund Cluster (CFDA 93.575, 93.596): $3,985 due to untimely certifications.RecommendationWe recommend that the District continue to provide ongoing training to appropriate personnel on therequired procedures and include a process to monitor compliance with those procedures.

Program IdentificationFinding Reference Number: F-2019-002Federal Catalog of DomesticAssistance Number(s): 84.010Federal Program Titles: Title I Grants to Local Education Agencies (LEAs)Awarding Agency / Pass-ThroughEntity:U.S. Department of Education, California Department ofEducationAward Number: PCA No. 14329Compliance Requirement: Special Tests and Provisions ? Annual Report Card, HighSchool Graduation Rate (Material Weakness)Special Tests and Provisions ? Assessment System Security(Significant Deficiency)State Audit Guide Finding Code: 30000 and 50000CriteriaAnnual Report Card, High School Graduation RateAn SEA and its LEAs must report graduation rate data for all public high schools at the school, LEA, andState levels using the 4-year adjusted cohort rate under 34 CFR section 200.19(b)(1)(i)-(iv). Additionally,SEAs and LEAs must include the 4-year adjusted cohort graduation rate (which may be combined with anextended-year adjusted cohort graduation rate or rates) in adequate yearly progress (AYP) determinations.Graduation rate data must be reported both in the aggregate and disaggregated by each subgroupdescribed in 34 CFR section 200.13(b)(7)(ii) using a 4-year adjusted cohort graduation rate. Only studentswho earn a regular high school diploma may be counted as a graduate for purposes of calculating the 4-year adjusted cohort graduation rate. To remove a student from the cohort, a school or LEA must confirm,in writing, that the student transferred out, emigrated to another country, or is deceased. To confirm that astudent transferred out, the school or LEA must have official written documentation that the studentenrolled in another school or in an educational program that culminates in the award of a regular highschool diploma. A student who is retained in grade, enrolls in a General Educational Development (GED)program, or leaves school for any other reason may not be counted as having transferred out for thepurpose of calculating graduation rate and must remain in the adjusted cohort (Title I, Sections 1111(b)(2)and (h) of ESEA (20 USC 6311(b)(2) and (h)); 34 CFR section 200.19(b)).Section 8.3 of the LAUSD Attendance Manual states School staff shall document students who withdrawfrom the school. School staff shall follow Appendix J-2: Elementary School Withdrawal Symbols andAppendix J-3: Secondary School Withdrawal Symbols when recording withdrawal data. Assessment System SecuritySection 1111(b)(3)(c)(iii) of the ESEA - States, in consultation with LEAs, are required to establish andmaintain an assessment system that is valid, reliable, and consistent with relevant professional andtechnical standards. Within their assessment system, SEAs must have policies and procedures tomaintain test security and ensure that LEAs implement those policies and procedures.LAUSD REF-054497 ? 2018-19 Initial English Language Proficiency Assessments for California(ELPAC) Requirements for Principals, Coordinators, and Support Staff:Section III. Principal and ELPAC Coordinator Requirements for Release of Initial ELPAC Materialsstates the principal and ELPAC coordinator must complete their respective requirements before STBapproves the release of ELPAC materials for the administration of the Initial ELPAC.LAUSD REF-54498 ? 2018-19 California Assessment of Student Performance and progress (CAASPP)Requirements for Principals, Coordinators, and Support Staff:Section III. Principal?s Requirements states principals at schools administrating CAASPP tests mustelectronically certify the 2018-19 CAASPP Security Affidavit and Security Agreement in the Principal?sPortal and designate a CAASPP coordinator in the Principal?s Portal.Section IV. Coordinator Requirements states the CAASPP coordinator and each staff member for whomtest site coordinator access is requested must complete the coordinator requirements, which includeelectronically signing the 2018-19 CAASPP Security Agreement and Affidavit and attending variousmeetings and online training sessions.ConditionAnnual Report Card, High School Graduation RateWe sampled a total of sixty (60) out of 163,029 students with leave codes in the school year 2017-18 MyIntegrated Student Information System (MiSiS) enrollment file to verify that the leave code and reasoncode reported in MiSiS was properly supported. In our review of the documentation in comparison to theleave and reason code, we noted the following exceptions: 1. Five (5) student files from four (4) schools provided documentation that did not support the leave code entered into MiSiS: "See Schedule of Findings and Questioned Costs for chart/table" Our sample was a statistically valid sample.Assessment System SecurityIn testing the District?s adherence to the aforementioned Reference Guides, we selected 30 out of 783schools that administered the ELPAC and 30 out of 774 schools that administered the CAASPP, to verifythat the principals and coordinators followed the required procedures prior to administering the exams andthat the Student Testing Branch did not release the ELPAC materials prior to those requirements beingmet. We noted the following exceptions:- For one (1) school, the ELPAC materials were delivered to the school prior to the submission ofthe 2018-19 ELPAC Security Agreement and Affidavit.- For one (1) school, the delivery date of the ELPAC testing material could not be verified as therewas no documentation available.Our sample was a statistically valid sample.Cause and EffectAnnual Report Card, High School Graduation RateThe discrepancies in the leave codes were caused by clerical errors and/or schools using the ?L3? code(Student transfers to a California public school outside LAUSD) when they did not have enoughinformation to substantiate that code. See above table for breakdown.Inaccurate leave codes in MiSiS may lead to inaccurate data collected by CDE, which could lead to errorsin the calculation of the graduation rate.This finding is a repeat finding and has been reported previously for June 30, 2018 (F-2018-004).Assessment System SecurityThe condition was caused by an oversight on the completion of requirements by the coordinator andprincipal at the school and oversight by Student Testing Branch (STB) staff in monitoring the submissionof the required forms.Questioned CostsAnnual Report Card, High School Graduation RateNot applicable. This finding is considered a programmatic non-compliance issue as well as a deficiency inthe internal control system to properly train and monitor the personnel who are assigned to maintain theaccuracy of student records.Assessment System SecurityNot applicable. This finding is considered a programmatic non-compliance issue as well as a deficiency inthe internal control over monitoring the submission of the ELPAC Security Forms and the release of thetesting material.RecommendationAnnual Report Card, High School Graduation RateWe recommend the District continue to strengthen its controls over enrollment/withdrawal status byproviding adequate training/monitoring to ensure that student records on MiSiS are accurate and updatedwhen new information is available and that necessary documents are kept on file at school sites.Assessment System SecurityWe recommend that the District strengthen its monitoring process to ensure that the required SecurityForms are submitted prior to the release of the testing materials.

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