Atlanta Independent School System, single audit report for the fiscal year ended June 30, 2009, June 30, 2009

ATLANTA INDEPENDENT SCHOOL SYSTEM
SINGLE AUDIT REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2009

ATLANTA INDEPENDENT SCHOOL SYSTEM
SINGLE AUDIT REPORT FOR THE YEAR ENDED JUNE 30, 2009

TABLE OF CONTENTS

Page

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ............................................................. 1- 3

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 ............................................................................................................................... 4-6

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS....................................................................................... 7- 9

NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ............................................................ 10

SCHEDULE OF FINDINGS AND QUESTIONED COSTS.......................................................................................... 11-14

SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS .................................................................... 14

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Superintendent and Members of the Atlanta Independent School System
Atlanta, Georgia
We have audited the financial statements of the governmental activities, business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the Atlanta Independent School System (the "School System") as of and for the year ended June 30, 2009, which collectively comprise the Atlanta Independent School System's basic financial statements and have issued our report thereon dated February 26, 2010. Our report was modified to include a reference to other auditors and describes the change in accounting policy and estimates associated with capitalization threshold and depreciation methods for the School System's capital assets. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Other auditors audited the financial statements of the School System's discretely presented component unit, the Atlanta Educational Telecommunications Collaborative, Inc., and the School System's belended component units (charter schools) which included: Drew Charter School, Inc.; Imagine Wesley International Academy, LLC; KIPP West Atlanta Young Scholars Academy, Inc.; Neighborhood Charter School, Inc.; Southeast Atlanta Charter Middle School, Inc.; Tech High School, Inc.; and University Community Academy Inc., as described in our report on the School System's financial statements. This report does not include the results of the other auditors' testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. The financial statements of Atlanta Educational Telecommunications Collaborative, Inc.; Drew Charter School, Inc.; KIPP West Atlanta Young Scholars Academy, Inc.; Neighborhood Charter School, Inc.; Southeast Atlanta Charter Middle School, Inc.; Tech High School, Inc.; and University Community Academy, Inc. were not audited in accordance with Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the School System's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School System's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Atlanta Independent School System's internal control over financial reporting.

Our consideration of the internal control over financial reporting was for the limited purpose described in the first preceding paragraph and would not necessarily identify all deficiencies in the internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies.
A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the School System's internal control. We consider the deficiencies described in the accompanying schedule of findings and questioned costs, as item 2009-1 to be a significant deficiency in internal control over financial reporting.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also consdiered to be material weaknesses. However, we consider the significant deficiency described above as item 2009-1 to be a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the School System's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance or other matters that are required to be reported under Government Auditing Standards and which is described in the accompanying schedule of findings and questioned costs as item 2009-2.
We also noted certain matters that we reported to management of the Atlanta Independent School System in a separate letter dated February 26, 2010.
The School System's responses to the findings identified in our audit are descibed in the accompanying schedule of findings and questioned costs. We did not audit the School System's responses and, accordingly, we expresee no opinion on them.
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This report is intended solely for the information of management, the members of the Atlanta Independent School System, others within the entity, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Atlanta, Georgia February 26, 2010
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INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON
INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
To the Superintendent and Members of the Atlanta Independent School System
Atlanta, Georgia
Compliance
We have audited the compliance of the Atlanta Independent School System (the "School System") with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2009. The School System's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the School System's management. Our responsibility is to express an opinion on the Atlanta Independent School System's compliance based on our audit.
The School System's basic financial statements include the operations of the Drew Charter School, Inc.; KIPP West Atlanta Young Scholars Academy, Inc.; University Community Academy, Inc.; Southeast Atlanta Charter Middle School, Inc.; Imagine Wesley International Academy, LLC, and Tech High School, Inc.; which received $554,517; $445,617; $164,721; $44,452; $61,533, and $112,881, respectively, in federal awards which are not included in the Schedule of Expenditures of Federal Awards for the year ended June 30, 2009. Our audit, described below, did not include the operations of these entities because these charter schools engaged other auditors.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the School System's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the School System's compliance with those requirements.

In our opinion, the Atlanta Independent School System complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2009. However, the results of our auditing procedures disclosed an instance of noncompliance with those requirements, which is required to be reported in accordance with OMB Circular A-133 and is described in the accompanying schedule of findings and questioned costs as item 2009-3.
Internal Control Over Compliance
The management of the Atlanta Independent School System is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the Atlanta Independent School System's internal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Atlanta Independent School System's internal control over compliance.
Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in the Atlanta Independent School System's internal control that might be significant deficiencies or material weaknesses as defined below. However, as discuss below, we identified a certain deficiency in internal control over compliance that we consider to be a significant deficiency.
A control deficiency in an entity's internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity's internal control. We consider the deficiency in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2009-3 to be a significant deficiency.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity's internal control. We did not consider the deficiency described in the accompanying schedule of findings and questioned costs to be a material weakness.
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Schedule of Expenditures of Federal Awards We have audited the financial statements of the governmental activities, business type activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund information of the Atlanta Independent School System as of and for the year ended June 30, 2009, and have issued our report thereon dated February 26, 2010, which refers to the work of other auditors and describes the change in accounting policy and estimates associated with capitalization threshold and depreciation methods for the School System's capital assets. Our audit was performed for the purpose of forming our opinions on the financial statements that collectively comprise the Atlanta Independent School System's basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
The Atlanta Independent School System's responses to the finding identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit Atlanta Independent School System's response and, accordingly, we express no opinion on them.
This report is intended solely for the information and use of management, the members of the Atlanta Independent School System, others within the entity, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Atlanta, Georgia February 26, 2010
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ATLANTA INDEPENDENT SCHOOL SYSTEM
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2009

FEDERAL GRANTOR/PASS-THROUGH GRANTOR/PROGRAM TITLE
U.S. Department of Agriculture: Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program: Cash Assistance Non-Cash Assistance (Commodities) - Note 2
Total Child Nutrition Cluster
Total U.S. Department of Agriculture
U.S. Department of Education: Direct Enhanced Reading Opportunities Professional Development for Arts Educators Atlanta Emergency Response & Crisis Management Impact Aid Advance Placement Incentive
Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act (IDEA) Part B-Special Education Flow Through Preschool
Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Improving Academic Achievement School Improvement Distinguished District Awards
Reading First State Grants

CFDA NUMBER
10.553 10.555 10.555

Subtotal

84.215 84.351 84.184 84.041 84.330

Subtotal

84.027 84.173

Subtotal

84.010 84.010 84.010
84.357

PASSTHROUGH ENTITY ID NUMBER

TOTAL EXPENDITURES

N/A

$

N/A N/A

4,562,419
14,613,506 1,571,551
20,747,476
20,747,476

N/A

638,860

N/A

94,164

N/A

80,214

N/A

137,168

N/A

15,712

966,118

N/A

8,038,230

N/A

243,199

8,281,429

N/A

40,638,650

N/A

1,371,663

N/A

202,446

42,212,759

N/A

3,273,155

(Continued)

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ATLANTA INDEPENDENT SCHOOL SYSTEM
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2009

FEDERAL GRANTOR/PASS-THROUGH GRANTOR/PROGRAM TITLE
Title II Improving Teacher Quality Advanced Placement
Teacher Teamwork and Technology
Other Programs Pass-Through From Georgia Department of Education Title III Limited English Proficient Immigrant
Title IV Safe and Drug Free Schools And Communities Education for Homeless Children and Youth
Title V State Grants for Innovative Programs

CFDA NUMBER

Subtotal

84.367 84.367
84.318

PASSTHROUGH ENTITY ID NUMBER

TOTAL EXPENDITURES

N/A

7,330,257

N/A

3,895

7,334,152

N/A

87,180

84.365

N/A

84.365

N/A

Subtotal

84.186

N/A

84.196

N/A

Subtotal

84.298

N/A

150,043 11,250
161,293
515,239 33,070
548,309
86,438

Pass-Through From Georgia Department of Education

Vocational Education-Basic Grants to States

Professional Development

84.048

N/A

Education Career Partnership

84.048

N/A

Program Improvement

84.048

N/A

Subtotal

Pass-Through From Georgia State University Teacher Quality Enhancement Grant

84.336

N/A

Pass-Through From Georgia Department of Technical and Adult Education Adult Education

84.002

N/A

American Recovery Reinvestment Act State Fiscal Stabilization Funds

84.394A

N/A

Charter Schools

84.282

N/A

School Improvement Federal - G funds

84.377

N/A

Learn and Serve America

94.004

N/A

79,909 53,108 552,836 685,853
55,106
800,768
3,090,493 200,000 695,858 1,750

Total U.S. Department of Education
U.S. Department of Health and Human Resources: Other Programs Pass-Through From Georgia Department of Community Health Child Intervention Services
Pass-Through From YMCA Head Start
Total U.S. Department of Health and Human Services
National Science Foundation Direct Atlanta Urban Systemic Initiative (ASI)

93.912

N/A

93.600

N/A

47.076

N/A

68,480,661 337
388,807 389,144 230,218

(Continued)

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ATLANTA INDEPENDENT SCHOOL SYSTEM
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2009

FEDERAL GRANTOR/PASS-THROUGH GRANTOR/PROGRAM TITLE
U. S. Department of Defense: R.O.T.C. Program-Air Force R.O.T.C. Program-Navy Total U.S. Department of Defense
Total Expenditures of Federal Awards

CFDA NUMBER

PASSTHROUGH ENTITY ID NUMBER

TOTAL EXPENDITURES

12. unknown

N/A

12. unknown

N/A

1,004,927 95,420
1,100,347

$

90,947,846

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ATLANTA INDEPENDENT SCHOOL SYSTEM
NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2009

NOTE 1.

BASIS OF PRESENTATION
The Schedule of Expenditures of Federal Awards includes the federal grant activity of the Atlanta Independent School System and is presented on the accrual basis of accounting.
The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the financial statements.

NOTE 2.

FOOD DONATION (COMMODITIES) PROGRAM
The amounts shown for the Food Donation Program (Non-cash assistance commodities) on the schedule of expenditures of federal awards represent the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the School System during the current fiscal year.

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ATLANTA INDEPENDENT SCHOOL SYSTEM
SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009

Financial Statements Type of auditor's report issued

SECTION I SUMMARY OF AUDIT RESULTS
Unqualified

Internal control over financial reporting: Material weaknesses identified?

__X_ yes ____ no

Significant deficiencies identified not considered to be material weaknesses?

____ yes __X_ none reported

Noncompliance material to financial statements noted? __X__ yes ___ no

Federal Awards Internal Control over major programs: Material weaknesses identified?

____ yes __X_ no

Significant deficiencies identified not considered to be material weaknesses?

__X_ yes ____ none reported

Type of auditor's report issued on compliance for major programs

Unqualified

Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)?

__X_ yes ____ no

Identification of major program: Name of Federal Program or Cluster / CFDA Number

Non-Cluster Programs: U.S. Department of Education, Title I Grants to Local Educational Agencies, CFDA # 84.010 and State Fiscal American Recovery Reinvestment Act State Fiscal Stabilization Funds Education, CFDA # 84.394A

Child Nutrition Cluster: U.S. Department of Education, Title VIB Student Education Cluster, CFDA # 84.027 and 84.173

Dollar threshold used to distinguish between Type A and Type B programs:

$2,728,435

Auditee qualified as low-risk auditee?

___ yes _X_ no

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ATLANTA INDEPENDENT SCHOOL SYSTEM
SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009
SECTION II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
2009 - 1 Capital Assets Reporting
Criteria: Internal controls should be in place to ensure amounts reported as capital assets, depreciation expense and accumulated depreciation expense are properly recorded in accordance with generally accepted accounting principles and sufficient policy and procedures are in place for adequate maintenance of capital assets details.
Condition: Internal controls were not sufficient to detect material misstatements in the reporting of the School System's capital assets, depreciation expense, and accumulated depreciation expense for its governmental capital assets. Capital assets of the prior year were either duplicated or improperly excluded from the School System detailed capital asset listing. In addition, the School System changed its depreciation method from the half-year convention method to the monthly straight-line depreciation method in which both are generally accepted accounting prinicples. However, the School System's capital asset system incorrectly calculated current year depreciation expense and ending accumulated depreciation expense as a result of the accounting change.
Context/Cause: During our testing of capital assets, audit adjustments were required to decrease accumulated depreciation, book value of capital assets, and beginning net assets by approximately $6,284,000, $12,190,000, and $5,906,000, respectively, due to the duplication and omission of certain capital assets. In addition, audit adjustments were required to increase depreciation expense and accumulated depreciation expense by approximately $5,298,000 as result of errors in calculating depreciation expense. The errors above were not timely detected by the School System's management.
Effects: The net effect of the above errors in relation to the omission and duplication of assets resulted in governmental activities net capital assets and net assets of the prior year being overstated by approximately $5,906,000 while the error in calculating current year depreciation expense and ending accumulated depreciation expense resulted in an understatement of approximately $5,298,000.
Recommendation: We recommend the School System continue to strengthen internal controls to ensure the School System is properly reporting capital assets, calculating depreciation expense and accumulated depreciation, and that a proper review of the calculations are being conducted by an appropriate individual of the School System.
Views of Responsible Officials and Planned Correction Action: We concur with the finding. The prior period duplications and associated adjustments were detected by managements' internal control structure and presented to the auditors. These adjustments had no effect on the capital assets ending balances presented by management. However, we will take necessary steps in the future to recalculate depreciation expense and accumulated depreciation expense to ensure amounts are properly recorded.
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ATLANTA INDEPENDENT SCHOOL SYSTEM
SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009
SECTION II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS - CONTINUED
2009 - 2 Collateralization of Deposits
Criteria: State Statutes require all deposits and investments (other than federal or state government instruements) to be collaterialized by depository insurance, obiligations of the U.S. government, or bonds of public authorities, counties or municipalities.
Condition: As of June 30, 2009, the School System had approximately $129,000 in deposits that were not properly collateralized in accordance with the Official Code of Georgia Annotated (OCGA) Section 45-8-12 .
Context/Cause: The deposits with a financial institution exceeded the limit for federal depository insurance coverage and were not collateralized by obligations of the U.S. government, or bonds of public authorities, counties, or municipalities.
Effects: The failure of a finanical institution to fully insure or collateralize deposits could result in a financial loss to the School System should the financial instituion fail.
Recommendation: The School System should ensure that all deposits with financial institutions are properly coded as public funds. The School System should also monitor its deposits on an monthly basis to ensure all deposits over the federal depository insurance coverage limit are properly collateralized in accordance with State statues.
Views of Responsible Officials and Planned Correction Action: We concur with the finding. The deposits were collateralized at 107% and not 110%. Collateral was managed in accordance to interpretation of changes in FDIC regulations and one of the financial institutions used by the School System application of pledge collateral was subject to the change in the regulations. The deposits in question have been since fully collateralized within state requirements. The School System will ensure all deposits are properly coded as public funds and has a process in place to review the adequacy of the deposit collateral monthly, quarterly, and annually in accordance with state statutes.
2009 -3 Allowable Costs/Activities U.S. Department of Education, IDEA, (CFDA #84.027 and 84.173) Repeat
Criteria: In accordance with the terms of the Special Education Cluster (CFDA 84.027 and 84.173) and OMB Circular A-87, Cost Principles for State, Local and Indian Tribe Governments, semi-annual certification of time and effort sheets should be maintained for employees who work solely on a single cost objective (i.e. special education services). OMB Circular A-87 Attachment B, 8(h)4 also requires that the distribution of salaries and wages for employees, who work on multiple activities or cost objectives, be supported by personnel activity reports or equivalent documentation which reflect an after-the-fact distribution of the actual activity of each employee and be prepared at least monthly. These reports must also be signed by the employee.
Condition and Context: For the year ended June 30, 2009, the School System was not properly maintaining semiannual certification of time and effort sheets for teachers and other staff being paid out of Special Education funds and therefore, did not require documentation for the allocation of effort as required by OMB Circular A-87. The School System only conducted one annual certification of time and effort sheets for teachers and other staff at the beginning of the school term instead of conducting semi-annual certifications after the fact.
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ATLANTA INDEPENDENT SCHOOL SYSTEM
SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009
SECTION II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS - CONTINUED
2009 -3 Semi Allowable Costs/Activities U.S. Department of Education, IDEA, (CFDA #84.027 and 84.173) Repeat -Continued
Effects or possible effects: Personnel salaries unrelated to Special Education could be funded with Special Education funds. Therefore, unallowable costs could be charged to the grant.
Cause: There was a lack of oversight and a lack of understanding of the compliance requirements by management and/or program directors in relation to required time and effort reports.
Questioned Costs: Likely questioned costs of approximately $6,837,000.
Recommendation: We recommend the School System maintain semi-annual certification of time and effort sheets on all employees whose salaries are funded out of Special Education funds. Documentation of this should meet the requirements of OMB Circular A-87 Cost Principles for State, Local, and Indian Tribal Governments.
Views of Responsible Officials: After careful review, we concur that we did not have a periodic certification
form for individuals paid from IDEA Part B funds. A periodic certification process has been formalized. A communication process has been developed to notify all necessary staff about the revised process and procedures for periodic certification.
SECTION IV STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
2008 -5 Special Test - Title I, Part A, Schoolwide Programs (CFDA 84.010)
Finding: As noted in our testing of the schools in the district operation school-wide programs, zero (0) of the forty-six (46) schools tested had an annual evaluation of and results achieved by, the School-wide program and revision of the School-wide plan based on that evaluation included in the current year School-wide plans.
Status: Annual updates were evidenced in the plan which included revisions to academic data and targets, subject area focus, and instructional strategies to reflect the results of the evaluation. The School System's management have taken additional steps to ensure the plans include all Title I requirements and the evaluation component is clearly identifiable in all plans.
2008 -6 Semi-Annual Certification of Time and Effort Sheets Special Education Cluster
Finding: For the year ended June 30, 2008, the School System was not properly maintaining semi-annual certification of time and effort sheets for teachers and other staff being paid out of Special Education funds and therefore, did not require documentation for the allocation of effort as required by OMB Circular A-87.
Status: Repeat Finding See 2009-3 in the section III, Federal Awards Findings and Questioned Costs.
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