Report 2012-044 Recommendation 3 Responses

Report 2012-044: California Department of Education: Despite Some Improvements, Oversight of the Migrant Education Program Remains Inadequate (Release Date: February 2013)

Recommendation #3 To: Education, Department of

To improve its understanding of regional expenditures, Education should increase the level of detail required in its quarterly expenditure reports. The level of detail should allow Education to select expenditures for review.

Annual Follow-Up Agency Response From November 2016

Fully Implemented. As reported in Education's one-year response dated

March 24, 2014, and the annual response dated October 7, 2015, the quarterly expenditure reports have been redesigned to reflect the more detailed grant application (also referred to as the Regional Application and District Service Agreement) budget formats. In 2015-16, for those regions not evaluated via a Federal Program Monitoring Review, Education updated its internal quarterly expenditure report checklist (Attachment 1) to include item No. 17, which requires subgrantees (also referred to as regions and direct funded districts) to

submit additional supporting documentation. For example, the supporting documentation requested includes copies of local budgeted expenditure reports to support expenses reported under object code 4300 (materials and supplies), object code 5800 (contracts with outside vendors), and any other object code Education deems necessary as part of the expenditure review process.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

We verified that Education's new quarterly expenditure review form directs analysts to request supporting documentation for the object codes for which Education believes most questionable costs are likely to be found. We reviewed examples of Education analysts requesting supporting documentation and an example of Education disallowing a particular expenditure based on this review. As a result of this review, we agree that this recommendation has been fully implemented.


Annual Follow-Up Agency Response From October 2015

Education considers this recommendation fully implemented. As reported in Education's one-year response dated March 24, 2014, the quarterly expenditure reports have been redesigned to reflect the more detailed Regional Application (RA) and District Service Agreement (DSA) budget formats. The expenditure reports provide detailed region expenditures by object and resource codes that align with the approved budget expenditures in the RA. The increased level of detail is utilized by Education to evaluate expenditures for adherence to federal administrative cost principles.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Education's expenditure forms do not include a level of detail that would allow Education to select expenditures for review, which was a key element to this recommendation. Because of this, we assess this recommendation as pending implementation.


Annual Follow-Up Agency Response From October 2014

Education considers this recommendation fully implemented. As reported in Education's one-year response dated March 24, 2014, the quarterly expenditure reports have been redesigned to reflect the new, more detailed, Regional Application (RA) and District Service Agreement (DSA) budget formats. The expenditure reports provide detailed region expenditures by object and resource codes to align with the approved budget expenditures in the RA. The increased level of detail will be utilized by Education to evaluate expenditures for adherence to federal administrative cost principles.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Although Education provided us with its revised expenditure forms, those forms do not include a level of detail that would allow Education to select expenditures for review. Because this was a key element to this recommendation, the recommendation is still pending implementation.


1-Year Agency Response

The quarterly expenditure reports have been redesigned to reflect the new, more detailed, Regional Application (RA) and District Service Agreement (DSA) budget formats. The expenditure reports provide detailed region expenditures by object and resource codes to align with the approved budget expenditures in the RA. The increased level of detail will be utilized by Education to evaluate expenditures for adherence to federal administrative cost principles.

California State Auditor's Assessment of 1-Year Status: Pending

Although Education provided us with its revised expenditure forms, those forms do not include a level of detail that would allow Education to select expenditures for review. Because this was a key element to this recommendation, the recommendation is still pending implementation.


6-Month Agency Response

The quarterly expenditure reports are being redesigned to reflect the new more detailed RA and DSA budget formats. The alignment of expenditure reports to the new applications will allow Education to compare expenditures to the approved services and budget. In addition, the increased level of detail will allow Education to more readily evaluate expenditures for adherence to Office of Management and Budget (OMB) Circular A-87 Cost Principles. Education plans to have the revised expenditure reports ready for field use in 2013-14. Guidance on completing the revised expenditure reports will be incorporated into the revised Migrant Education Fiscal Handbook.

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

The U.S. Department of Education revised the budget portions of the District Service Agreement and the Regional Application for fiscal year 2013-14 to clarify the types of expenditures as they relate directly to programs. In addition, as described in the response to recommendation number four, Education is also making other reporting revisions to allow a more effective selection of expenditures for review.

California State Auditor's Assessment of 60-Day Status: Pending


All Recommendations in 2012-044

Agency responses received after June 2013 are posted verbatim.