audit_findings: 40
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| rowid | source | report_number | finding_number | muni_id | state | entity_name | entity_type | entity_ext_id | place_geoid | match_method | auditor | report_title | audit_type | fiscal_year | period_start | period_end | published_date | finding_category | severity | questioned_cost | cost_basis | finding_title | finding_text | report_url | fetched_at |
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| 40 | wa-sao | 1021330 | 2017-001 | WA | Shelton School District No 309 | School District | 1970 | no_match | Washington State Auditor's Office | Financial and Federal audit — Shelton School District No 309 | Financial and Federal | 2017 | 2016-09-01 | 2017-08-31 | 2018-05-17 | federal_award_compliance | material_weakness | 0.0 | Questioned Cost Amount: $0 | The District lacked adequate internal controls to ensure compliance with requirements regarding suspension and debarment and graduation rate reporting for the Title I grant program. CFDA Number and Title: 84.010, Title I Grants to Local Agencies Federal Grantor Name: United States Department of Education Federal Award/Contract Number: Not applicable Pass-through Entity Name: Office of Superintende | Background The objective of the Title I program is to improve the teaching and learning of children who are at risk of not meeting state academic standards and who reside in areas with high concentrations of low-income families. During fiscal year 2017, the District spent $1,178,952 in Title I program funds. Federal regulations require federal -money recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include knowledge of grant requirements and monitoring of program controls. Suspension and debarment Federal requirements prohibit grant recipients from contracting with or making sub-awards to parties suspended or debarred from doing business with the federal government. The District must verify that all contractors receiving $25,000 or more and all sub-awards have not been suspended or debarred. This verification may be accomplished by collecting a written certification from the party, or adding a clause Washington State Auditor's Office ___________________________________________________________________________________________________________________ or condition into the contract. Alternatively, the District may review the federal Excluded Parties List issued by the U.S. General Service Administration. The District must meet one of these requirements before entering into contracts with contractors or sub-recipients. Graduation rate reporting Districts must report graduation -rate data for all public high schools to OSPI annually. Among other purposes, this information is u sed to determine if the District has met adequate yearly progress requirements for Title I funding. The District reports this information in a Graduation Rate Report that indicates the student’s enrollment status: graduated, transferred out, dropped out, m igrated to another country or deceased. The District must retain adequate support for each student’s reported status and for changes to a student’s status. Students identified on the report as transferred are excluded from that District’s graduation rate. To confirm that a student transferred out, the District 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. Description of Condition Suspension and debarment The District did not have internal controls in place to ensure contractors were not suspended or debarred from participating in federal programs before entering into contract. This issue was not reported as a finding in the prior audit. We consider this control deficiency to be a significant deficiency. Graduation rate reporting We found the District did not adequately design or follow controls to ensure compliance with the Title I graduation reporting requirements. Specifically, the District did not have official written documentation to support all reports of students transferred out of the District. This issue was reported as a finding in the prior audit as finding 2016-002. We consider this control deficiency to be a material weakness. Washington State Auditor's Office ___________________________________________________________________________________________________________________ Cause of Condition Suspension and debarment Employees responsible for ensuring compliance with requirements regarding suspension and debarment for the Title I grant program were not aware of the requirements. Graduation rate reporting District staff were not aware of the requirement to obtain and r etain written documentation for students transferring to another district. Effect of Condition and Questioned Costs Suspension and debarment The District did not ensure two contractors were not suspended or debarred before entering into contract. Without proper controls, the District increases the risk of awarding grant funds to contractors and sub -recipients that are excluded from participating in federal programs. Any payments made to an ineligible party are unallowable and would be subject to recovery by the funding agency. We confirmed the contractors were not suspended or debarred; therefore, we are not questioning costs. Graduation rate reporting The District did not retain appropriate, official written documentation to support the transfer status for eight of 18 students tested. As a result, t he District is at risk of incorrectly calculating graduation rates. Recommendations We recommend the District improve internal controls to ensure: Staff responsible for ensuring compliance with federal requirements receive appropriate training Verification that all contractors receiving $25,000 or more and all sub-awardees are not excluded from doing business with the federal government Accurate reporting of graduation rate data to OSPI and retention of records to support the data reported Washington State Auditor's Office ___________________________________________________________________________________________________________________ District’s Response Suspension and Debarment The Executive Director of Finance has contacted all staff in the district that receives Federal Funds to remind them of the Suspension and Debarment rules. The rules are listed in the district’s board policy no. 6220 procedures. This board policy will also be updated this year in the district’s board policy review. An e-mail was sent to all district staff involved in f ederal funds on April 12, 2018 directing them to District Board Policy no. 6220 for purchasing with federal funds. Graduation Rate Reporting The CHOICE High School principal has instructed the school registrar on proper procedures as far as only indicating that a student transferred if we received written confirmation from the sending school, or could verify in CEDARS (and then printed the verification for the file). In addition, the CHOICE registrar printed all students with a withdraw code for the 2017 -2018 school year to review all transfers and make sure we have the necessary written documentation. The Executive Director of Finance also sent guidance to all district registrars outlining appropriate written confirmation that a student is enrolled at anoth er district, instructing them to ensure this documentation is in place before removing them from the cohort as a transfer out. Auditor’s Remarks We appreciate the District’s response and recognize that the District is committed to ongoing quality improvement and working to improve its internal controls and ensure compliance. We also wish to thank District management and staff for their cooperation and assistance throughout the audit. We look forward to working with the District on this issue and will review the District’s corrective action during our next audit. Applicable Laws and Regulations The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, paragraph 11. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Washington State Auditor's Office ___________________________________________________________________________________________________________________ (Uniform Guidance), section 303, Internal controls, establishes internal control requirements for management of Federal awards to non-Federal entities. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 U.S. Code of Federal Regulations (CFR) Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension , section 220, Are any procurement contracts included as covered transactions?, defines covered transactions. Title 2 U.S. Code of Federal Regulations (CFR) Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension, section 300, What must I do before I enter into a covered transactions with another person at the next lower tier?, outlines suspensio n and debarment requirements and methods of ensuring compliance. Title 34, U.S. Code of Federal Regulations (CFR) Part 200, Title I – Improving the Academic Achievement of the Disadvantaged, section 19, Other academic indicators, establishes requirements for calculating and reporting graduation rates to the State levels. Washington State Auditor's Office ___________________________________________________________________________________________________________________ | https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1021330&isFinding=false&sp=false | 2026-07-30 13:24:54 |