Exit Items (Attachment A) Financial Statement Audit 1. Capital assets note During review of the notes to the financial statements we found the District: a. Omitted the required capital asset note disclosure in their notes to the financial statements b. Incorrectly stated the operating leases as noncancelable instead of cancelable in Commitments Under Noncapitalized (Operating) Leases. c. Reported $9,929,058 due to other funds in the financial statement but the Interfund Balances and Transfers note reported $9,29,058 4. Reported $9,943,401 Capital Projects Fund due to other funds balance in the financial statements but the Interfund Balances and Transfers note reported $9,927,336 We recommend the District present the capital asset disclosures in their notes to the financial statements as required by OSPI guidance. 2. Schedule of long-term liabilities ‘The amounts reported in the Schedule of Long-Term Liabilities for claims and judgments were understated $2,537,650, or 3.3% of total long-term liabilities. We recommended the District correct the errors and subsequently they provided a corrected Schedule of Long-Term Liat Single Audi 1. CFDA 84.027/173 Special education personal service contract approval During FY13-14 the district used federal special education funds to pay for personal services contracts which totaled approximately $1,504,186. We tested 12 personal service contracts, totaling $1,067,820 in contract amounts and found seven did not follow the district's contracting policy for obtaining final district approval before having the contractors perform services ‘We recommend the district continue to monitor and enforce district policies regarding procurement of personal services contracts. 2. CEDA 84.027/173 Special education personal service contract procurement process The District paid $149,385 to a personal service contract with Special Education federal grant funds, which was not conducted through fair and open competition. However, the services procured were allowable under the federal program; therefore we will not question cost. The district has adequate controls in place to ensure the award of personal service contracts meet federal requirements and district policies. This non-compliance caused by the former Executive Director of Special Education was deemed an isolated incident, We recommend the District comply with federal procurement requirements and district policies.3. 4, 5. 6. Exit Items (Attachment A) 173 Special education supporting documents for taxi servic: ‘The District contracted two taxi cab vendors whose services were paid with both general education and federal special education grant funds. The district's Transportation Department is solely responsible for approving and coding invoices for taxi cab services and not the Department of Special Education. The district allocated costs of the services amongst several funding sources and charged 42 percent to the federal special education program. However, the district did not have any support for this allocation. Subsequent to the audit, the District was able to determine the actual costs for SPED students transported by taxi cab, Because actual cost exceeded the original allocation we are not questioning any program costs. ‘We recommend the District document their basis for allocated costs or charge actual taxi cab services costs to the federal special education program. CFDA 84.060 Indian Education unallowable costs ‘The District claimed 354 students totaling $74,380 in federal funds. Our testing found 25 forms should not have been claimed. We determined there were 17 missing forms and an additional eight forms the District would not be able to verify the enrollment status, resulting in total questioned costs of $5,252.75. FI 7 unrelated to program We tested controls and compliance for time and effort requirements for payroll charged to CFDA 84.367 Improving Teacher Quality State grants (Title II). There were 12 single-cost objective employees who were required to complete semi-annual time & effort certifications. We found one employee's certifications (two of the 24 semi-annual certifications for single- cost objective employees) were signed by someone unrelated to Title II. We found the District has controls in place sufficient to ensure payroll charged to the grant was allowable. ‘The District provided us documentation to demonstrate the employees worked on their respective grants. Therefore, we are not questioning these costs. ‘We recommend the District follow time and effort internal controls to ensure it meets federal requirements for documentation of all payroll costs charged to grants. CEDA 84.010 Title I schoolwide plan requirements Schoolwide plans must meet requirements which contain three core elements and five components. We found two schools missing one component each from their schoolwide plan. © Highland Park Elementary's plan was missing the component plan for assisting preschool children in transition to the schoolwide program. + Emerson Elementary's plan was missing the component plan for providing additional support to students experiencing difficulty We recommend the District document the review process for schoolwide plans to ensure each plan contains all element and component requirements.Exit Items (Attachment A) Accountability Audit 1. Selfinsurance During review of the self-insured vision benefit plan we found the District: ‘* Does not have a written claims processing plan to address financial plan requirements Washington Administrative Code (WAC) 200-1 10-090 Does not obtain Statement on Standards Attestation Engagements (SSAE) No. 16 service organization audit reports to ensure controls are in place with the contracted third party administrator ‘Uses the Joint Insurance Committee to make binding decisions affecting the vision plan, but do not have a board resolution authorizing the committee. We recommend the District develop a written claims processing plan to meet WAC requirements, obtain SSAE 16 reports from the third-party administrator, and adopt a board resolution authorizing the Joint Insurance Committee to make decisions regarding the vision plan. 2. Teacher education and experience (staff mix) We examined 15 certificated instructors’ credits and years of experience in which we found errors in six of the files. The errors caused a change in the reported LEAP factor in three files. We noted the following errors: + Years of experience were incorrectly reported for three files which caused LEAP errors and effect funding «Years of experience were incorrectly reported in five files * Academic credits were incorrectly reported in one file «Inservice credits were incorrectly reported in one file We recommend the District correct the errors identified in the employee files audited and continue monitoring files to ensure staff mix is reported accurately to OSPI. 3. Open Public Meetings Act We tested compliance with the Open Public Meetings Act (OPMA) for 18 board regular and special meetings, each holding an executive session. We found: + 14 meetings did not document whether the Board reconvened after ending the executive session in order to specify that no action was taken, and subsequently adjourn the meeting. This includes two regular meetings which adjourned prior to the executive session convening, ‘© One executive session in which the presiding officer did not announce when the executive session will conclude. + 13 executive sessions ran beyond the stated end time by 15 minutes or more without the presiding officer announcing an extension prior to exceeding the original stated time, ‘© Four meetings were not subject the OPMA as they are considered quasi-judicial and therefore, minutes were not applicable. © One executive session had a continuance the following day in which the special board meeting was not reconvened prior to the executive session beginning again.Exit Items (Attachment A) We recommended the District improve board protocols and minutes documentation to demonstrate that executive sessions are only held during regular meetings or special meetings and are not held separately. We also recommended the District only record minutes for meetings that meet OPMA requirements. As soon as we communicated our recommendations to the Board Office Manager, the District revised their meeting minute’s template to address these concems and implemented changes immediately. 4, Special education staff who coach During 2013-14 school year, three employees from Garfield High School's special education department provided coaching responsibilities to various sports at the school. Occasionally, these employees were released early from their regularly scheduled duties as the special education teacher or instructional aides during a school day to accompany the sport teams for a meet/competition. In such cases, substitute staff would cover their classes for the remainder of the day. We noted positions for all three employees were funded 100% by the state SPED funding (program 21). However, we could not find documentation to show the number of, hours they were away from their regular schedules. The hours spent on athletic activities at a school should not be funded from program 21, they should be charged to the general ‘education funds instead. We recommend the District: Ensure that Special Education Teachers and Instructional Assistants keep track of time when they are released ftom their regularly scheduled day to perform duties not related to special education including athletic coaching. + Make accounting adjustments to reallocate the funding source from special education to general education for the amount of time special education employees spent on athletic duties. ‘Technology project with public works component ‘We noted the District did not have procedures in place to identify the technology project with an installation component as a public works project. Public works projects are subject to prevailing wage requirements. The District did not include prevailing wage requirements into the Request for proposal or contract, We recommend the District implement procedures to determine when technology projects have a public works component. We also recommend the District assure those projects are in compliance with state prevailing wage requirements. 6. Custodial Services classified overtime We noted that classified employees of Custodial Services department were paid $1,118,312 for classified overtime during School Year 2014. In order to be eligible for overtime, custodial employees must work an eight hour regular shift before qualifying for overtime. Those employees are verbally restricted to work up to six hours after completing their regular shift. The overtime must be at the request and approved by an area or staff supervisor.Exit Items (Attachment A) We tested ten employees who in total were paid $244,626 for classified overtime and noted. instances where: * Four tested employees consistently worked three consecutive shifts exceeding 16 hours in a work day. + Employees moved their regular eight-hour shift without documenting how it was altered and then claimed overtime. + The instructions for completing and approving the extra time reporting form are inconsistent with District practices prescribed by management. We recommend the District implement and follow written policy and procedures for Classified Custodial Services overtime. We also recommend the district require documentation of and approvals for alterations of regular shift when overtime is claimed.