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Ken StaTE OF CONNECTICUT > Ch DEPARTMENT OF EDUCATION Revised Jly 8, 2019 Dr. Matthew Conway Superintendent of Schools Derby Public Schools aS Fifth street Re: Boat of Education Appropriations Connecticut State Department of Education ~Allance District Grant Funds ear Dr. Convoy The Connecticut State Department of Education (CSDE) Oficeof internal Audit conducted a review of ‘the dlstrit’s documentation In support ofthe Board of ducation’s (BOE) appropriation and expenditures for FY 2017-2018 and FY 2018-2019. ur review algo included the receipt and reporting of OE grant funds including the CSDE's Alliance District grant for FY 2017-2018 Based on our review, we noted the following 2017-2018 BOE = Operating & Grant Budgets The BOE appropriation for FY 2017-2018, which was approved by the City of Derby's Board of ‘Apportionment & Taration on May 30, 2017, was $18,389,806. Chy transfers of funds from the City's bank account to the 8's bank account occurred during each menth ofthe fiscal year, covered BOE operating, and grant elated expenses. The BOE also drew down grant funds from CSDE during the entire fiscal year, grant funds were deposited into the C's bank account, ity transfers of grant funds from the City’s bank account to the 2OE’s bank account occurred primarily during the second half ofthe fiscal year, covered HOE operating, and grant elated expenses, OIA could not cstnguish grant funds from operating funds based on transfers from the City tothe BOE bank account n reviewing the BOE bank account statements, because monies were combined into one bank acount. OIA reed onthe [OE's general edger forthe operating budget and grant budget details of expenditures. ‘The 6OE's general ledger fr thelr operating budget indeates that $18 368,865.33 was expended during FY 2017-2018 leaving a fund balance of $20,940.67. The grant fund budget for FY 2017-2018 was $5,016,650.76. The BOE’ grant fund general ledger indicates that $4,524,786.78 was expended during FY 2017-2018 leaving a carry-over balance of $491,863.98. OlAalso noted thatthe 2017-2018 Alliance bistnct grant tunas of $106,690.00 were accounted for within te HOE's 2017-2018 rant Tune general ledger. lance District grant expenditures totaled $956,923.67 leaving a rant carry-over amount of| $79,778.23 We blve that monies appropiate tothe BOE bythe Board of Apportionment & Taxation fr 20172018 fr $18,389,806 was transferred from te i's bank account tothe BOE bank account rove ‘expended by the BOE. In adaltion, total grant funds of $4,524,786.78 were transfered from the y's bankacount to the BOE's bank account and were expended by the BOE ox 2219 » Hafan Connecticut 06145 ‘he EglOppranty Epler sour Education Appropratons sera 018 2017-2018 Alliance District grant fund of $956,923.67 were expended by the BOE and were reported as ‘uch on the BOF’ EDLA1 expenditure report submitted to CSDE. 2017-2018 and 20182019 Gty Budge ‘The City’s budget overestimated CSDE grant revenues inthe 2017-2018 fiscal year forthe Education ‘Cost sharing grant and the CSDE Aliance District grant. Revenue line tem "Education Block grant” included "ECS grant and Alliance District grant estimates" and revenue line Item “ECS Alliance grant” included “ECS Allance Distt grant estimate". The overestimate of grant revenues caused a shortfall in ‘ity revenues for 2017-2018 but dl not affect the BOE operating budget/expenditures nor ther grant related budget/expenditures for 2017-2018. We note that the City overestimated CSDE grant revenues for FY 2018-2019 as wel, Corrective Action Plan ity personnel has corrected thelr udget revenue process so that estimated Aliance District grant funds wll not be reported twice for budget purposes. In addition, the BOE is currently working on setting up a separate bank account for grant purposes. When the BOE request gant funds from CSDE brother agencies, rant funds wll be deposited into the Cit bank acount and then transferred tothe ‘OE’: grant bank account. Grant funds and operating funds will be maintained separately inthe BOE's bank accounts and transactions will be recorded in the HOE's general ledger system as they occu. \We appreciate the cooperation extended by the BOE and City during our review process. you have any questions, please contact me at (860) 712-6536. Sheer, Supervising Accounts Examiner Office of internal Audit Ne xc: Desi Nesmith Interim Commissioner, CSDE Kathy Oemsey, Chief Financial Officer, CSDE Justin Cleary, Assoclate Accounts Examiner, CSDE kevin Chambers, Consultant CSDE Salvatore Coppola, Finance Director, Clty of Derby Mark az, Gusiness Manager, Derby Public Schools Tom Markoski, Accounting Career Trainee, CSOE eth MeLverty, Treasurer, City of Derby