Federal audit results conducted by state auditors featuring six findings released this past Monday have Sunnyside School District officials readying for the appeals process.
The district was audited this past spring for the period of Sept. 1, 2006 through Aug. 31, 2007.
As a result of the audit findings, the district may find it has to pay back $45,582.
Auditors found the district's internal controls are inadequate in terms of ensuring compliance with state and federal procurement, child nutrition verification and Title I funding requirements.
The third finding, in which the school district may have to pay back Title I money, alleges the district doesn't have documentation that two teachers paid with Title I funding were instructing students in accordance with the funding, which, according to Assistant Superintendent Gary Vegar, means instruction in literacy and math.
Auditors said that only one of the seven periods per day was spent instructing Title I funded curriculum by one of the teachers.
The problem, Superintendent Rick Cole and Vegar say, is that one of the teachers was using science as a cross-through curriculum to teach reading and writing.
Vegar said, "The auditor's perception was that science did not apply in the Title I program write-up, but indeed it had."
Cole said when Vegar submitted the original application for funding, he had described how science would be used and OSPI approved. "Auditors disagreed," said Vegar.
The district will appeal this finding and, as Cole put it, "Make the case as to why the funds were used correctly."
For the second Title I teacher, auditors said there was no documentation supporting payroll.
The district now has time and effort logs, he added.
Following are the remaining five findings.
In the first finding, auditors claim the district did not follow the monthly bid process for the purchase of produce in the amount of $274,486.
State law requires that school districts seek quotes when purchased items exceed $40,000. Public bidding is required for purchases over $75,000.
Cole said that in the past, produce could be ordered on a monthly basis. When Bob Toomer, who retired at the end of the last school year, was the district's food service director, he signed the district up with a co-operative where produce was bid statewide and the lowest vendor was accepted.
"When that co-op ended, we went back to the system we always used: purchasing produce month to month," Cole said.
But, he said, the new regulation is that it must be bid up front at the beginning of the year.
The problem that presented, he said, is "we don't know in August how much to buy, nor can vendors give us a price that's going to last a whole year."
Cole said, "If you over-project your bidding, then your bill comes in lower, and (auditors) fine you for over-projection."
In the first finding, auditors also found the district could not provide evidence that quotes were obtained for professional service contracts of $4,950, $4,575 and $9,594 for migrant education. For these, Community Relations Coordinator Curtis Campbell said the previous standard was that a school district didn't have to bid for contracts of these amounts.
Auditors also found that the district paid $119,993 in Title II funds for professional development to what the district claimed to be a single source vendor, but the district failed to prove that. The vendor was University of Washington math trainers; there were 13 trainers.
The district also could not provide evidence that quotes were obtained for another professional service contract of $13,150.
The second finding has to do with the nutrition program and applications for free and reduced lunches. According to auditors, the district was supposed to select 15 reduced lunch applicants for verification, but only 14 were selected. Five of the 14 reviews were not done in accordance with state and federal regulations, auditors said.
Also mentioned in this finding is that the district used a computer to select the 14 applications, but could not prove that it had internal controls to ensure the computer was working using the appropriate sampling criteria.
The district was also dinged for not having an independent review of the applications.
"We've had school nutrition paperwork issues for maybe three years," said Cole. "I think the new food services director is going to be great with the paperwork, it's one of his strengths that he brings to the table."
The fourth finding had to do with the district's lack of monitoring when it came to setting aside Title I funding for professional education. The district apparently didn't monitor program costs to ensure funds were spent accordingly. Staff did, however, calculate the amount during the audit process.
Vegar said auditors wanted a monthly tracking system in place and Cole said the auditors "didn't like how we kept track of it."
The district now has an account code structure to track professional development expenditures.
Findings five and six
Finding number five centers around Title I funding and how that money is spent in terms of identifying students in need.
According to auditors, students can be identified by a combination of grades, standardized test scores and teacher recommendations. Said Vegar, "We want it ranked by greatest need."
The grant director and building principals now use WASL scores to determine eligible students.
In the sixth finding, auditors maintain that the district didn't properly allocate its Title I funding among the school buildings. Auditors said the money needed to be allocated based on a poverty measure found through free and reduced lunch applications. The district allocated the funding based on academic need.
According to auditors, PRIDE High School's correct allocated amount should have been $39,168. But the district allocated $128,213. Sunnyside High School, on the other hand, should have been allocated $412,711 according to auditors, but the district allocated $138,563.
To correct the problem, the district now allocates Title I funding to each building based on the free and reduced lunches as a poverty measure.
The district must now pay $15,000 to cover the cost of the audit.
School district business manager Angela Watts said that the appeals process can take up to six months. The district will appeal to OSPI's audit resolution team.
When Cole meets with OSPI regarding the appeal, he will also seek clarity regarding findings five and six.
In the situation where there is a possible $45,582 payback, OSPI will make a recommendation to the federal government as to whether or not the school district will have to do so.