Marlborough Public School District's Use of Certain American Recovery and Reinvestment Act Funds

This is a Massachusetts State Auditor report on Marlborough Public School District’s use of certain federal stimulus grants for Race to the Top and Education Jobs programs during August 10, 2010 through July 31, 2011.

“In accordance with Chapter 11, Section 12, of the General Laws, we have conducted an audit of certain activities of MPSD for the period August 10, 20101 through July 31, 2011.”

The audit checked whether the district spent the stimulus funds for the right purposes, followed program rules, and met accounting and reporting requirements.

“The objectives of our audit were to determine whether ARRA funds awarded to MPSD for its RTT and Education Jobs programs were used for their intended purposes and in compliance with program requirements, and to evaluate whether MPSD was complying with ARRA accounting and reporting requirements.”

The money came from federal stimulus programs, so the district needed safeguards to prevent loss, theft, misuse, and rule violations.

“Agencies charged with administering ARRA programs have a responsibility to establish an adequate system of internal controls that will provide reasonable assurance of compliance with applicable laws, rules, and regulations and will ensure that funds are safeguarded from loss, theft, and misuse.”

For residents, this report says how much stimulus money was awarded and spent, and that Education Jobs funds were tied to keeping or creating school jobs.

“In addition to reporting the uses of program funds, information reported to MRRO indicated that 3.6 FTE positions were either retained or created with the Education Jobs program as of June 30, 2011.”

The main problems were not that the money was spent on improper items, but that the district lacked ARRA-specific written controls and held some Race to the Top money too long before spending it.

“As a result, MPSD received some ARRA funding significantly in advance of its needs, which is contrary to federal regulations.”

The auditor recommended stronger ARRA-specific controls, returning excess federal cash when it is not immediately needed, and adjusting budgets so automatic advances do not create excess cash.

“MPSD should develop ARRA-specific internal controls and risk assessments to address the objectives and risks that affect compliance with ARRA regulations, performance and reporting requirements, fraud detection and prevention, and safeguarding of assets.”

The report matters because Marlborough was awarded $593,636 in ARRA funding for these programs, and the audit pushed the district to improve controls over public money.

“MRRO reported that the City of Marlborough was awarded $593,636 to fund these ARRA programs operated by MPSD.”

“Excess cash position” means the district had more federal money on hand than it needed right away, instead of drawing or receiving funds close to when it would spend them.

“In its guidance, USDOE defines excess cash balances as “funds maintained at the recipient/subrecipients’s level in excess of immediate (usually 3 days) needs.””