Randolph Public School District's Use of Certain American Recovery and Reinvestment Act Funds
December 12, 2012 · Randolph Public School District · Read the full official report (PDF) ↗
Published December 12, 2012 Audit covers August 10, 2010 – June 30, 2011 Under Suzanne M. Bump · 2011–2023
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“Based on our audit we have concluded that, except as reported in the Audit Findings section of this report, for the period August 10, 2010 through June 30, 2011, RPSD maintained adequate management controls and complied with applicable laws, rules, and regulations for the areas tested.”
Read the plain-English breakdown
This is a Massachusetts State Auditor report on Randolph Public School District’s use of certain federal stimulus education funds from the Race to the Top and Education Jobs programs.
“The objectives of our audit were to determine whether American Recovery and Reinvestment Act of 2009 (ARRA) funds awarded to RPSD for Race to the Top (RTT) and Education Jobs programs were used for their intended purposes and in compliance with program requirements, and to evaluate whether RPSD was complying with ARRA accounting and reporting requirements.”
The audit checked whether Randolph used the ARRA money for the right purposes and followed accounting, reporting, and program rules.
“The objectives of our audit were to determine whether ARRA funds awarded to RPSD for its RTT and Education Jobs programs were used for their intended purposes and in compliance with program requirements, and to evaluate whether RPSD was complying with ARRA accounting and reporting requirements.”
For residents, the point is basic protection of public money: the auditor wanted the district to reduce the risk that stimulus funds could be lost, misused, or spent outside the rules.
“Without ARRA-specific internal controls that identify risks and ways to mitigate them, RPSD cannot ensure compliance with applicable laws, rules, and regulations or that ARRA funds are adequately protected from loss, theft, or misuse.”
The main problems were not that auditors found misspending, but that Randolph lacked formal ARRA-specific controls and held some federal funds longer than allowed before spending them.
“As a result, RPSD received some ARRA funding significantly in advance of its needs, which is contrary to federal guidelines.”
The auditor recommended that Randolph create ARRA-specific written controls, return federal money it does not immediately need, and update budgets when planned spending changes.
“RPSD 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.”
“Excess cash” means federal money sitting with the district beyond what it needs right away, usually beyond about three days.
“In its guidance, USDOE defines excess cash balances as “funds maintained at the recipient/subrecipient’s level in excess of immediate (usually 3 days) needs.””
2 figure(s) pending source verification - not shown
What the Auditor checked
- Complied Determine whether ARRA funds awarded to RPSD for Race to the Top and Education Jobs programs were used for their intended purposes and in compliance with program requirements.
- Partially Evaluate whether RPSD was complying with ARRA accounting and reporting requirements.
What the Auditor found
Why it matters: Without ARRA-specific internal controls that identify risks and ways to mitigate them, RPSD could not ensure compliance with applicable requirements or adequately protect ARRA funds from loss, theft, or misuse.
Standard: ARRA guidance issued by the U.S. Office of Management and Budget, the U.S. Department of Education, and the Office of the State Comptroller; OSC ARRA Internal Control Guidance. ( Chapter 11, Section 12, of the Massachusetts General Laws; ARRA Internal Control Guidance )
1 recommendation
- RPSD should develop internal controls and risk assessments specific to ARRA to address objectives and risks affecting compliance, performance and reporting, fraud detection and prevention, and safeguarding assets.agency: disagreed
Agency response & Auditor reply
Agency: "While we do not have a process documented, we had numerous examples of how the system works."
Auditor: "Documentation is a key component of internal control."
Why it matters: RPSD was in an excess cash position, contrary to federal cash-management guidelines requiring advances to be limited to immediate cash needs.
Standard: 34 Code of Federal Regulations 80.21 and Education Department General Administrative Regulations cash-advance requirements. ( 34 Code of Federal Regulations 80.21 )
1 recommendation
- RPSD should amend its line-item budget when it determines originally budgeted program funds will not be spent.agency: disagreed
Agency response & Auditor reply
Agency: "We believe this is an unsupported finding as the state had not established a mechanism to return funds prior to the end of the fiscal year."
Auditor: "RPSD has a responsibility to manage its advances in a manner that is compliant with federal regulations."