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

This is a Massachusetts State Auditor review of how Somerset Public School District handled certain federal stimulus education grants during part of 2010 and 2011.

“In accordance with Chapter 11, Section 12, of the General Laws, we have conducted an audit of certain activities of SPSD for the period August 10, 20101 through June 30, 2011.”

Auditors wanted to check whether the district spent the Race to the Top and Education Jobs money for the right purposes and followed ARRA accounting and reporting rules.

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

These were public federal stimulus funds, so the district needed safeguards to make sure the money was protected and used according to law.

“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, the report says the district received money meant to support education jobs and Race to the Top work, including keeping two full-time-equivalent positions.

“In addition to reporting the uses of program funds, information reported to MRRO indicated that two FTE positions were retained as of June 30, 2011.”

The main problem was not that auditors found misspending; it was that the district lacked a specific written control plan for ARRA funds.

“However, our audit found that SPSD had not developed an internal control plan addressing controls related to its ARRA activities.”

The auditor recommended that the district create ARRA-specific controls and risk assessments focused on compliance, reporting, fraud prevention, and protecting assets.

“SPSD should develop internal controls and risk assessments specific to ARRA as a way to address the objectives and risks of handling ARRA funds.”

The report’s significance is that even when spending appears allowable, weak grant-specific controls can leave public money more exposed to errors, misuse, or weak oversight.

“Without ARRA-specific internal controls that identify risks and ways to mitigate them, SPSD cannot ensure compliance with applicable laws, rules, and regulations or that ARRA funds are adequately protected from loss, theft, or misuse.”

ARRA means the 2009 federal stimulus law; RTT means Race to the Top, a federal education grant program; Education Jobs was a one-time program to save or create education jobs.

“The Education Jobs program is a one-time appropriation, which may be used through September 30, 2012, that USDOE awarded to save or create education jobs that provide educational and related services for early childhood, elementary, and secondary education.”