Winchendon School District's Use of Certain American Recovery and Reinvestment Act Funds
December 17, 2012 · Winchendon School District · Read the full official report (PDF) ↗
Published December 17, 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, WPSD 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 review of how Winchendon Public School District used certain federal stimulus education funds 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 WPSD for the period August 10, 20101 through June 30, 2011.”
Auditors wanted to see whether the district used Race to the Top and Education Jobs 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 WPSD for its RTT and Education Jobs programs were used for their intended purposes and in compliance with program requirements, and to evaluate whether WPSD was complying with ARRA accounting and reporting requirements.”
Federal stimulus money came with extra expectations for oversight, reporting, and protection against loss, theft, misuse, and fraud.
“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 and taxpayers, the report is about whether education stimulus dollars for local schools were tracked, spent properly, and connected to jobs and school services.
“In addition to reporting the uses of program funds, information reported to MRRO indicated that .93 FTE positions were either created or retained with the RTT program and 15 FTE positions were retained with the Education Jobs program as of June 30, 2011.”
The main problems were not that auditors found the money was spent on unallowable items, but that the district lacked ARRA-specific controls and held some funds longer than federal cash-management rules allowed.
“As a result, WPSD received some ARRA funding significantly in advance of its needs, which is contrary to federal guidelines.”
The auditor recommended that the district create ARRA-specific controls, return excess federal money when it is not immediately needed, and adjust budgets when planned spending changes.
“WPSD indicated that it is making every effort to return excess funds to the funding source (in this case, DESE) as soon as practical in order to avoid being in an excess cash position.”
ARRA means the federal stimulus law; DESE is the state education department; RTT is Race to the Top; Education Jobs was funding to save or create education jobs; internal controls are the rules and checks that help prevent mistakes, misuse, or poor tracking of money.
“During our audit period and in addition to other grant awards, WPSD received American Recovery and Reinvestment Act of 2009 (ARRA) grants from the Massachusetts Department of Elementary and Secondary Education under the Race to the Top (RTT) and Education Jobs programs.”
5 figure(s) pending source verification - not shown
What the Auditor checked
- Partially Determine whether ARRA funds awarded to WPSD for Race to the Top and Education Jobs programs were used for their intended purposes and in compliance with program requirements.
- Partially Evaluate whether WPSD was complying with ARRA accounting and reporting requirements.
What the Auditor found
Why it matters: Without ARRA-specific internal controls and risk assessments, WPSD could not ensure compliance with applicable requirements or protect ARRA funds from loss, theft, or misuse.
Standard: ARRA guidance from OMB, USDOE, and the Office of the State Comptroller emphasized the need for internal controls over ARRA funds. ( ARRA Internal Control Guidance )
1 recommendation
- Develop internal controls and risk assessments specific to ARRA that address compliance, performance and reporting requirements, fraud detection and prevention, and safeguarding assets.
Agency response & Auditor reply
Agency: "In our processes to pay bills and staff, we have multiple layers of oversight to ensure compliance with state laws and regulations."
Auditor: "Accordingly, we again recommend that WPSD develop an ARRA-specific internal control system to ensure that ARRA awards and expenditures are accounted for and reported in a timely, accurate, and appropriate manner."
Why it matters: Holding excess federal cash violated federal cash management requirements intended to minimize the time between receipt and disbursement of funds.
Standard: 34 Code of Federal Regulations 80.21 requires payment methods and procedures to minimize the time between transfer and disbursement of grant funds. ( 34 Code of Federal Regulations 80.21 )
2 recommendations
- Ensure WPSD is not in an excess cash position and return excess federal funds to DESE when more funds are on hand than immediately needed.
- Amend the line item budget when originally budgeted program funds will not be spent to prevent advances that create excess cash.
Agency response & Auditor reply
Agency: "While I understand the State’s concern that we were holding excess funds, it was not our intent."
Auditor: "Consequently, we again recommend that WPSD implement our recommendations relative to this matter."