Maryland State Department of Education

Transcription

1 Maryland State Department of Education Report Dated June 14, 2006 Presentation to Maryland General Assembly Senate Budget and Taxation Committee Education, Business and Administration Subcommittee Brian S. Tanen, CPA, CFE February 8, 2007

2 Audit Overview MSDE responsibilities include: Setting school performance goals and monitoring school achievement Certifying teachers and principals Distributing financial aid Providing services to people with disabilities. F Y 2005 expenditures totaled approximately $4.7 billion, the majority of which related to grants awarded to local education agencies. June 14, 2006 audit report included 20 findings, 6 of which were repeated from the preceding audit report. OLA s January 18, 2007 report on Statewide Review of Budget Closeout Transactions for FY 2006 provided an updated status on two issues addressed in the June 2006 report. Maryland State Department of Education Page 2

3 Key Audit Issues Assurance was lacking that individuals convicted of qualifying crimes were prevented from working in schools. Procedures were inadequate to ensure that local school systems complied with critical student transportation safety requirements. MSDE did not sufficiently monitor and enforce teacher certification requirements. Federal reimbursement of $21 million was not sufficiently pursued resulting in the potential inability to recover the majority of the funds. Certain grants were not effectively monitored. Federal audit disallowances totaling $19.9 million remain unresolved. Maryland State Department of Education Page 3

4 Hiring of Individuals with Criminal Backgrounds MSDE did not revoke the teacher certificates of 11 convicted sex offenders, 7 of which were never reported to MSDE by the respective LEAs. MSDE did not obtain the results of criminal background investigations for teacher certification applications and was not notified of subsequent criminal activity. Current policies and procedures do not prohibit public schools from hiring individuals convicted of qualifying crimes for non-certified positions. MSDE did not adequately ensure nonpublic schools complied with criminal background check requirements and did not always follow up on reported instances of noncompliance. Maryland State Department of Education Page 4

5 Transportation Safety Requirements MSDE did not ensure LEAs prohibited individuals who failed a drug/alcohol test from driving a school bus. For example, MSDE did not compare drivers on its drug/alcohol database with lists of active school bus drivers maintained by the LEAs. MSDE did not monitor the results of school bus safety inspections. For example, one LEA had tags suspended on approximately 350 school vehicles due to major defects noted in the inspections. Maryland State Department of Education Page 5

6 Teacher Certification Requirements MSDE did not sufficiently follow-up on 4,424 teachers working in Maryland public schools who did not hold current valid Maryland teaching certificates. MSDE did not adequately monitor compliance with State regulations that generally require teachers to teach within their areas of certification. Independent verifications were not performed to ensure that teacher certificates were issued only to qualified applicants. Maryland State Department of Education Page 6

7 Federal Fund Recovery MSDE did not pursue reimbursement for approximately $21 million in federal fund expenditures relating to the Temporary Assistance to Needy Families (TANF) program incurred during FY General funds were used during this time period to finance these expenditures. Even if the federal funds are recovered, at a minimum, MSDE lost interest income of approximately $1.5 million because of recovery delays. As of January 2007, a portion had been recovered, but $15.4 million remains outstanding and may not be recoverable because the federal funds may no longer be available. Maryland State Department of Education Page 7

8 Grants Department of Legislative Services MSDE did not adequately control and account for certain grant funds. For 4 grant programs with expenditures totaling $31 million, MSDE did not verify the amounts reported by the grantees. For 8 completed grants, with unspent grant funds totaling $2.9 million, MSDE could not document if it had invoiced the grantees for the unspent funds or if amounts due from grantees were ever received. For 6 grants totaling $2.1 million, required annual reports of grant expenditures were either not received, or were not sufficiently detailed to compare to related budgets. Maryland State Department of Education Page 8

9 Grants (continued) MSDE did not adequately monitor a vocational education grant totaling $1.5 million. The grantee continuously failed to meet goals and expectations (e.g., obtaining funding from non-state sources) and continued to bill MSDE even when no children were being served. We identified certain related party transactions and questionable grant expenditures and referred these matters to the Attorney General s Criminal Investigations Division. For example, a contract totaling $44,000 for annual security services appeared questionable and the same services in previous years only cost about $4,000. Maryland State Department of Education Page 9

10 Federal Audit Disallowances Federal sanctions totaling $19.9 million remain unresolved. A March 2003 federal audit report requested a refund of Medicaid funds totaling $19.9 million claimed in FY 2000 for health-related services provided in school settings. The sanctions were appealed in July 2005 and a final determination is expected in In August 2005, a federal follow-up audit was initiated. Potential sanctions are expected to increase. MSDE management maintains that any liability will be recovered from Local Education Agencies. Maryland State Department of Education Page 10

11 Conclusion MSDE should establish procedures and controls to ensure that: Individuals convicted of qualifying crimes are not working in Maryland schools. Local school systems comply with critical student transportation safety requirements. Local school systems comply with teacher certification requirements. MSDE should continue to pursue recovery of the aforementioned $15.4 million in federal funds and, in the future, ensure that federal funds are recovered in a timely manner. MSDE should monitor grant activity to ensure the proper disposition of grant funds. Maryland State Department of Education Page 11