CONTACT:  Sarah Potter
Communications Coordinator


Vol. 46, No. 41
May 17, 2012


Federal Officials Confirm ARRA Auditing Procedures at the Department of Elementary and Secondary Education

Department's monitoring of funds meets federal guidelines


The U.S. Department of Education has confirmed that the Department of Elementary and Secondary Education properly conducted the auditing of federal funds distributed to school districts through the American Reinvestment and Recovery Act (ARRA) during the 2009-2010 fiscal year.

“We are pleased that the U.S. Department of Education has recognized the good work of our staff and our monitoring efforts,” said Commissioner of Education Chris L. Nicastro.

In 2011 and 2012, Missouri state audits recommended that the state education department develop additional monitoring procedures, including an increase in the number of visits to the schools that receive the funds, to ensure that the expenditure of specific ARRA funds is in compliance with federal guidelines.

The Department disagreed with the state auditor's recommendations, because the Department routinely audits the use of all federal funds distributed to school districts across the state. Department officials noted that the federal government requires ARRA funds to be handled similarly to other federal education funding and has not recommended changes in the way the funds are monitored.

“The Assistant Secretary does not sustain the auditors’ finding and recommendation,” wrote Alexa Posny, Ph.D., assistant secretary for the U.S. Department of Education, in a letter dated April 23, 2012.

The state education department's monitoring procedures include conducting a risk assessment at the end of each fiscal year for school districts that are most at risk, and department officials visit those districts from October through December each year. All Missouri school districts are on a five-year schedule to receive an on-site monitoring visit. The Department added a step to its on-site and desk review procedures to ensure adequate coverage of ARRA expenditures.

The Department did agree with a recommendation from the state auditor that it needed  better controls to ensure the timely and accurate reporting of section 1512 data, which addresses the use of certain ARRA funds. State education officials took corrective action to address the auditors’ concerns, and federal officials indicated they were satisfied with that action.

Federal officials also said there was no basis to require the Department to have a formal written plan for carrying out its section 1512 reporting responsibilities. The Department did develop and disseminate guidance for ARRA reporting to school districts.

“We conclude that DESE has taken sufficient steps to ensure an accurate and complete report of section 1512 data and require no further corrective action,” wrote Dr. Posny.

The Department is awaiting additional, similar letters regarding its handling of other types of ARRA funding.