Topic:
STATE AID; MUNICIPALITIES; GRANTS; EDUCATION (GENERAL); SCHOOL FINANCE;
Location:
EDUCATION - FINANCE;
Scope:
Connecticut laws/regulations;

OLR Research Report


November 6, 2002

 

2002-R-0897

ACCOUNTABILITY FOR STATE EDUCATION GRANTS

By: Judith S. Lohman, Chief Analyst

You asked how the state ensures that towns and school districts spend state education grants for their intended purposes.

SUMMARY

Town and school district spending of state education grants is monitored in several ways. Not only do many education grants have specific reporting and accountability requirements written into their authorizing statutes but education grants are also subject to three general reporting and auditing laws.

State education grants are covered by the state Single Audit Act, which mandates annual financial and compliance audits for nonstate entities receiving state grants. These audits, which must conform to state requirements, are performed by independent certified public accountants hired by the grant recipients. Auditors must assess both the financial controls and legal and regulatory compliance of entities receiving state grants. Another law gives the Auditors of Public Accounts the authority to audit school district or municipal records related to state education grants. Finally, the State Department of Education (SDE) requires school districts to make extensive annual financial reports on their operations and expenditures. School superintendents must certify to the accuracy of these reports.

In addition to these general accountability requirements, many state education grants have explicit reporting and review requirements written into the grant authorization laws. These reviews and audits are performed by the State Department of Education.

GENERAL STATUTORY ACCOUNTABILITY REQUIREMENTS

There are several financial accountability statutes that apply to all state education grants to school districts and municipalities.

Single Audit Act

Municipalities and school districts receiving state education grants are subject to the state Single Audit Act, which requires municipalities and municipal entities, such as special districts and regional school districts, and nonprofits agencies that spend $100,000 or more in state grants in any year to be audited (CGS 4-230-4-236). Local entities that spend less than $100,000 per year in state grants are subject to program audits of the state-funded programs.

The audits must be performed by independent certified public accountants hired by the local entity. The law requires auditors to report on both the entity's compliance with state laws and regulations and on its internal financial controls. Audits must be filed annually with the Office of Policy and Management (OPM) and with the agency that gave the grant.

According to Ray Inzero, manager of the State Department of Education's (SDE) Internal Audit Division, each department that gives out grants must give OPM a so-called “compliance supplement” for each grant. The compliance supplement sets out grant-specific criteria for the auditors to assess during their annual audits. It is these compliance supplements that allow auditors to report on grantees' compliance with specific statutory requirements on how education grants must be spent. Although OPM is the lead agency for municipal single audits, reports on education grants are also sent to the SDE.

Auditors of Public Accounts

In addition to the Single Audit Act requirements, state law gives the Auditors of Public Accounts authority to examine the accounts and records of any town or local or regional board of education in connection with any state grant made by any state agency ( 10-260a).

Financial Data Reports

The law requires each local and regional board of education, through its school superintendent, and each regional educational service center, through its executive director, to submit an annual report of expenditures, receipts, and other financial statistics for each grant to the SDE by September 1 annually ( 10-227). This report (Form ED 141, copy attached) requires the superintendent or executive director to list grant expenditures in several categories and to certify its accuracy. According to Inzero, the information on the ED 141 allows SDE to monitor expenditures for each line item in a grant and to match expenditures to annual grant budgets that districts must submit prior to receiving a grant for each year (Form ED 114, copy enclosed).

ACCOUNTABILITY REQUIREMENTS FOR SPECIFIC GRANTS

In addition to the general audit and financial controls summarized above, many state education grants have additional statutory accountability requirements. These are summarized in Table 1.

Table 1: Statutory Accountability Requirements for Specific Education Grants

Grant

Requirement

Statute

Telecommunications Projects

Reports and financial statements as required by the SDE

If the education commissioner finds the grant is not used for purposes set out in the law, he can require repayment

10-4h

Connecticut Career Certificate

Reports and financial statements required by the SDE

If the education commissioner finds the grant is not used for purposes set out in the law, he can require repayment

10-20d

Exemplary Classroom Projects

Financial statement of expenditures and annual project report

10-66n

Charter Schools

Annual report on school's financial condition, including certified audit statement of all revenues and expenditures

10-66cc

Young Parents Program

Reports and financial statements as required by the SDE

If the education commissioner finds the grant is not used for purposes set out in the law, he can require repayment

10-74c

Special Education

Claims for reimbursement must be audited annually by certified public accountants hired by the State Board of Education (SDE)

10-76m

Dropout Prevention

Annual statement of expenditures, project report, and financial audit

If the commissioner finds the grant is not used for purposes set out in the law, he can require repayment

10-202f

Schools in Need of Improvement

Annual expenditure reports

Districts must refund any amounts unspent at the close of the program and any amounts not spent in accordance with the grant application

10-223c

School Technology

Annual expenditure reports

Districts must refund any amounts unspent at the close of the program and any amounts not spent in accordance with the grant application

10-262n

Transitional Districts

If the education commissioner finds the grant is not used for purposes set out in the law, he can require repayment

10-263c

Magnet School Capital Expenditures

Education commissioner must provide for a final audit of all project expenditures and may require repayment of ineligible expenditures

10-264h

Magnet School Transportation

Annual statement of expenditures

10-264i

Vocational Education Equipment

Expenditure report as required by SDE

10-265b

Early Reading Success

Expenditure reports as required

Districts must refund any amounts unspent at the close of the program and any amounts not spent in accordance with the grant application

10-265f

School Building Improvement

Expenditure reports as required

Districts must refund any amounts unspent at the close of the program and any amounts not spent in accordance with the grant application

10-265h

Summer School

Expenditure reports as required

Districts must refund any amounts unspent at the close of the program and any amounts not spent in accordance with the grant application

10-265m

Priority District

Annual project evaluation and financial audit

10-266r

Extended School Hours

Annual program report, statement of expenditures, and financial audit in conjunction with state single audit process

10-266u

School Breakfast Program

Annual expenditure report

If the education commissioner finds the grant is not used for purposes set out in the law, he can require repayment

10-266w

School Construction Grants and Interest Subsidy Payments

If commissioner determines a project has not met the approved conditions of the original application, the SBE may (1) withhold subsequent grants for the project until remedial action is taken or (2) may require repayment of the grant

10-287; 10-292j

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