Stanislaus County

STANISLAUS COUNTY OFFICE OF EDUCATION Final Review Report AUDIT RESOLUTION PROCESS Fiscal Year 2021-22 and Fiscal Year 2022-23 M ALIA M. C OHEN C S C ALIFORNIA TATE ONTROLLER December 2025 S25-COE-9001 STATE CONTROLLER’S OFFICE | DIVISION OF AUDITS Post Office Box 942850 | Sacramento, CA 94250 Sacramento Office: 3301 C Street, Suite 700 | Sacramento, CA 95816 | 916-324-8907 Monterey Park Office: 901 Corporate Center Drive, Suite 200 | Monterey Park, CA 91754 | 323-981-6802 www.sco.ca.gov MALIA M. COHEN CALIFORNIA STATE CONTROLLER December 30, 2025 The Honorable Scott Kuykendall, Superintendent Stanislaus County Office of Education 1100 H Street Modesto, CA 95354 Dear Superintendent Kuykendall: The State Controller’s Office reviewed the Stanislaus County Office of Education’s (COE) audit resolution process for local education agency exceptions noted in the annual audit reports. The review covered fiscal year (FY) 2021-22 and FY 2022-23. Our review found that the Stanislaus COE followed its audit resolution process for FY 2021-22 and FY 2022-23. However, the audit resolution process was deficient because the Stanislaus COE did not follow up on three attendance-related audit exceptions for one local education agency and did not request that the local education agency submit the appropriate reporting forms, as required by Education Code section 41020(k)(1). Except for the deficiencies noted in this report, the Stanislaus COE complied with Education Code section 41020. If you have any questions regarding this report, please contact Joel James, Chief, Financial Audits Bureau, by telephone at 916-323-1573 or email at jjames@sco.ca.gov. Thank you. Sincerely, Original signed by Kimberly A. Tarvin, CPA Chief, Division of Audits MAILING ADDRESS P.O. Box 942850, Sacramento, CA 94250 SACRAMENTO 3301 C Street, Suite 700, Sacramento, CA 95816 | 916.324.8907 LOS ANGELES 901 Corporate Center Drive, Suite 200, Monterey Park, CA 91754 | 323.981.6802 Mr. Scott Kuykendall December 30, 2025 Page 2 of 2 Copy: Julie Betschart, Deputy Superintendent Business Services Stanislaus County Office of Education Kathleen Young, Director II Oversight External Business Services Stanislaus County Office of Education Tami Pierson, Director School Fiscal Services Division California Department of Education Keith Smith, Administrator School Fiscal Services Division California Department of Education Jessica Holmes, Program Budget Manager Education Systems Unit California Department of Finance MAILING ADDRESS P.O. Box 942850, Sacramento, CA 94250 SACRAMENTO 3301 C Street, Suite 700, Sacramento, CA 95816 | 916.324.8907 LOS ANGELES 901 Corporate Center Drive, Suite 200, Monterey Park, CA 91754 | 323.981.6802 Office of the State Controller | Stanislaus County Office of Education Audit Resolution Process Final Review Report December 2025 CONTENTS SUMMARY 1 BACKGROUND 1 REVIEW AUTHORITY 3 OBJECTIVE, SCOPE, AND METHODOLOGY 3 CONCLUSION 4 VIEWS OF RESPONSIBLE OFFICIALS 5 RESTRICTED USE 5 FINDING AND RECOMMENDATION 6 ATTACHMENT—STANISLAUS COUNTY OFFICE OF EDUCATION’S RESPONSE TO DRAFT REVIEW REPORT 8 Office of the State Controller | Stanislaus County Office of Education Audit Resolution Process Final Review Report December 2025 SUMMARY The State Controller’s Office (SCO) reviewed the Stanislaus County Office of Education’s (COE) audit resolution process for local education agency (LEA) exceptions noted in the annual audit reports for fiscal year (FY) 2021-22 and FY 2022-23. Our review found that the Stanislaus COE followed its audit resolution process for FY 2021-22 and FY 2022-23. However, the audit resolution process was deficient because the Stanislaus COE did not follow up on three attendance-related audit exceptions for one LEA and did not request that the LEA submit the appropriate reporting forms, as required by Education Code (EC) section 41020(k)(1). Except for the deficiencies noted in this report, the Stanislaus COE complied with EC section 41020. BACKGROUND EC section 41020(n) directs the SCO to require that auditors categorize audit exceptions in the audit report in such a manner that both the county superintendent of schools and the State Superintendent of Public Instruction (SSPI) can discern which exceptions it is their responsibility to ensure that the LEAs correct. In addition, EC section 41020(n) requires the SCO to annually select a sample of county superintendents of schools for which the SCO will perform a follow-up review of the audit resolution process. Results of these reviews will be reported to the SSPI and the county superintendents of the schools that were reviewed. The Stanislaus COE provides coordination of educational programs, and professional and financial supervision for 24 LEAs under its jurisdiction. In addition, the county superintendent of schools maintains special schools and programs countywide, independent of the LEAs. -1- Office of the State Controller | Stanislaus County Office of Education Audit Resolution Process Final Review Report December 2025 County superintendents of schools are required to do the following: • Review, for each of their school districts, audit exceptions relating to attendance, inventory of equipment, internal control, and any miscellaneous items, and determine whether the findings have been corrected or an acceptable plan of correction has been developed (EC section 41020[i][1]); • Review audit exceptions related to the use of program funds for instructional materials, teacher misassignments, and school accountability report cards. The county superintendents must also determine whether the exceptions have been corrected or an acceptable plan of correction has been developed (EC section 41020[i][2]); • Review audit exceptions related to attendance, inventory of equipment, internal control, and other miscellaneous exceptions. Attendance exceptions or issues must include those related to local control funding formula allocations pursuant to EC section 42238.02, as implemented by EC section 42238.03, and independent study (EC section 41020[j][1]); • Notify the LEA, and request that the governing board of the LEA provide to the county superintendent of schools a description of the correction or plan of correction by March 15 of the subsequent year (EC section 41020[j][2]); • Review the description of the correction or plan of correction and determine its adequacy and, if the LEA’s response was not adequate, require the LEA to resubmit that portion of its response that is inadequate (EC section 41020[j][3]); • By May 15 of the subsequent year, certify to the SSPI and the SCO that the county has reviewed all applicable exceptions, and state that all exceptions have been corrected, or that an acceptable plan for correction has been submitted by the LEA to the county superintendent, except as noted in the certification. In addition, identify by LEA any attendance-related exceptions or exceptions involving state funds, and require the LEA to submit the appropriate reporting forms to the SSPI for processing (EC section 41020[k]); -2- Office of the State Controller | Stanislaus County Office of Education Audit Resolution Process Final Review Report December 2025 • Review LEAs’ unresolved prior-year audit exceptions when the California Department of Education (CDE) defers to the county (EC section 41020[l]); and • Adjust subsequent local property tax requirements to correct audit exceptions relating to LEA tax rates and tax revenues (EC section 41020[o]). REVIEW AUTHORITY We conducted this review in accordance with EC section 41020(n), which authorizes the SCO to facilitate correction of the exceptions identified by audits issued pursuant to this section. In addition, Government Code section 12410 provides the SCO with general authority to audit the disbursement of state money for correctness, legality, and sufficient provisions of law for payment. OBJECTIVE, SCOPE, AND METHODOLOGY The objective of our review was limited to determining whether the Stanislaus COE followed its audit resolution process for FY 2021-22 and FY 2022-23 for resolving LEA audit exceptions in a manner consistent with EC section 41020. Our review did not include an evaluation of the sufficiency of the action taken by the LEA and the Stanislaus COE to address each exception, nor did it assess the degree to which each exception was addressed. To achieve our objective, we performed the following procedures: • We verified that the Stanislaus COE addressed all attendance, inventory of equipment, internal control, and miscellaneous exceptions. In addition, we verified that the Stanislaus COE addressed any findings on program funds for instructional materials, teacher misassignments, and school accountability report cards. However, with respect to exceptions based on sample items, our review did not include a determination of whether -3- Office of the State Controller | Stanislaus County Office of Education Audit Resolution Process Final Review Report December 2025 the exception results were properly quantified and addressed at a districtwide or countywide level. • We verified that the Stanislaus COE notified LEAs that they must submit completed corrective action forms to the Stanislaus COE by March 15, 2023, and March 15, 2024, for FY 2021-22 and FY 2022-23, respectively. Our review did not include an assessment of the LEAs’ progress in taking corrective action. • We verified that the Stanislaus COE required the LEAs to submit the appropriate reporting forms to the SSPI for any attendance-related exceptions that affected state funding. • We reviewed the letters of certification due on May 15, 2023, and May 15, 2024, that the Stanislaus COE sent to the SSPI and the SCO regarding any resolved and unresolved audit exceptions. • We verified that the Stanislaus COE followed up with unresolved prior-year audit exceptions that the SSPI had required the Stanislaus COE to conduct. • We verified that the Stanislaus COE adjusted subsequent local property tax requirements to correct audit exceptions related to LEA tax rates and tax revenues. CONCLUSION Our review found that the Stanislaus COE followed its audit resolution process for FY 2021-22 and FY 2022-23. However, the audit resolution process was deficient because the Stanislaus COE did not follow up on three attendance-related audit exceptions for one LEA and did not request that the LEA submit the appropriate reporting forms, as required by EC section 41020(k)(1). Except for the deficiencies noted in this report, the Stanislaus COE complied with EC section 41020. We made no additional determination regarding the Stanislaus COE’s audit resolution process beyond the scope of the review outlined in this report. -4- Office of the State Controller | Stanislaus County Office of Education Audit Resolution Process Final Review Report December 2025 VIEWS OF RESPONSIBLE OFFICIALS We issued a draft review report on August 14, 2025. The Stanislaus COE’s representative responded by letter dated September 22, 2025. The Stanislaus COE agreed with the review results. This final review report includes the Stanislaus COE’s response as an attachment. RESTRICTED USE This report is solely for the information and use of the Stanislaus COE, the CDE, the California Department of Finance, and the SCO; it is not intended to be, and should not be, used by anyone other than these specified parties. This restriction is not intended to limit distribution of this report, which is a matter of public record and is available on the SCO website at www.sco.ca.gov. Original signed by Kimberly A. Tarvin, CPA Chief, Division of Audits December 30, 2025 -5- Office of the State Controller | Stanislaus County Office of Education Audit Resolution Process Final Review Report December 2025 FINDING AND RECOMMENDATION Finding—Deficiencies in the Review of Local Educational Agency Audit Exceptions In our review of the Stanislaus COE’s audit resolution process for LEA audit exceptions noted in the annual audit reports for FY 2021-22 and FY 2022-23, we identified deficiencies in the process to resolve and certify attendance-related audit exceptions. We reviewed 37 LEA audit exceptions for FY 2021-22 and FY 2022-23. Of the 37 audit exceptions, we found three instances in which the Stanislaus COE did not follow up with one LEA and request that it submit the appropriate reporting form to correct the audit exceptions related to units of average daily attendance noted in the LEA’s annual audit reports for FY 2021-22 and FY 2022-23. Additionally, the Stanislaus COE certified in the Certification of Corrective Action Resolution of 2022-23 Audit Findings submitted to the SCO on May 15, 2024, that it had followed up with this LEA to submit appropriate reporting forms to resolve attendance-related audit exceptions. However, our review found that the Stanislaus COE did not request the revised annual attendance reports from the LEA to resolve the exceptions. The Stanislaus COE indicated that the three instances were an unintentional oversight, and that it has made changes to its review process to ensure timely corrections. EC section 41020(i)(1) states: Commencing with the 2002–03 audit of local educational agencies pursuant to this section and subdivision (d) of Section 41320.1, each county superintendent of schools shall be responsible for reviewing the audit exceptions contained in an audit of a local educational agency under their jurisdiction related to attendance, inventory of equipment, internal control, and any miscellaneous items, and determining whether the exceptions have been either corrected or an acceptable plan of correction has been developed. -6- Office of the State Controller | Stanislaus County Office of Education Audit Resolution Process Final Review Report December 2025 EC section 41020(k)(1) states: Each county superintendent of schools shall certify to the Superintendent and the Controller, not later than May 15, that the county superintendent of schools’ staff has reviewed all audits of local educational agencies under the county superintendent of schools’ jurisdiction for the prior fiscal year, that all exceptions that the county superintendent was required to review were reviewed, and that all of those exceptions, except as otherwise noted in the certification, have been corrected by the local educational agency or that an acceptable plan of correction has been submitted to the county superintendent of schools. In addition, the county superintendent shall identify, by local educational agency, any attendance-related audit exception or exceptions involving state funds, and require the local educational agency to which the audit exceptions were directed to submit appropriate reporting forms for processing by the Superintendent. Recommendation We recommend that the Stanislaus COE: • Comply with EC section 41020 by requiring LEAs to submit appropriate reporting forms for all attendance-related audit exceptions; and • Review the Certification of Corrective Action Resolution for accuracy and completeness before submitting to the SCO and the CDE. -7- Office of the State Controller | Stanislaus County Office of Education Audit Resolution Process Final Review Report December 2025 ATTACHMENT—STANISLAUS COUNTY OFFICE OF EDUCATION’S RESPONSE TO DRAFT REVIEW REPORT End of report -8-