Monterey County

MONTEREY COUNTY OFFICE OF EDUCATION Report of Review AUDIT RESOLUTION PROCESS Fiscal Year (FY) 2002-03 and FY 2003-04 J C OHN HIANG California State Controller January 2007 January 31, 2007 William D. Barr County Superintendent of Schools Monterey County Office of Education 901 Blanco Circle Salinas, CA 93912-0851 Dear Mr. Barr: The State Controller’s Office reviewed the Monterey 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) 2002-03 and FY 2003-04. Our review disclosed that the Monterey COE followed its audit resolution process for FY 2002-03 and FY 2003-04. As a result, the Monterey COE was in compliance with Education Code Section 41020. If you have any questions, please contact Casandra Moore-Hudnall, Chief, Financial Audits Bureau, at (916) 322-4846. Sincerely, Original signed by JEFFREY V. BROWNFIELD Chief, Division of Audits JVB/ams:vb cc: Gary Bousum, Assitant Superintendent, Business Services Monterey County Office of Education Dawn Torey, Executive Director, Business Services Monterey County Office of Education Mely Lat, Supervisor, Business Services Monterey County Office of Education Scott Hannan, Director School Fiscal Services Division California Department of Education Arlene Matsuura, Education Fiscal Services Consultant School Fiscal Services Division California Department of Education Dan Troy, Principal Program Budget Analyst Education Systems, Department of Finance Monterey County Office of Education Audit Resolution Process Contents Review Report Summary ............................................................................................................................ 1 Background ........................................................................................................................ 1 Objective, Scope, and Methodology ................................................................................. 2 Conclusion .......................................................................................................................... 2 Views of Responsible Officials .......................................................................................... 3 Restricted Use .................................................................................................................... 3 Monterey County Office of Education Audit Resolution Process Review Report Summary The State Controller’s Office (SCO) reviewed the Monterey County Office of Education’s (COE) audit resolution process for local education agency exceptions noted in the annual audit reports for fiscal year (FY) 2002-03 and FY 2003-04. Our review disclosed that the Monterey COE followed its audit resolution process for FY 2002-03 and FY 2003-04. The last day of fieldwork was August 17, 2006. Background Education Code Section 41020(n) requires the State Controller to annually select a sampling of county superintendents of schools to perform a follow-up review of the audit resolution process. Results of these reviews are reported to the Superintendent of Public Instruction and the county superintendents of the schools that were reviewed. Furthermore, Education Code Section 41020(n) states that the State Controller shall require auditors to categorize audit exceptions in the audit report in such a manner that both the county superintendent of schools and the Superintendent of Public Instruction (SPI) can discern which exceptions they are responsible for ensuring correction of by a local education agency. The Monterey COE provides coordination of educational programs and professional and financial supervision for 24 local education agencies under its direct jurisdiction. In addition, the county superintendent of schools maintains special schools and programs countywide independent of the local education agencies. County superintendents of schools are required to do the following: Review, for each of their school districts, the 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 (Education Code Section 41020(i)); Review audit exceptions related to attendance exceptions or issues that shall include, but are not limited to, those related to revenue limits, adult education, and independent study (Education Code Section 41020(j)(1)); Notify the local education agency and request the governing board of the local education agency to provide to the county superintendent of schools a description of the correction or plan of correction by March 15 (Education Code Section 41020(j)(2)); Review the description of the correction or plan of correction and determine its adequacy and, if its response was not adequate, require the local education agency to resubmit a portion of its response (Education Code Section 41020(j)(3)); and -1- Monterey County Office of Education Audit Resolution Process By May 15, certify to the SPI and the SCO that the county has reviewed all applicable exceptions, and state that all exceptions have been corrected or an acceptable plan for correction has been submitted by the local education agency to the county superintendent, except as noted in the certification. In addition, identify by local education agency any attendance-related exceptions or exceptions involving state funds, and require the local education agency to submit the appropriate reporting forms to the SPI for processing (Education Code Section 41020(k)). Objective, Our review was conducted under the authority of Education Code Section 41020(n). Our review scope was limited to determining whether Scope, and or not the Monterey COE followed its audit resolution process in Methodology resolving audit exceptions. Our review did not include an evaluation of the sufficiency of the action taken by the local education agency and the Monterey COE to address each exception, nor did it assess the degree to which each exception was addressed. Specifically, our review was limited to the following procedures. Verifying that the Monterey COE addressed all attendance, inventory of equipment, internal control, and miscellaneous exceptions. However, with respect to exceptions based on sample items, our review did not include a determination of whether or not the exception results were properly quantified and addressed at a districtwide or countywide level; Verifying that the Monterey COE notified local education agencies that they must submit completed corrective action forms to the Monterey COE by March 15, 2004, and March 15, 2005, for FY 2002-03 and FY 2003-04, respectively. Our review did not include an assessment of the local education agencies’ progress with respect to taking corrective action; Verifying that the Monterey COE required the local education agencies to submit the appropriate reporting forms to the SPI for any attendance-related exceptions that affect state funding; and Reviewing the May 15, 2004, and May 15, 2005, letters of certification that the Monterey COE sent to the SPI and the SCO with respect to any resolved and unresolved audit exceptions. Conclusion Our review disclosed that the Monterey COE followed its audit resolution process for FY 2002-03 and FY 2003-04. As a result, the Monterey COE was in compliance with Education Code Section 41020 for FY 2002-03 and FY 2003-04. We made no additional determination regarding the Monterey COE’s audit resolution process beyond the scope of the review outlined above. -2- Monterey County Office of Education Audit Resolution Process Views of We discussed our conclusion with Gary Bousum, Assistant Superintendent, Business Services; and Dawn Torey, Executive Director, Responsible Business Services, Monterey COE, at an exit conference held on August Officials 17, 2006. The Monterey COE representatives generally agreed with the conclusion and authorized issuance of the final report. Restricted Use This report is intended solely for the information and use of the Monterey COE, the California Department of Education, 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 meant to limit distribution of this report, which is a matter of public record. Original signed by JEFFREY V. BROWNFIELD Chief, Division of Audits -3- State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, California 94250-5874 http://www.sco.ca.gov S07-COE-902