San Joaquin County

SAN JOAQUIN 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 Frederick A. Wentworth County Superintendent of Schools San Joaquin County Office of Education 2901 Arch-Airport Road Stockton, CA 95213 Dear Mr. Wentworth: The State Controller’s Office reviewed the San Joaquin 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 San Joaquin COE followed its audit resolution process for FY 2002-03 and FY 2003-04. As a result, the San Joaquin 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: Jeri Blote Manager District Fiscal Oversight San Joaquin County Office of Education Nicole Lorenz, Internal Audit Manager San Joaquin 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 San Joaquin 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 San Joaquin County Office of Education Audit Resolution Process Review Report Summary The State Controller’s Office (SCO) reviewed the San Joaquin 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 San Joaquin COE followed its audit resolution process for FY 2002-03 and FY 2003-04. The last day of fieldwork was August 10, 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 San Joaquin COE provides coordination of educational programs and professional and financial supervision for 17 local education agencies and 5 joint powers entities 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- San Joaquin 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 San Joaquin 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 San Joaquin 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 San Joaquin 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 San Joaquin COE notified local education agencies that they must submit completed corrective action forms to the San Joaquin COE by March 15, 2003, and March 15, 2004, 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 San Joaquin 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 San Joaquin COE sent to the SPI and the SCO with respect to any resolved and unresolved audit exceptions. Conclusion Our review disclosed that the San Joaquin COE followed its audit resolution process for FY 2002-03 and FY 2003-04. As a result, the San Joaquin COE was in compliance with Education Code Section 41020 for FY 2002-03 and FY 2003-04. We made no additional determination regarding the San Joaquin COE’s audit resolution process beyond the scope of the review outlined above. -2- San Joaquin County Office of Education Audit Resolution Process Views of We discussed our conclusion with Jeri Blote, Manager, District Fiscal Responsible Oversight; and Nicole Lorenz, Internal Audit Manager, San Joaquin COE, at an exit conference held on August 10, 2006. The San Joaquin Officials COE representatives generally agreed with the conclusion and authorized the issuance of the final report. Restricted Use This report is intended solely for the information and use of the San Joaquin 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-900