Escondido Union High School District

BETTY T. YEE California State Controller May 25, 2016 Steve Boyle, District Superintendent Escondido Union High School District 302 North Midway Drive Escondido, CA 92027-2741 Dear Mr. Boyle: The State Controller’s Office performed a desk review of costs claimed by the Escondido Union High School District for the legislatively mandated High School Exit Examination (HSEE) Program (Chapter 1, Statutes of 1999x; and Chapter 135, Statutes of 1999) for the period of July 1, 2000, through June 30, 2002; July 1, 2004, through June 30, 2005; and July 1, 2006, through June 30, 2008. We conducted our review under the authority of Government Code sections 12410, 17558.5, and 17561. Our review was limited to ensuring that the California Department of Education HSEE Program apportionment was properly offset on the district’s claims. The district claimed $207,744 for the mandated program. Our review found that $162,940 is allowable and $44,804 is unallowable. The costs are unallowable because the district did not offset the funding provided in the State Budget for the HSEE Program, as described in the attached Summary of Program Costs and the Review Results. The State made no payments to the district. The State will pay $162,940, contingent upon available appropriations. We informed Nadine Krawietz, Finance Director, of the review finding via email on April 28, 2016. We did not receive a response from the district. This final letter report contains an adjustment to costs claimed by the district. If you disagree with the review finding, you may file an Incorrect Reduction Claim (IRC) with the Commission on State Mandates (Commission). Pursuant to Section 1185, subdivision (c), of the Commission’s regulations (California Code of Regulations, Title 3), an IRC challenging this adjustment must be filed with the Commission no later than three years following the date of this report, regardless as to whether this report is subsequently supplemented, superseded or otherwise amended. You may obtain IRC information on the Commission’s website at www.csm.ca.gov/forms/IRCForm.pdf. P.O. Box 942850, Sacramento, CA 94250  (916) 445-2636 3301 C Street, Suite 700, Sacramento, CA 95816  (916) 324-8907 901 Corporate Center Drive, Suite 200, Monterey Park, CA 91754  (323) 981-6802 Steve Boyle, District Superintendent -2- May 25, 2016 If you have any questions, please contact Jim L. Spano, Chief, Mandated Cost Audits Bureau, by telephone at (916) 323-5849. Sincerely, Original signed by JEFFREY V. BROWNFIELD, CPA Chief, Division of Audits JVB/as Attachments RE: S16-MCC-9029 cc: Michael Simonson, Assistant Superintendent Business Services, Escondido Union High School District Nadine Krawietz, Finance Director Finance Department, Escondido Union High School District Lora Duzyk, Assistant Superintendent Business Services, San Diego County Office of Education Brent Watson, Executive Director Business Advisory Services, San Diego County Office of Education Peter Foggiato, Director School Fiscal Services Division California Department of Education Amy Tang-Paterno, Education Fiscal Services Consultant Government Affairs Division California Department of Education Thomas Todd, Assistant Program Budget Manager Education Systems Unit, California Department of Finance Jay Lal, Manager Division of Accounting and Reporting State Controller’s Office Escondido Union High School District High School Exit Examination Program Attachment 1— Summary of Program Costs July 1, 2000, through June 30, 2002; July 1, 2004, through June 30, 2005; and July 1, 2006, through June 30, 2008 Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment ¹ July 1, 2000, through June 30, 2001 Direct costs: Salaries and benefits: Documentation of adequate notice $ 509 $ 509 $ - Determination of English language skills 138 138 - HSEE administration 17,717 17,717 - Test security 3,105 3,105 - Reporting data to the Superintendent of Public Instruction 60 60 - - Total direct costs 21,529 21,529 - Indirect costs 1,372 1,372 - Total direct and indirect costs 22,901 22,901 - Less offsetting reimbursements - (8,649) (8,649) Total program costs $ 22,901 14,252 $ (8,649) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 14,252 July 1, 2001, through June 30, 2002 Direct costs: Salaries and benefits: Documentation of adequate notice $ 519 $ 519 $ - Determination of English language skills 141 141 - HSEE administration 20,449 20,449 - Test security 3,211 3,211 - Reporting data to the Superintendent of Public Instruction 64 64 - - Total direct costs 24,384 24,384 - Indirect costs 1,970 1,970 - Total direct and indirect costs 26,354 26,354 - Less offsetting reimbursements - (3,465) (3,465) Total program costs $ 26,354 22,889 $ (3,465) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 22,889 1 of 3 Escondido Union High School District High School Exit Examination Program Attachment 1 (continued) Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment ¹ July 1, 2004, through June 30, 2005 Direct costs: Salaries and benefits: Documentation of adequate notice $ 648 $ 648 $ - Determination of English language skills 190 190 - HSEE administration 24,143 24,143 - Test security 4,044 4,044 - Reporting data to the Superintendent of Public Instruction 65 65 - Total direct costs 29,090 29,090 - Indirect costs 2,973 2,973 - Total direct and indirect costs 32,063 32,063 - Less offsetting reimbursements - (8,869) (8,869) Total program costs $ 32,063 23,194 $ (8,869) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 23,194 July 1, 2006, through June 30, 2007 Direct costs: Salaries and benefits: Determination of English language skills $ 1,005 $ 1,005 $ - HSEE administration 50,003 50,003 - Test security 6,158 6,158 - Reporting data to the Superintendent of Public Instruction 404 404 - Total direct costs 57,570 57,570 - Indirect costs 4,145 4,145 - Total direct and indirect costs 61,715 61,715 - Less offsetting reimbursements - (11,888) (11,888) Total program costs $ 61,715 49,827 $ (11,888) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 49,827 July 1, 2007, through June 30, 2008 Direct costs: Salaries and benefits: Determination of English Language Skills $ 1,158 $ 1,158 $ - HSEE Administration 44,476 44,476 - Test Security 13,866 13,866 - Reporting Data to the Superintendent of Public Instruction 401 401 - Total direct costs 59,901 59,901 - Indirect costs 4,810 4,810 - Total direct and indirect costs 64,711 64,711 - Less offsetting reimbursements - (11,933) (11,933) Total program costs $ 64,711 52,778 $ (11,933) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 52,778 2 of 3 Escondido Union High School District High School Exit Examination Program Attachment 1 (continued) Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment ¹ Summary: July 1, 2000, through June 30, 2002; July 1, 2004, through June 30, 2005; and July 1, 2006, through June 30, 2008 Direct costs: Salaries and benefits: Documentation of adequate notice $ 1,676 $ 1,676 $ - Determination of English language skills 2,632 2,632 - HSEE administration 156,788 156,788 - Test security 30,384 30,384 - Reporting data to the Superintendent of Public Instruction 994 994 - Total direct costs 192,474 192,474 - Indirect costs 15,270 15,270 - Total direct and indirect costs 207,744 207,744 - Less offsetting reimbursements - (44,804) (44,804) Total program costs $ 207,744 162,940 $ (44,804) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 162,940 _________________________ 1 See Attachment 2, Review Results. 3 of 3 Escondido Union High School District High School Exit Examination Program Attachment 2— Review Results July 1, 2000, through June 30, 2002; July 1, 2004, through June 30, 2005; and July 1, 2006, through June 30, 2008 BACKGROUND— On March 25, 2004, the Commission on State Mandates (Commission) adopted a Statement of Decision for the High School Exit Examination (HSEE) Program finding that Education Code sections 60850, 60851, 60853, and 60855 as added in 1999, along with California Code of Regulations, Title 5, sections 1200-1225 that became effective in 2001 and 2003, constitutes a new program or higher level of service and imposes a reimbursable state-mandated program upon school districts. The program’s parameters and guidelines establish the state mandate and define the reimbursement criteria. The Commission adopted the parameters and guidelines on April 26, 2006. The parameters and guidelines categorize reimbursable activities into the following six components: adequate notice, documentation of adequate notice, determining English language skills, high school exit examination administration, test security/cheating, and reporting data to the Superintendent of Public Instruction. In compliance with Government Code section 17558, the State Controller’s Office issues claiming instructions to assist local agencies, school districts, and community college districts in claiming mandated program reimbursable costs. Senate Bill 172 was signed on October 7, 2015, suspending administration of the California HSEE Program and the requirement that students completing Grade 12 successfully pass the high school exit exam as a condition of receiving a diploma for the 2015-16 through 2017-18 school years. FINDING— The district did not report the HSEE Program apportionments received from the California Department of Education (CDE), totaling $44,804, for Unreported offsetting the period of July 1, 2000, through June 30, 2002; July 1, 2004, through reimbursements June 30, 2005; and July 1, 2006, through June 30, 2008. Education Code 60851, subdivision (a), specifies that the State Superintendent of Public Instruction apportion funds to school districts to enable them to administer the HSEE Program. The CDE establishes the amount of funding to be apportioned per test administered, based on a review of the cost per test. For the review period, the district received $44,804 from the CDE. 1 of 2 Escondido Union High School District High School Exit Examination Program The following table summarizes the unreported offsetting reimbursements for the review period: Fiscal Year 2000-01 2001-02 2004-05 2006-07 2007-08 Total HSEE apportionment $ ( 8,649) $ (3,465) $ (8,869) $ (11,888) $ (11,933) $ (44,804) Less offset apportionment - - - - - - Review finding $ ( 8,649) $ (3,465) $ (8,869) $ (11,888) $ (11,933) $ (44,804) The parameters and guidelines (Section VII. Offsetting Savings and Reimbursements) state, “Reimbursement shall be offset by funding provided in the State Budget for the HSEE Program.” Recommendation The HSEE Program was suspended in the FY 2015-16 Budget Act. Further, commencing in FY 2013-14, the district elected to participate in a block grant program, pursuant to Government Code section 17581.6, in lieu of filing annual mandated cost claims. If the HSEE Program becomes active and if the district chooses to opt out of the block grant program, we recommend that the district ensure that all applicable reimbursements are offset against mandated program costs. 2 of 2