Redlands Unified School District

BETTY T. YEE California State Controller July 8, 2016 Lori Rhodes, Superintendent Redlands Unified School District 20 W. Lugonia Avenue Redlands, CA 92374 Dear Ms. Rhodes: The State Controller’s Office performed a desk review of costs claimed by the Redlands Unified 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, 2005; and July 1, 2006, through June 30, 2007. 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 $70,102 for the mandated program. Our review found that $27,581 is allowable and $42,521 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 $27,581, contingent upon available appropriations. We informed Brian Guggisberg, Director of Fiscal Services, of the review finding via email on June 1, 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 the 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than three years following the date of this report, regardless of whether this report is subsequently supplemented, superseded, or otherwise amended.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 Lori Rhodes, Superintendent -2- July 8, 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/rg Attachments RE: S16-MCC-9032 cc: Brian Guggisberg, Director of Fiscal Services Redlands Unified School District Cynna Hinkle, Director Business Advisory Services San Bernardino 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 Redlands Unified School District High School Exit Examination Program Attachment 1— Summary of Program Costs July 1, 2000, through June 30, 2005; and July 1, 2006, through June 30, 2007 Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment 1 July 1, 2000, through June 30, 2001 Direct costs: Salaries and benefits: Adequate notice $ 3 63 $ 363 $ - Documentation of adequate notice 1 ,937 1,937 - Determination of English language skills 4 84 484 - HSEE administration 1 ,211 1,211 - Test security 3 ,874 3,874 - Total direct costs 7 ,869 7,869 - Indirect costs 4 14 414 - Total direct and indirect costs 8 ,283 8,283 - Less offsetting reimbursements - (9,894) ( 9,894) Subtotal 8 ,283 (1,611) ( 9,894) Adjustment to eliminate negative balance - 1,611 1,611 Total program costs $ 8 ,283 - $ ( 8,283) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ - July 1, 2001, through June 30, 2002 Direct costs: Salaries and benefits: Adequate notice $ 3 72 $ 372 $ - Documentation of adequate notice 1 ,987 1,987 - Determination of English language skills 4 97 497 - HSEE administration 1 ,242 1,242 - Test security 5 ,959 5,959 - Total direct costs 1 0,057 10,057 - Indirect costs 3 72 372 - Total direct and indirect costs 1 0,429 10,429 - Less offsetting reimbursements - (2,454) ( 2,454) Total program costs $ 1 0,429 7,975 $ ( 2,454) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 7,975 1 of 4 Redlands Unified School District High School Exit Examination Program Attachment 1 (continued) Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment 1 July 1, 2002, through June 30, 2003 Direct costs: Salaries and benefits: Adequate notice $ 3 72 $ 372 $ - Documentation of adequate notice 1 ,987 1,987 - Determination of English language skills 4 97 497 - HSEE administration 1 ,242 1,242 - Test security 7 ,449 7,449 - Total direct costs 1 1,547 11,547 - Indirect costs 6 30 630 - Total direct and indirect costs 1 2,177 12,177 - Less offsetting reimbursements - (8,469) ( 8,469) Total program costs $ 1 2,177 3,708 $ ( 8,469) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 3,708 July 1, 2003, through June 30, 2004 Direct costs: Salaries and benefits: Adequate notice $ 3 78 $ 378 $ - Documentation of adequate notice 2 ,015 2,015 - Determination of English language skills 5 04 504 - HSEE administration 1 ,260 1,260 - Test security 5 ,542 5,542 - Total direct costs 9 ,699 9,699 - Indirect costs 5 85 585 - Total direct and indirect costs 1 0,284 10,284 - Less offsetting reimbursements - (5,588) ( 5,588) Total program costs $ 1 0,284 4,696 $ ( 5,588) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 4,696 2 of 4 Redlands Unified 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: Adequate notice $ 4 05 $ 405 $ - Documentation of adequate notice 2 ,160 2,160 - Determination of English language skills 5 40 540 - HSEE administration 1 ,350 1,350 - Test security 8 ,100 8,100 - Total direct costs 1 2,555 12,555 - Indirect costs 5 57 557 - Total direct and indirect costs 1 3,112 13,112 - Less offsetting reimbursements - (7,782) ( 7,782) Total program costs $ 1 3,112 5,330 $ ( 7,782) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 5,330 July 1, 2006, through June 30, 2007 Direct costs: Salaries and benefits: Adequate notice $ 4 34 $ 434 $ - Documentation of adequate notice 2 ,313 2,313 - Determination of English language skills 5 78 578 - HSEE administration 1 ,446 1,446 - Test security 1 0,359 10,359 - Total direct costs 1 5,130 15,130 - Indirect costs 6 87 687 - Total direct and indirect costs 1 5,817 15,817 - Less offsetting reimbursements - (9,945) ( 9,945) Total program costs $ 1 5,817 5,872 $ ( 9,945) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 5,872 3 of 4 Redlands Unified 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, 2005; and July 1, 2006, through June 30, 2007 Direct costs: Salaries and benefits: Adequate notice $ 2 ,324 $ 2,324 $ - Documentation of adequate notice 1 2,399 12,399 - Determination of English language skills 3 ,100 3,100 - HSEE administration 7 ,751 7,751 - Test security 4 1,283 41,283 - Total direct costs 6 6,857 66,857 - Indirect costs 3 ,245 3,245 - Total direct and indirect costs 7 0,102 70,102 - Less offsetting reimbursements - (44,132) ( 44,132) Subtotal 7 0,102 25,970 ( 44,132) Adjustment for negative balance - 1,611 1,611 Total program costs $ 7 0,102 27,581 $ ( 42,521) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 27,581 _________________________ 1 See Attachment 2, Review Results. 4 of 4 Redlands Unified School District High School Exit Examination Program Attachment 2— Review Results July 1, 2000, through June 30, 2005; and July 1, 2006, through June 30, 2007 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 district 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 $44,132, for Unreported offsetting the period of July 1, 2000, through June 30, 2005; and July 1, 2006, reimbursements through June 30, 2007. Education Code section 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 $44,132 from the CDE. 1 of 2 Redlands Unified 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 2002-03 2003-04 2004-05 2006-07 Total HSEE apportionment $ (9,894) $ (2,454) $ (8,469) $ (5,588) $ (7,782) $ (9,945) $ (44,132) Less offset apportionment - - - - - - - Review finding $ (9,894) $ (2,454) $ (8,469) $ (5,588) $ (7,782) $ (9,945) $ (44,132) Recommendation The HSEE Program was suspended in the fiscal year (FY) 2015-16 Budget Act. Further, commencing in FY 2012-13, 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