Hemet Union School District

BETTY T. YEE California State Controller August 2, 2016 Christi Barrett, Superintendent Hemet Unified School District 1791 W. Acacia Avenue Hemet, CA 92545 Dear Ms. Barrett: The State Controller’s Office performed a desk review of costs claimed by the Hemet 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, 2003; and July 1, 2004, through June 30, 2005. The district did not claim any program costs for the period of July 1, 2003, through June 30, 2004. 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 $25,014 for the mandated program. Our review found that $14,359 is allowable and $10,655 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 $14,359, contingent upon available appropriations. We informed Pam Buckhout, Director of Fiscal Services, of the finding via email on June 20, 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than three years following the date of this report, regardless of whether this report is subsequently supplemented, superseded, or otherwise amended.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 Christi Barrett, Superintendent -2- August 2, 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-9035 cc: Pam Buckhout, Director of Fiscal Services Hemet Unified School District Nancy Sheets, Executive Director District Fiscal Services, Riverside 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 Hemet Unified School District High School Exit Examination Program Attachment 1— Summary of Program Costs July 1, 2000, through June 30, 2003; and July 1, 2004, through June 30, 2005 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 $ 205 $ 205 $ - HSEE administration 1,128 1,128 - Reporting data to the Superintendent of Public Instruction 240 240 - Total direct costs 1,573 1,573 - Indirect costs 60 60 - Total direct and indirect costs 1,633 1,633 - Less offsetting reimbursements - (6,294) ( 6,294) Subtotal 1,633 (4,661) ( 6,294) Adjustment to eliminate negative balance - 4,661 4,661 Total program costs $ 1,633 - $ ( 1,633) 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: Documentation of adequate notice $ 274 $ 274 $ - HSEE administration 1,027 1,027 - Reporting data to the Superintendent of Public Instruction 103 103 - Total direct costs 1,404 1,404 - Indirect costs 41 41 - Total direct and indirect costs 1,445 1,445 - Less offsetting reimbursements - (2,736) ( 2,736) Subtotal 1,445 (1,291) ( 2,736) Adjustment to eliminate negative balance - 1,291 1,291 Total program costs $ 1,445 - $ ( 1,445) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ - 1 of 3 Hemet 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: Documentation of adequate notice $ 284 $ 284 $ - HSEE administration 71 71 - Reporting data to the Superintendent of Public Instruction 103 103 - Total salaries and benefits 458 458 - Materials and supplies: HSEE Administration 14,849 14,849 - Total materials and supplies 14,849 14,849 - Total direct costs 15,307 15,307 - Indirect costs 840 840 - Total direct and indirect costs 16,147 16,147 - Less offsetting reimbursements - (1,788) ( 1,788) Total program costs $ 16,147 14,359 $ ( 1,788) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 14,359 July 1, 2004, through June 30, 2005 Direct costs: Salaries and benefits: Documentation of adequate notice $ 1,634 $ 1,634 $ - HSEE administration 3,552 3,552 - Reporting data to the Superintendent of Public Instruction 103 103 - Total salaries and benefits 5,289 5,289 - Materials and supplies: HSEE administration 223 223 - Total materials and supplies 223 223 - Total direct costs 5,512 5,512 - Indirect costs 277 277 - Total direct and indirect costs 5,789 5,789 - Less offsetting reimbursements - (7,895) ( 7,895) Subtotal 5,789 (2,106) ( 7,895) Adjustment to eliminate negative balance - 2,106 2,106 Total program costs $ 5,789 - $ ( 5,789) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ - 2 of 3 Hemet 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, 2003; and July 1, 2004, through June 30, 2005 Direct costs: Salaries and benefits: Documentation of adequate notice $ 2,397 $ 2,397 $ - HSEE administration 5,778 5,778 - Reporting data to the Superintendent of Public Instruction 549 549 - Total salaries and benefits 8,724 8,724 - Materials and supplies: HSEE administration 15,072 15,072 - Total materials and supplies 15,072 15,072 - Total direct costs 23,796 23,796 - Indirect costs 1,218 1,218 - Total direct and indirect costs 25,014 25,014 - Less offsetting reimbursements - (18,713) ( 18,713) Subtotal 25,014 6,301 ( 18,713) Adjustment to eliminate negative balance - 8,058 8,058 Total program costs $ 25,014 14,359 $ ( 10,655) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 14,359 _________________________ 1 See Attachment 2, Review Results. 3 of 3 Hemet Unified School District High School Exit Examination Program Attachment 2— Review Results July 1, 2000, through June 30, 2003; and July 1, 2004, through June 30, 2005 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 $18,713, for Unreported offsetting the period of July 1, 2000, through June 30, 2003; and July 1, 2004, revenue through June 30, 2005. 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 $18,713 from the CDE. 1 of 2 Hemet 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 2004-05 Total HSEE apportionment $ (6,294) $ (2,736) $ (1,788) $ (7,895) $ (18,713) Less offset apportionment - - - - - Review finding $ (6,294) $ (2,736) $ (1,788) $ (7,895) $ (18,713) 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 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