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San Diego County
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SAN DIEGO COUNTY
OFFICE OF EDUCATION
Review Report
AUDIT RESOLUTION PROCESS
Fiscal Year 2017-18 and Fiscal Year 2018-19
BETTY T. YEE
California State Controller
August 2021
BETTY T. YEE
California State Controller
August 23, 2021
Paul Gothold, Ed.D., County Superintendent of Schools
San Diego County Office of Education
6401 Linda Vista Road
San Diego, CA 92111
Dear Dr. Gothold:
The State Controller’s Office reviewed the San Diego 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) 2017-18 and FY 2018-19.
Our review found that the San Diego COE followed its audit resolution process for FY 2017-18
and FY 2018-19. However, the audit resolution process was deficient because it did not identify
Local Control Funding Formula-related audit findings or revised audit findings for review and
resolution as part of the San Diego COE’s oversight responsibility. Except for the issues noted
above, the San Diego COE complied with California Education Code section 41020.
If you have any questions, please contact Joel James, Chief, Financial Audits Bureau, by
telephone at (916) 323-1573.
Sincerely,
Original signed by
KIMBERLY TARVIN, CPA
Chief, Division of Audits
KT/as
Paul Gothold, Ed.D., -2- August 23, 2021
County Superintendent of Schools
cc: Michael Simonson, Deputy Superintendent
Chief Business Official, San Diego County Office of Education
Liliana Enriquez, Executive Assistant III
Office of the Superintendent, San Diego County Office of Education
Brent Watson, Executive Director
San Diego County Office of Education
Natalie Schuff, Director
San Diego County Office of Education
Elizabeth Dearstyne, Director
School Fiscal Services Division
California Department of Education
Keith Smith, Administrator
School Fiscal Services Division
California Department of Education
Christopher Ferguson, Program Budget Manager
Education Systems Unit
California Department of Finance
San Diego County Office of Education Audit Resolution Process
Contents
Review Report
Summary ............................................................................................................................ 1
Background ........................................................................................................................ 1
Objective, Scope, and Methodology ................................................................................. 2
Conclusion .......................................................................................................................... 3
Views of Responsible Officials .......................................................................................... 3
Restricted Use .................................................................................................................... 3
Finding and Recommendation .............................................................................................. 4
Attachment—San Diego County Office of Education’s Response to Draft Review Report
San Diego County Office of Education Audit Resolution Process
Review Report
Summary The State Controller’s Office (SCO) reviewed the San Diego County
Office of Education’s (COE) audit resolution process for local education
agency (LEA) exceptions noted in the annual audit reports for fiscal
year (FY) 2017-18 and FY 2018-19. Our review found that the San Diego
COE followed its audit resolution process for FY 2017-18 and
FY 2018-19. However, the audit resolution process was deficient because
it did not identify Local Control Funding Formula (LCFF)-related audit
findings or revised audit findings for review and resolution as part of
the San Diego COE’s oversight responsibility.
Background California Education Code section 41020(n) requires the State Controller
to annually select a sample of county superintendents of schools for which
the SCO will perform a follow-up review of the audit resolution process.
Results of these reviews will be reported to the State Superintendent of
Public Instruction (SSPI) and the county superintendents of the schools
that were reviewed.
In addition, California 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 SSPI can discern the exceptions for which it is their
responsibility to ensure that the LEAs take action to correct.
The San Diego COE provides coordination of educational programs and
professional and financial supervision for 42 LEAs under its jurisdiction.
In addition, the county superintendent of schools maintains special schools
and programs countywide, independent of the LEAs.
County superintendents of schools are required to do the following:
Review, for each of their school districts, 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
(California Education Code section 41020(i)(1));
Review audit exceptions related to the use of program funds for
instructional materials, teacher misassignments, and school
accountability report cards. The county superintendents must also
determine whether the exceptions have been corrected or an
acceptable plan of correction has been developed (California
Education Code section 41020(i)(2));
Review audit exceptions related to attendance, inventory of
equipment, internal control, and other miscellaneous exceptions.
Attendance exceptions or issues must include those related to local
control funding formula allocations pursuant to California Education
Code section 42238.02, as implemented by section 42238.03, and
independent study (California Education Code section 41020(j)(1));
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San Diego County Office of Education Audit Resolution Process
Notify the LEA, and request that the governing board of the LEA
provide to the county superintendent of schools a description of the
correction or plan of correction by March 15 of the subsequent year
(California Education Code section 41020(j)(2));
Review the description of the correction or plan of correction and
determine its adequacy and, if the LEA’s response was not adequate,
require the LEA to resubmit that portion of its response that is
inadequate (California Education Code section 41020(j)(3));
By May 15 of the subsequent year, certify to the SSPI and the SCO
that the county has reviewed all applicable exceptions, and state that
all exceptions have been corrected, or that an acceptable plan for
correction has been submitted by the LEA to the county
superintendent, except as noted in the certification. In addition,
identify by LEA any attendance-related exceptions or exceptions
involving state funds, and require the LEA to submit the appropriate
reporting forms to the SSPI for processing (California Education Code
section 41020(k));
Review LEAs’ unresolved prior-year audit exceptions when the
California Department of Education defers to the county (California
Education Code section 41020(l)); and
Adjust subsequent local property tax requirements to correct audit
exceptions relating to LEA tax rates and tax revenues (California
Education Code section 41020(o)).
Objective, Scope, The objective of our review was limited to determining whether the San
Diego COE followed its audit resolution process for resolving LEA audit
and Methodology
exceptions in a manner consistent with California Education Code
section 41020. Our review did not include an evaluation of the sufficiency
of the action taken by the LEA and the San Diego COE to address each
exception, nor did it assess the degree to which each exception was
addressed.
The review period was FY 2017-18 and FY 2018-19.
To achieve our objective, we:
Verified that the San Diego COE addressed all attendance, inventory
of equipment, internal control, and miscellaneous exceptions. In
addition, we verified that the San Diego COE addressed any findings
on program funds for instructional materials, teacher misassignments,
and school accountability report cards. However, with respect to
exceptions based on sample items, our review did not include a
determination of whether the exception results were properly
quantified and addressed at a districtwide or countywide level;
Verified that the San Diego COE notified LEAs that they must submit
completed corrective action forms to the San Diego COE by
March 15, 2019, and March 15, 2020, for FY 2017-18 and
FY 2018-19, respectively. Our review did not include an assessment
of the LEAs’ progress in taking corrective action;
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San Diego County Office of Education Audit Resolution Process
Verified that the San Diego COE required the LEAs to submit the
appropriate reporting forms to the SSPI for any attendance-related
exceptions that affect state funding;
Reviewed the letters of certification due on May 15, 2019, and
July 15, 2020, that the San Diego COE sent to the SSPI and the SCO
regarding any resolved and unresolved audit exceptions;
Verified that the San Diego COE followed up with unresolved prior-
year audit exceptions that the SSPI required the San Diego COE to
conduct; and
Verified that the San Diego COE adjusted subsequent local property
tax requirements to correct audit exceptions related to LEA tax rates
and tax revenues.
Our review was conducted under the authority of California Education
Code section 41020(n).
Conclusion Our review found that the San Diego COE followed its audit resolution
process for FY 2017-18 and FY 2018-19. However, the audit resolution
process was deficient because it did not identify LCFF-related audit
findings or revised audit findings for review and resolution as part of the
San Diego COE’s oversight responsibility. Except for the issues noted
above, the San Diego COE complied with California Education Code
section 41020 for FY 2017-18 and FY 2018-19. We made no additional
determination regarding the San Diego COE’s audit resolution process
beyond the scope of the review outlined above.
Views of We issued a draft review report on April 13, 2021. Brent Watson,
Responsible Executive Director responded by letter dated April 20, 2021 (Attachment),
agreeing with the review results except as they relate to the review of
Officials
revised audit findings. This final review report includes San Diego COE’s
response.
Restricted Use This review report is intended solely for the information and use of the
San Diego 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 review report, which is a matter of
public record and is available on the SCO website at www.sco.ca.gov.
Original signed by
KIMBERLY TARVIN, CPA
Chief, Division of Audits
August 23, 2021
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San Diego County Office of Education Audit Resolution Process
Finding and Recommendation
FINDING— Based on our review of the San Diego COE’s audit resolution process for
Deficiencies in the LEA exceptions noted in the annual audit reports for FY 2017-18 and
identification and FY 2018-19, we noted the following deficiencies:
review of LEA
For FY 2017-18 and FY 2018-19, the San Diego COE did not identify
audit exceptions LCFF-related audit findings as part of its oversight responsibility; and
For FY 2017-18, the San Diego COE process did not include the
review of a revised audit finding related to Instructional Materials.
California Education Code section 41020(i)(2) states:
Commencing with the 2004-05 audit of local educational agencies
pursuant to this section and subdivision (d) of Section 41020.1, each
county superintendent of schools shall include in the review of audit
exceptions performed pursuant to this subdivision those audit exceptions
related to use of instructional materials program funds, teacher
misassignments pursuant to Section 44258.9, information reported on
the school accountability report card required pursuant to Section 33126
and shall determine whether the exceptions are either corrected or an
acceptable plan of correction has been developed.
California Education Code section 41020(j) states, in part:
Upon submission of the final audit report to the governing board of each
local educational agency and subsequent receipt of the audit by the
county superintendent of schools having jurisdiction over the local
education agency, the county office of education shall do all of the
following:
(1) Review audit exceptions related to attendance, inventory of
equipment, internal control, and other miscellaneous exceptions.
Attendance exceptions or issues shall include, but not be limited to,
those related to local control funding formula allocations pursuant
to Section 42238.02, as implemented by Section 42238.03, and
independent study.
Recommendation
We recommend that the San Diego COE comply with California
Education Code section 41020 by identifying and reviewing all audit
exceptions that fall under its oversight responsibility.
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San Diego County Office of Education Audit Resolution Process
Attachment—
San Diego County Office of Education’s
Response to Draft Review Report
State Controller’s Office
Division of Audits
Post Office Box 942850
Sacramento, CA 94250
http://www.sco.ca.gov
S21-COE-9005