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ORANGE COUNTY
DEPARTMENT OF EDUCATION
Review Report
AUDIT RESOLUTION PROCESS
Fiscal Year 2019-20 and Fiscal Year 2020-21
BETTY T. YEE
California State Controller
May 2023
BETTY T. YEE
California State Controller
May 1, 2023
Al Mijares, Ph.D., County Superintendent of Schools
Orange County Department of Education
200 Kalmus Drive
Costa Mesa, CA 92626
Dear Dr. Mijares:
The State Controller’s Office reviewed the Orange County Department of Education’s (DOE)
audit resolution process for local education agency exceptions noted in the annual audit reports.
The review covered fiscal year (FY) 2019-20 and FY 2020-21.
Our review found that the Orange County DOE followed its audit resolution process for
FY 2019-20 and FY 2020-21. As a result, the Orange County DOE was in compliance with
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/ac
cc: Dean West, CPA, Associate Superintendent
Business Services
Orange County Department 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
Orange County Department 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
Orange County Department of Education Audit Resolution Process
Review Report
Summary
The State Controller’s Office (SCO) reviewed the Orange County
Department of Education’s (DOE) audit resolution process for local
education agency (LEA) exceptions noted in the annual audit reports for
fiscal year (FY) 2019-20 and FY 2020-21. Our review found that the
Orange County DOE followed its audit resolution process for FY 2019-20
and FY 2020-21.
Background Education Code section 41020(n) requires the SCO 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, Education Code section 41020(n) states that the SCO 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 Orange County DOE provides coordination of educational programs
and professional and financial supervision for 27 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
(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 (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 Education Code
section 42238.02, as implemented by section 42238.03, and
independent study (Education Code section 41020[j][1]);
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 (April 15, 2022, for
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Orange County Department of Education Audit Resolution Process
FY 2020-21 audit reports) of the subsequent year (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 (Education Code section 41020[j][3]);
By July 15 (June 15, 2022, for FY 2020-21 audit reports) 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 of 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
(Education Code sections 41020.9[b] and 41020.9[c]);
Review LEAs’ unresolved prior-year audit exceptions when the
California Department of Education defers to the county (Education
Code section 41020[l]); and
Adjust subsequent local property tax requirements to correct audit
exceptions relating to LEA tax rates and tax revenues (Education Code
section 41020[o]).
Objective, Scope, The objective of our review was limited to determining whether the
Orange County DOE followed its audit resolution process for resolving
and Methodology
LEA audit exceptions in a manner consistent with Education Code
section 41020. Our review did not include an evaluation of the sufficiency
of the action taken by the LEA and the Orange County DOE to address
each exception, nor did it assess the degree to which each exception was
addressed.
The review period was FY 2019-20 and FY 2020-21.
To achieve our objective, we performed the following procedures:
We verified that the Orange County DOE addressed all attendance,
inventory of equipment, internal control, and miscellaneous
exceptions. In addition, we verified that the Orange County DOE
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.
We verified that the Orange County DOE notified LEAs that they
must submit completed corrective action forms to the Orange County
DOE by March 15, 2021, and April 15, 2022, for FY 2019-20 and
FY 2020-21, respectively. Our review did not include an assessment
of the LEAs’ progress in taking corrective action.
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Orange County Department of Education Audit Resolution Process
We verified that the Orange County DOE required the LEAs to submit
the appropriate reporting forms to the SSPI for any attendance-related
exceptions that affected state funding.
We reviewed the letters of certification due on July 15, 2021, and
June 15, 2022, that the Orange County DOE sent to the SSPI and the
SCO regarding any resolved and unresolved audit exceptions.
We verified that the Orange County DOE followed up with unresolved
prior-year audit exceptions that the SSPI had required the Orange
County DOE to conduct.
We verified that the Orange County DOE 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 Education Code
section 41020(n).
Conclusion Our review found that the Orange County DOE followed its audit
resolution process for FY 2019-20 and FY 2020-21. As a result, the
Orange County DOE was in compliance with Education Code
section 41020 for FY 2019-20 and FY 2020-21. We made no additional
determination regarding Orange County DOE’s audit resolution process
beyond the scope of the review outlined above.
Views of We discussed our review results with Orange County DOE’s
Responsible representative during an exit conference conducted on January 3, 2023. At
Officials the exit conference, Orange County DOE’s representative agreed with our
review results.
Restricted Use This review report is intended solely for the information and use of the
Orange County DOE, 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
May 1, 2023
-3-
State Controller’s Office
Division of Audits
Post Office Box 942850
Sacramento, CA 94250
www.sco.ca.gov
S23-COE-9001