Pasadena Unified School District Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures

PASADENA UNIFIED SCHOOL DISTRICT Audit Report PROPOSITION 47 SAFE NEIGHBORHOODS AND SCHOOLS FUND GRANT EXPENDITURES July 1, 2018, through December 31, 2021 M M. C ALIA OHEN C ALIFORNIA S TATE C ONTROLLER July 2024 MALIA M. COHEN CALIFORNIA STATE CONTROLLER July 24, 2024 Michelle Richardson Bailey, President Board of Education Pasadena Unified School District 351 S. Hudson Avenue Pasadena, CA 91109 Dear Ms. Bailey: This is the final report on our audit of the Pasadena Unified School District’s Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures for the period of July 1, 2018, through December 31, 2021. If you have any questions regarding this report, please contact Roochel Espilla, Chief, State Agency Audits Bureau by telephone at (916) 323-5744, or by email at respilla@sco.ca.gov. Sincerely, Original signed by Kimberly A. Tarvin, CPA Chief, Division of Audits KAT/ac MAILING ADDRESS P.O. Box 942850, Sacramento, CA 94250 SACRAMENTO 3301 C Street, Suite 700, Sacramento, CA 95816 | 916.324.8907 LOS ANGELES 901 Corporate Center Drive, Suite 200, Monterey Park, CA 91754 | 323.981.6802 Ms. Michelle Richardson Bailey July 24, 2024 Page 2 of 2 Copy: Kimberly Kenne, Vice President Board of Education Pasadena Unified School District Jennifer Hall Lee, Clerk Board of Education Pasadena Unified School District Patrick Cahalan, Member Board of Education Pasadena Unified School District Tina Fredericks, Member Board of Education Pasadena Unified School District Patrice Marshall McKenzie, Member Board of Education Pasadena Unified School District Yarma Velázquez, Ph.D, Member Board of Education Pasadena Unified School District Elizabeth J. Blanco, Ed.D, Interim Superintendent Pasadena Unified School District Julianne Reynoso, Ed.D, Assistant Superintendent Student Wellness and Support Services Pasadena Unified School District Kingsley Udo, Director Business Services Pasadena Unified School District Peter Callas, Director Career and College Transition Division California Department of Education Teri Alves, Education Programs Consultant Career and College Transition Division California Department of Education MAILING ADDRESS P.O. Box 942850, Sacramento, CA 94250 SACRAMENTO 3301 C Street, Suite 700, Sacramento, CA 95816 | 916.324.8907 LOS ANGELES 901 Corporate Center Drive, Suite 200, Monterey Park, CA 91754 | 323.981.6802 Pasadena Unified School District Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Contents Audit Report Summary ............................................................................................................................ 1 Background ........................................................................................................................ 1 Audit Authority .................................................................................................................. 2 Objective, Scope, and Methodology ................................................................................. 2 Conclusion .......................................................................................................................... 4 Follow-up on Prior Audit Findings .................................................................................. 4 Views of Responsible Officials .......................................................................................... 4 Restricted Use .................................................................................................................... 5 Schedule 1—Summary of Grant Awards, Amounts Disbursed and Expended, and Audit Adjustments .............................................................................. 6 Schedule 2—Summary of Program Costs............................................................................ 7 Pasadena Unified School District Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Audit Report Summary The State Controller’s Office (SCO) conducted a performance audit of Pasadena Unified School District’s (PUSD) Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures for the period of July 1, 2018, through December 31, 2021. The purpose of the audit was to ensure that program funds were disbursed and expended in accordance with program guidelines and grant requirements, as required by Government Code (GC) section 7599.2(c), and applicable laws and regulations. We verified that during the audit period, the California Department of Education (CDE) awarded PUSD with $1,760,000 from the Safe Neighborhoods and Schools Fund (SNSF) Grants Program. For the same period, PUSD’s Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures were $1,760,000. All costs were allowable (see Schedules 1 and 2). PUSD adequately accounted for its Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures, and ensured that its program funds were disbursed and expended in accordance with program guidelines and grant requirements, and as required by GC section 7599.2(c). Our audit did not disclose any findings. Background Proposition 47 – Safe Neighborhoods and Schools Fund On November 4, 2014, California voters approved Proposition 47, which reduces penalties for certain offenders convicted of non-serious and nonviolent property and drug crimes. It also allows some offenders to apply for reduced sentences. Proposition 47 established the Safe Neighborhoods and Schools Fund, which is funded by savings that accrue to the State from implementation of the measure. This mandate is expected to save significant state corrections dollars annually. Savings resulting from Proposition 47 are transferred to the Safe Neighborhoods and Schools Fund to be used in support of truancy reduction and drop-out prevention programs for public school pupils in grades K through 12, increase victim services grants, and support substance abuse and mental health treatment and diversion programs for people in the criminal justice system. Pasadena Unified School District PUSD, located in Los Angeles County, offers education to more than 15,000 students across 23 schools and programs. Services include preschool, elementary, middle, and high schools; and an alternative education program. Additionally, PUSD runs seven alternative school centers. In fiscal year (FY) 2018-19, the CDE awarded PUSD with $1,760,000 from the Proposition 47 SNSF Grants Program through a competitive -1- Pasadena Unified School District Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures bidding process. The funding period was from July 1, 2018, through June 30, 2021. PUSD used its grant to implement the Learning Communities for School Success Program (LCSSP), established by Assembly Bill 1014 (Statutes of 2016). LCSSP supports evidence-based, non-punitive education programs and practices to keep vulnerable students in school. All 23 PUSD schools and programs and seven alternative school centers received program services through LCSSP. Due to the COVID-19 pandemic, the CDE extended the program’s award end date from June 30, 2021, to December 31, 2021. The extension was communicated to the PUSD superintendent in March 2021. Audit Authority We conducted this audit in accordance with GC section 7599.2(c), which requires the SCO, every two years, to conduct an audit of the Proposition 47 SNSF Grants Program operated by the CDE to ensure that “the funds are disbursed and expended solely according to this chapter,” and to report its findings to the California State Legislature. In addition, GC section 12410 provides the SCO with general authority to audit the disbursement of state money for correctness, legality, and sufficient provisions of law for payment. Objective, Scope, Our audit objective was to ensure that PUSD adequately accounted for its Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures, and Methodology and that its program funds were disbursed and expended in accordance with program guidelines and grant requirements and as required by GC section 7599.2(c). The audit period was July 1, 2018, through December 31, 2021. To achieve our objective, we performed the following procedures: • We identified the Proposition 47 SNSF Grants Program background, criteria, purpose, and requirements by reviewing GC sections 7599 through 7599.2, and the California Department of Finance fund classification and basis for the Safe Neighborhoods and Schools Fund. • We reviewed PUSD’s Safe Neighborhoods and Schools Fund grant files, grant agreements, program guidelines, program requirements, and claimed invoices. • We reviewed PUSD’s claimed Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures; and performed analytical procedures and budgetary analysis to identify material cost components of each claim, any errors, and any unusual or unexpected variances. • We interviewed PUSD’s key personnel; completed internal control questionnaires; reviewed written internal policies and procedures; identified internal controls significant to the audit objective; and performed a limited walk-through of significant controls in order to gain a general understanding of PUSD’s internal controls related to the Proposition 47 SNSF Grants Program, such as accounting, -2- Pasadena Unified School District Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures timekeeping, procurement, and procedures performed by staff when preparing, reviewing and approving Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures, monitoring the Proposition 47 SNSF Grants Program, and recording disbursements and expenditures in PUSD’s financial management system. • We assessed PUSD’s internal controls related to the Proposition 47 SNSF Grants Program by reviewing policies and procedures, guidelines, grant agreements, contracts, expenditure reports, and supporting documents; and by conducting limited tests of the controls significant to the audit objective in order to determine whether the controls were functioning as intended, and whether PUSD was in compliance with written internal policies and procedures, and applicable provisions of laws, regulations, and established criteria. • We verified that the CDE awarded PUSD with $1,760,000 from the Proposition 47 SNSF Grants Programs. In addition, we verified that PUSD’s Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures were $1,760,000 ($236,975 in FY 2018-19, $628,822 in FY 2019-20, $650,485 in FY 2020-21, and $243,718 in FY 2021-22). • We conducted a risk assessment and reviewed internal controls for Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures to determine the nature, timing, and extent of substantive testing. • To reduce audit risk, we tested sample transactions, traced those transactions to supporting documentation, and performed analytical procedures and budgetary analysis: o We used a judgmental (non-statistical) sampling approach to select samples that supported our audit conclusions, and to ensure that the samples selected were representative of the population and provided sufficient, appropriate evidence; and o We also tested compliance with applicable laws, regulations, internal policies and procedures, and program requirements. Our audit procedures included interviewing appropriate personnel and inspecting documents, records, and grant agreements. • We tested 13% of $1,760,000 claimed by PUSD. The amount tested totaled $230,505, and was selected from four cost categories as follows: o Certificated and classified salaries – We tested $48,870 (6%) of $785,422. o Computer technology-related services – We tested $39,999 (45%) of $89,048. o Consultant and contractor services – We tested $46,800 (20%) of $235,576. o Indirect costs – We tested $94,836 (100%). Errors found, if any, were not projected to the intended (total) population. • We assessed the reliability of computer-processed data for Proposition 47 Safe Neighborhoods and Schools Fund grant -3- Pasadena Unified School District Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures expenditures by interviewing PUSD officials knowledgeable about the data; reviewing existing information about the data and the system that produced it; and tracing data to source documents, based on judgmental sampling. We determined that the data was sufficiently reliable for the purposes of this report. We did not examine the information-system controls or the economy, efficiency, or effectiveness of the program. Our audit of the program was related solely to program expenditures as required by GC section 7599.2(c). We did not audit PUSD’s financial statements. We limited our audit scope to planning and performing audit procedures necessary to achieve our audit objective. In addition, our review of internal control was limited to gaining an understanding of the transaction flows and financial- management accounting system, and performing limited tests of controls regarding PUSD’s ability to accumulate and segregate reasonable and allowable program costs. We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the evidence we obtained provides a reasonable basis for our findings and conclusions based on our audit objective. Conclusion We verified that during the period of July 1, 2018, through December 31, 2021, the CDE awarded PUSD with $1,760,000 from the Proposition 47 SNSF Grants Program. Our audit found that PUSD adequately accounted for its Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures; and ensured that its program funds were disbursed and expended in accordance with program guidelines and grant requirements, and as required by GC section 7599.2(c). Our audit did not disclose any findings. Follow-up on We have not previously conducted an audit of PUSD’s Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures. Prior Audit Findings Views of We shared our audit results with PUSD representatives via email dated May 4, 2023. A PUSD representative responded via email dated May 5, Responsible 2023, agreeing with the audit results. Officials -4- Pasadena Unified School District Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Restricted Use This audit report is intended solely for the information and use of PUSD, the CDE, 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 intended to limit distribution of this audit 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 July 24, 2024 -5- Pasadena Unified School District Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Schedule 1— Summary of Grant Awards, Amounts Disbursed and Expended, and Audit Adjustments July 1, 2018, through December 31, 2021 The following table summarizes the grant award, the amounts disbursed and expended during the audit period, and the audit adjustment. All monetary amounts are rounded to the nearest whole dollar. -6- F G is c a 2 0 1 2 0 1 2 0 2 2 0 2 r a n l Y e a r 8 - 1 9 9 - 2 0 0 - 2 1 1 - 2 2 d t o t a l G r a n t A m o u n t A w a r d e d $ 1 ,7 6 0 ,0 0 0 - - - $ 1 ,7 6 0 ,0 0 0 G r a n t A m o u n t D is b u r s e d $ 5 8 6 ,6 6 7 5 8 6 ,6 6 7 5 8 6 ,6 6 6 - $ 1 ,7 6 0 ,0 0 0 G r a n t A E x p e $ 2 6 6 2 $ 1 ,7 mn d 3 6 2 8 5 0 4 3 6 0 o u n t e d ,9 7 5 ,8 2 2 ,4 8 5 ,7 1 8 ,0 0 0 A m o u n t A llo w a b le p e A u d it $ 2 3 6 ,9 7 6 2 8 ,8 2 6 5 0 ,4 8 2 4 3 ,7 1 $ 1 ,7 6 0 ,0 0 r 5258 0 A u d it A d ju s tm e n t $ - - - - $ - Pasadena Unified School District Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Schedule 2— Summary of Program Costs July 1, 2018, through December 31, 2021 The following table summarizes the grant amounts expended, the amounts allowable per our audit, and the audit adjustment. All monetary amounts are rounded to the nearest whole dollar. Grant Amount Amount Allowable Audit Cost Element Expended per Audit Adjustment July 1, 2018, through June 30, 2019 Direct costs: Certificated salaries $ 5,402 $ 5,402 $ - Classified salaries 47,248 47,248 - Employee benefits 32,496 32,496 - Materials and supplies 6,053 6,053 - Mileage and car allowances 850 850 - Travel and conferences 231 231 - Contracted services - - - Computer technology-related services 28,350 28,350 - Consultant and contractor services 46,800 46,800 - Subagreements for services 56,000 56,000 - Total direct costs 223,430 223,430 Total indirect costs 13,545 13,545 Total program costs $ 236,975 $ 236,975 $ - July 1, 2019, through June 30, 2020 Direct costs: Certificated salaries $ 142,627 $ 142,627 $ - Classified salaries 155,140 155,140 - Employee benefits 133,825 133,825 - Materials and supplies - - - Mileage and car allowances 1,200 1,200 - Travel and conferences - - - Contracted services - - - Computer technology-related services 20,699 20,699 - Consultant and contractor services 78,699 78,699 - Subagreements for services 68,000 68,000 - Total direct costs 600,190 600,190 Total indirect costs 28,632 28,632 Total program costs $ 628,822 $ 628,822 $ - -7- Pasadena Unified School District Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Schedule 2 (Continued) Grant Amount Amount Allowable Audit Cost Element Expended per Audit Adjustment July 1, 2020, through June 30, 2021 Direct costs: Certificated salaries $ 151,431 $ 151,431 $ - Classified salaries 189,195 189,195 - Employee benefits 163,936 163,936 - Materials and supplies - - - Mileage and car allowances 1,200 1,200 - Travel and conferences - - - Contracted services 300 300 - Computer technology-related services - - - Consultant and contractor services 60,077 60,077 - Subagreements for services 48,000 48,000 - Total direct costs 614,139 614,139 Total indirect costs 36,346 36,346 Total program costs $ 650,485 $ 650,485 $ - July 1, 2021, through December 31, 2021 Direct costs: Certificated salaries $ 42,463 $ 42,463 $ - Classified salaries 51,916 51,916 - Employee benefits 42,727 42,727 - Materials and supplies - - - Mileage and car allowances 300 300 - Travel and conferences - - - Contracted services - - - Computer technology-related services 39,999 39,999 - Consultant and contractor services 50,000 50,000 - Subagreements for services - - - Total direct costs 227,405 227,405 Total indirect costs 16,313 16,313 Total program costs $ 243,718 $ 243,718 $ - -8- State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, CA 94250 www.sco.ca.gov S22-P47-0002