Federal auditors critical of ARRA oversight in Wisconsin, Louisiana

Two final audit reports from the U.S. Department of Education on the use and internal controls of education money from the American Recovery and Reinvestment Act showed a lack of adequate monitoring and the need for greater oversight at the state level, according to a report posted Wednesday by the California Department of Education.

The subjects - the Louisiana Department of Education and the Wisconsin Department of Public Instruction - received similar warnings from the Office of the Inspector General at the USDOE but no recommendations on monetary penalties.

Use and control of the billions of dollars in federal stimulus money has been of keen concern to federal officials, not only for political reasons to show critics that the massive spending program resulted in job savings and protections - but also, especially for schools, that the money helped achieve some of the reform goals set by Congress in approving the funding.

In its report on Wisconsin, auditors criticized both the department of public instruction and the governor's office did not perform sufficient procedures to provide reasonable assurances that ARRA funds were used in accordance with applicable laws, regulations, and guidance," according to the CDE report.

In addition, the federal report said, State Fiscal Stabilization Fund dollars were not adequately tracked at the state and local educational agency level. Auditors pointed out that legislative directives approved by the governor before the distribution relaxed oversight provisions and led to inadequate instructions from state regulators to LEAs in accounting for and tracking SFSF funds.

The OIG said that the legislature and the governor's office instructed the state education department to distribute SFSF funds to LEAs expeditiously and to "fill the shortage in state general aid to LEAs," the report said.

"In doing so, DPI did not properly account for the two components of the SFSF program, and it reimbursed LEAs for expenditures based only on pools of cost categories without advising LEAs that the SFSF funds included in the payment must be tracked separately," the CDE reported. "Therefore, the governor's office and DPI did not properly account for and track the use of SFSF funds at both the State and LEA level in accordance with ARRA requirements."

In Louisiana, the OIG found that the governor's office of administration needs to perform reviews of its subrecipients to ensure compliance with ARRA regulations; and that the state's Department of Social Services lacks sufficient controls over tracking ARRA funds.

They said the Louisiana office needed to implement written procedures specifically designed to address the ARRA reporting requirements to ensure consistency and accuracy in future ARRA reporting (these procedures should include enforcing policies requiring LEAs to timely submit accurate reports and promptly notifying Department officials when material omissions or significant reporting errors are discovered in the reports).

They also suggest LEAS implement written procedures specifically designed to address ARRA reporting requirements to ensure consistency and accuracy in future ARRA reporting.

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