RCSD Audit Contract For Excellence

8/7/2019 RCSD Audit Contract For Excellence

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November 14,2008

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Contract for ExcellenceAudit Report


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Contract for ExcellenceIndex

Report Section Pages

Executive Summary 1

Summary of Recommendations 3

Observations, Recommendations and Action PlansFinancial AccountingMonitoring Program Costs and Accountability for OutcomesInconsistent Documentation for Class Size ReductionImproper Coding of Teacher SalaryTraining of Program ManagersInconsistent Monitoring of Reporting RequirementsOverall Monitoring and Oversight of ProgramCompliance with the Public ProcessChancery DataEfficient and Effective Spending of Contract For Excellence Funds

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Contract for ExcellenceExecutive Summary

OBJECTIVETo evaluate the operating control environment, policies, and compliance procedures in place for utilizing and monitoring Contract forExcellence (C4E) funding.BACKGROUNDNew York State legislation has established that a school district with at least one school identified as requiring academic progress, in need ofimprovement, in corrective action, or in restructuring status and receives an increase in Foundation Aid which is at least $15 million or 10%of the previous year's aid will be required to enter into a Contract for Excellence with the State that will govern how new Foundation Aidfunds are to be used. Legislation has established six categories for which the aid must be used. These categories are: class size reduction,pre-kindergarten and full-day kindergarten, middle school and high school restructuring, student time on task, teacher and principal qualityinitiative, and experimental programs. Funds are to be used to supplement and not supplant previous expenditures. Funds are to be used foreither continuation of existing programs, new or expanded programs. The 2007-08 year is to be used as the base year for future reporting.SCOPEWe reviewed recording systems used in producing information including manually produced schedules, proprietary software and otherdesktop tools. We will collaborate with the various key personnel to understand the current control environment. We will then test theoperating control environment and the pertinent financial information. We will document any issues noted and identify opportunities forimprovement found during our work and issue recommendations to improve the control environment. Management was asked to respond inwriting to our recommendations.CONCLUSIONThe Contract for Excellence (C4E) Audit identified the need for improved oversight, communication, recordkeeping for outcomes andmonitoring. Improvements are needed to provide consistent supporting documentation for program outcomes. Considerable work remainsnecessary to adequately support required financial and program benchmarking requirements for the 2007-08 base year. Unless soundstructures are created and put in place, it will be difficult to ascertain the level progress achieved in future years starting in 2008-09 usingC4E funds. Documentation standards must exist for Program managers including agreed upon methods for tracking financial informationand benchmarking performance by program. Accountability and monitoring for program goals must also occur to reach the desiredoutcomes.

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Contract for ExcellenceExecutive Summary

CONCLUSION (Continued)

We noted that the District has sufficient technology in place to maintain information required for financial monitoring and program tracking.However, additional efforts toward procedural aspects and standardization of recordkeeping are required to realize these benefits.PeopleSoft, the District's financial system is capable of financial tracking at a school level. Some C4E programs use PeopleS oft forfinancial monitoring at the school level, while others are using centralized tracking at a departmental level with manual allocations outsideof PeopleSoft. These financial recordkeeping processes should be revisited to ensure the quality and consistency of reporting.Chancery, the District's student management system is utilized for benchmarking some program goals. We noted that the informationcontained in the system does not yield consistent valid information for reporting purposes. This was further evidenced by the alternatemethods utilized to substantiate student related information that should be readily maintained in Chancery. Efforts should be made to ensurethat all individuals involved with Chancery data entry be given specific detailed standards for data entry. Also, Chancery data should bethoroughly reviewed and data inconsistencies corrected.The communication process for C4E is also in need of improvement. Internal communications were not detailed enough to facilitatecompliance with various C4E mandates. The public process lacks formalized procedures for open communication and public input,complaints, District response procedures, and clear information regarding programs and the related results. Generally, information is notclear and readily available for public review.C4E for 2007-08 has lacked the proper monitoring and oversight for tracking financial and program goals. Logistically, the implementationstrategy for C4E funds is fragmented in such small increments, it is difficult to track spending and achievement of program goals for C4Efunds separately from other funding sources for programs. The District plan for program based budgeting can facilitate C4E monitoring,however, to ensure success, program managers, principals, and service providers should be trained to fulfill their responsibilities forcompliance with program goals.



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Contract for ExcellenceObservations, Recommendations and Management Action Plans

Financial AccountingThe funds designated as Contract for Excellence are not consistently tracked by program and building in the PeopleSoft financialsystem. In reviewing the Budget or Commitment Control reports it was noted that funds designated as Contract for Excellence aretracked by program, but tracking at the building level is not always captured. Program administrators have a choice of selecting byschool (building) or a centralized budgeting process. Centralized budgeting captures the program and codes all expenses to a centraldepartment within that program. The responsibility for breaking the transactions into specific schools lies with the programadministrator. We are not using the system effectively to ensure proper recording.ALL programs within Contract for Excellence are required to be captured by program and by building. PeopleSoft is sophisticatedenough to track expenses by program and building but it is not utilized to its fullest extent. If the program requires a cost allocation, it would beadvantageous to allocate costs through the accounting system. Using the financial system will allow for consistent tracking of costs and helpfurther move the District toward School-based budget accountability. Utilization of PeopleS oft will also eliminate spreadsheets outside of thesystem and additional work required by the program directors when using the centralized budget option. Costs coded properly will allow forimmediate tracking of costs by program and school instead of recreating at the end of the year.

Although portions of the District's tracking ofC4E programs are completedby the use of spreadsheets this is necessary due to the calculations that are necessary in the use of District-wide allocations. C4E costsare tracked by program and school with the exception of shared costs such as District-wide contractual services, transportation andemployee benefits. Contractual services and transportation costs are allocated to the various programs and schools based upon thenumber of students participating in the programs, while employee benefits are al located to schools and programs based uponemployee staffing and earnings. The NYS Education Department has approved this methodology. The independent audit firm Freed,Maxick &Battaglia certif ied that our accounting structure meets C4E reporting guidelines in their 2007-08 independent audit of theDistrict. It should be noted that management is evaluating the use of the project costing package for the tracking of all programs.

Administration : No further action

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Monitoring Program Costs and Accountability for OutcomesAccountability for Contract for Excellence includes both a financial component and programmatic accountability. Documentation isnecessary to support the funds spent and the related outcomes. Accountability should be clearly established to ensure that programoutcomes and spending are aligned. Guidelines to identify the types of expenses included in the program and monitoring forcompliance are necessary. Program directors should participate in establishing the monitoring methodes) used for their respectiveprograms. They also should monitor expenditures based on their knowledge of where and how expenditures are used in the schools inconjunction with principals and teachers. Training and monitoring of program directors is necessary to successfully complete thistask.During the audit we noted some costs allocated to C4E that did not appear to be in alignment with program objectives. We wereunable to determine the cause for this inconsistency, however regular monitoring should have identified and corrected anymisalignment. The role of approving expenditures for programs should also include verification that the costs are in alignment withprogram goals.Procedures should be developed to periodically review expenditures to ensure that funds are spent in alignment with programexpectations. Procedures should also identify responsibility for corrections/adjustments. Program directors, principals, and teachersshould be informed of expected expenditures and held accountable for proper spending. A lack of appropriate monitoring could leadto disallowed costs in future periods.

Identify clear responsibility for accuracy of costs and program outcomes and develop procedures toperiodically reviewexpenditures for proper alignment with program expectations and compliance with approved costs.Management Responses: Measurement criteria and outcomes have been established for the various Contract for Excellenceprograms. This information has been communicated to the appropriate program managers to facilitate monitoring spending andrelated program outcomes. We will perform training and monitor as necessary throughout the year to ensure consistency andaccountability in Contract for Excellence initiatives.

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Inconsistent Documentation for Class Size ReductionDocumentation to support the benchmarking of programs was not readily available during the course of the audit for several of thetested programs. This was an existing program at the District that was folded into the Contract for Excellence and accounts for 25%of the funds. Several attempts were made to obtain information to analyze the progress made with these funds. Information requiredto track progress for this program would include the grade level, the number of classes, the average class size and the number ofclassroom teachers, support for 2006-07 and 2007-08 for comparative and documentation of reduction.Information should have been readily available from the Chancery system. Working first with IT and then later with Research,Evaluation and Testing, neither department could produce accurate information from Chancery. Research, Evaluation andTesting was able to obtain manually compiled information from the various schools. In addition, historical information is notavailable due to a system change and a problem with 2006-07 data.The base year for Contract for Excellence is the 2007-08 year. There is an immediate need to establish and document the progress for2007-08. A method of monitoring and benchmarking information for the past year should be established and be consistent with theinformation provided in the future years. The information must be monitored to ensure that the number of students in theseclassrooms does not exceed the K through 12teacher-student ratio targets prescribed by the Commissioner.

Develop a benchmarking system to track the necessary information for 2006-07, 2007-08, 2008-09 forward to support progressagainst goals for the reduction of class size throughout the District.Management Response: We have established a process for tracking progress on the class size reduction initiative. We will maintainanalysis to evaluate the annual progress for Contract for Excellence program goals and objectives. Analysis and documentation of thebaseline information from the 2007-08 school year has been completed. Now that baseline is completed, the tracking will be ongoing.Responsibility: Jeanette Silvers, Chief Accountability Officer Due Date: May 1,2009

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Improper Coding of Teacher SalaryIn two of the five programs audited it was noted that teachers charged to programs that they did not support. Since this hadcontinued all year it is apparent that there has been no monitoring of actual costs charged to a program throughout the budget year.In one of the programs it was noted that 8 teachers were coded to various schools which neither the program manager nor the leadteacher knew to be a part of the program. This same program was missing 12 teachers that were a part of the program but were notcharged to the program. In another program fourth and sixth grade teachers were coded to a program that was for grades K, 1 and 2.Salary coding should be monitored by the program directors on a regular basis. It would be a good practice to monitor employeesduring defined intervals in the school year.Starting in the 2008-09 school year C4E programs will require the payroll to be certi fied. This cer tification will ver ify that payrollcosts have been properly charged to the C4E program and the employee(s) worked on the program during the year. The Certificationmust be completed by an administrator responsible for supervising the employee performing the service.

Responsibility: John Scanlan, Deputy Superintendent, Administrat ion Due Date: Completed

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Training of Program ManagersDiscussions were held with various individuals that were responsible for the startup of the 2007-08 Contract for Excellence. TheChief of Staff, Director of Budgeting, and the various chiefs over the programs worked as a team to establish the programs andvarious components to be included as part of the Contract. Although time was spent to determine how funds would be allocated forthe State presentation. We identified little evidence to suggest appropriate leadership and communication throughout the year. Dueto the number of individuals responsible for tracking these costs, it is important that everyone be given a clear understanding offunds, established goals, and methods of benchmarking for success, monitoring and oversight of each program.With the changing economic environment at the State, and the accountability required for reporting of Contract for Excellence, thisrisk may increase. Each person directly and indirectly affected by the Contract for Excellence must understand their role and theimportance of accurate and consistent tracking from year to year. Additional and continual training is necessary for this to beaccomplished. The training should be a joint effort between financial, technology and program individuals to address that holisticperspective of monitoring and oversight.

Establish training, with continual support and aid, to ensure that program managers understand the tracking needs anddocumentation for the programs aspart of Contract for Excellence.Management Responses: We will meet with the appropriate Program Managers and other key stakeholders as a group to ensure thedocumentation requirements are understood and formalized. We will meet with Program Managers on a quarterly basis to ensurethat appropriate documentation is maintained to evaluate the programs.Responsibility: Jeanette Silvers, Chief Accountability Officer Due Date: May 1,2009



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Inconsistent Monitoring of Reporting RequirementsCommunication from the State Education Department concerning Contract for Excellence was delayed regarding C4E requirements.Expectations and compliance requirements gave Districts little time to meet deadlines. Several telephone calls were made toadministrators on the State level by District management to obtain clarification. Itis unclear if future requirements will becommunicated in a more clear and timely manner.At the end of our planned fieldwork, we noted on the SED website that a report of our actual expenditures was due September 1,2008. This information was brought to the attention of the Director of Budget. He was unaware of the reporting requirement.Various communications throughout the year had been provided to Districts and was readily available on the website. Althoughthere was not a significant amount of time to comply with SED expectations, procedures should exist to monitor reportingrequirements.Monitoring reporting requirements is important to meet compliance reporting deadlines. This should not be left to one individual. Aprocedure should be developed to include periodic monitoring of State &Grant requirements, especially of newly created programs.The monitoring procedure should include the development of a centralized calendar that would display all due dates of reports. Thecalendar should include individuals responsible for completion and oversight. An internal notification system should be developed asa part of this calendar to alert individuals as to the closeness of these dates.

The Office of Administration has developed a calendar that is maintainedon a Sharepoint site. The calendar includes the event, due date, and department/person responsible. The calendar will be updatedwith the most recent Contract for Excellence calendar. Internal due dates have been established to ensure compliance with Staterequirements. Oversight is conducted by the Comptroller and the Deputy Superintendent of Administration.Responsibility: John Scanlan, Deputy Superintendent, Administration Due Date: June 30, 2009

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Overall Monitoring and Oversight of ProgramOur testing identified many inconsistencies in monitoring programs. We noted in some cases, expectations were placed on Budgetstaff for compliance reporting. Many program managers assumed that the budget director and his staff were maintaining all facets ofC4E compliance. The actual expenditure report due at the end of the fiscal year contained many detailed reports and expectationsthat were not addressed until the end of the year. With the lack of consistent monitoring these reports became overwhelming whichincreases the risk for reporting errors. It is not clear if the final financial reports are monitored or reviewed for accuracy by anyoneother than the Budget Director. The District accountability for C4E funding, which highly stresses accountability, has not beenconsistent. The testing suggested that all program managers were not closely monitoring and benchmarking the programs. Trackingfor programs was scattered among areas, directors, and managers and there is no one central source or contact person that isproviding direction for the program compliance of C4E funds.Documentation should be completed to support the financial and program results for 2007-08. This information should be used as abaseline for comparison with 2008-09 tracking and monitoring of C4E funds. This information should be communicated to allparticipants of the program, including budget, chiefs, program managers, instructors, and principals. Allocation methods,benchmarks, budget reports, evaluation methods, and individuals responsible for each program should be clearly defined andcommunicated. Procedures should be developed to internally report progress of not only C4E funds, but other funding sources of theDistrict.



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~~~~::.2!~~:!!0.2n.2!se~s~: of all facets of the Contract for Excellence is under thedirection of the Deputy Superintendent of Administration and the Comptroller. A team has been developed to address the completionof financial and programmatic requirements. This team has been charged with the training of additional program and financialindividuals to ensure consistency in the reporting of information to the State. The team consists of key individuals from theAccountability Department that will work with the program portion of the Contract and Budget Department to ensure properfinancial reporting. A review process is in place that will allow for review of financial reports submitted by the Budget Directorbefore entry into the State software. A District-wide effort has been started to better monitor and benchmark all programs within theDistrict which will include C4E programs. Documentation and communication of requirements will be documented andcommunicated to program and financial individuals.Responsibility: John Scanlan, Deputy Superintendent, Administration Due Date: August 31,2009



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Compliance with the Public ProcessThe pubic process performed at the District did not align with the recommended dates and requirements from SED. Basicinformation was recently placed on the RCSD website for the 2008-09 budget. The information lacks sufficient detail to help thereader understand the dynamics of this program. The District has also not established a complaint process, or a procedure fordocumenting and answering public comments.The District public process should be clearly documented and communicated to the public. The process needs to include informationconcerning the financial and program benchmarking, description of the programs, input process from the public, compliant process,District response procedures, dates of meetings, and contact individuals. Information should be available our website and proceduresfollowed as stated by SED.

Responsibility: John Scanlan, Deputy Superintendent, Administration

Due Date: July I, 2009

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Chancery DataThroughout the audit, individuals spoke of the inconsistencies of data maintained in Chancery. This is the system that should be usedto support program benchmarks. While trying to veri fy numbers for Class Size Reduct ion, reports were requested from Chancery.The reports contained information that did not appear to be valid. An accurate and reliable data system must be available to supportstudent information for programs.

Chancery data should be accurate and confidence placed in the reporting from this system to support benchmarking of the District.Individuals should be trained in data entry and receive an understanding of how the information entered is used in reporting. Thereshould be a monitoring procedure in place to verify the reasonableness of the data provided by the system.

Perform an extensive analysis to verify the accuracy and validity of data reporting within Chancery. This should include but notlimited to the training of individuals for data entry, accuracy, usable reports, consistency of reporting and a monitoring procedureto verify reasonableness.Management Responses:The Office of Accountability has started performing analysis to resolve the data accuracy issues. The implementation of Datacationhas allowed the Office of Accountability staff to effectively analyze, identify, and coordinate corrections to Chancery data in theschools. Training and related documentation is being created as needed to facilitate consistent data entry in all District systems.Responsibility: Jeanette Silvers, Chief Accountability OfficerDue Date: Ongoing

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Efficient and Effective Spending of C4E FundsContract for Excellence requires reporting that identifies funding and related outcomes achieved through the programs funded. It isnot clear as to whether a global strategy has been clearly established for C4E. The State requirements directly connect the programsfunded with the outcomes achieved. Breaking funding into many small programs and through a variety of schools may not be themost efficient or effective spending ofC4E for financial or program benchmarking. Presently, the C4E portion of State Aid isbroken into 20 programs and across 57 schools. The funding is to support the neediest students. Spreading the funding across all ofour schools and somany different programs may not allow us to show much of a true impact on our student improvement. Trackingin so many different programs and schools is also not cost efficient and allows for many errors and inaccuracies.Management should consider spending the C4E funds across fewer programs and fewer schools. Larger amounts of funding in fewerareas will not only improve tracking and monitoring, but may allow for an increased impact on student improvement in the schoolsselected for the programs.

Evaluate funding sources of the District to concentrate C4E spending inprograms tofacilitate tracking of C4E spending.Management Responses: The Teaching and Learning organization is establishing the global strategies to align programs, includingContract for excellence with classroom instruction. We will evaluate the program outcomes and determine the most productive wayto effectively utilize Contract for excellence funding to achieve these desired outcomes. The program analysis is underway andprogram changes would not likely occur until the next school year.Responsibility: Marilynn Patterson-Grant, Deputy Superintendent, Teaching and LearningDue Date: October 1,2009

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RCSD Audit Contract For Excellence

Documents

Transcript of RCSD Audit Contract For Excellence