Education dollars: $3m in jeopardy after audit

Image courtesy of NHPR

New Hampshire may have to repay more than $3 million to the federal government, reported the Union Leader. An audit found that the state did not adequately monitor programs at the local level:

The federal government is not happy with how New Hampshire accounted for millions in educational grants since 2014, and could demand that some of the money be repaid, depending on the result of an audit to be conducted early next year.

“Our estimate is that a little more than $3 million is at risk,” Commissioner of Education Frank Edelblut said. “Obviously we know a good bit of that was spent correctly, but can we substantiate that? We don’t know what will be clawed back or not clawed back…”

In 2014, the U.S. Department of Education issued new guidance on how state education officials should account for the distribution of federal education dollars to local school districts. Several states, including New Hampshire, were audited to determine how they were complying.

The review concluded that the state did not adequately monitor federally funded programs at the local level or have accounting systems in place to ensure compliance with federal requirements by local school districts.

“This lack of fiscal oversight creates a significant risk that (local school districts) could mismanage federal programs, resulting in potential unallowable expenditures or instances of waste, fraud, or abuse,” according to the “Pilot Fiscal Review” from the federal Office of Elementary and Secondary Education.

The audit also found that the Department of Education did not follow federal guidelines for reporting on payments to staff for grant administration:

The department determined a fixed amount from each grant for administration in its annual budget, and deducted the funds accordingly, in violation of the federal guidelines.

“Part of this uniform guidance clearly established that all personnel expenditures must be supported by records that accurately reflect the work performed,” said Edelblut. “It clearly says that budget estimates alone do not support the charges.”

Each pay period, NHDOE would allocate the total salary charged for each employee to individual programs according to the pre-determined percentages, with no after-the-fact evaluation as to whether the charges accurately reflected the actual time worked by the employee on activities related to any single program.

Edelblut, a CPA with extensive background in financial management, has since changed the accounting method.

“Employees now keep track of the hours they work on programs; we charge the programs for the level of effort expended; and we support that with the underlying documentation for the time claimed,” he said.

Source: Education dollars: $3m in jeopardy after audit | Union Leader