The objectives of the audit were to determine whether the Kentucky Department of Education (Kentucky) had an adequate oversight process in place to ensure that (1) local educational agencies’ (LEA) American Rescue Plan (ARP) Elementary and Secondary School Emergency Relief (ESSER) plans met applicable requirements and (2) LEAs use ARP ESSER funds in accordance with applicable requirements and their approved LEA ARP ESSER plans.
Overall, we found that Kentucky had adequate processes to ensure that LEA ARP ESSER plans met applicable requirements. We also determined that the ARP ESSER plans for Warren County and Jefferson County met applicable requirements and that Kentucky was consistent in how it reviewed and approved the two plans. We did, however, find that Kentucky’s process for reviewing LEA ARP ESSER reimbursement requests should be documented and could be strengthened to provide additional assurance that LEAs use ARP ESSER funds for allowable purposes. Although Kentucky had been consistent in how it oversees LEAs’ use of ARP ESSER funds, it did not request a listing of expenditures or review any supporting documentation from LEAs as part of its review of LEA reimbursement requests. Without supporting documentation to verify that the expenditures are allowable and properly accounted for, there is an increased risk that Kentucky will not identify or become aware of significant compliance issues involving the ARP ESSER program. Additionally, Kentucky did not have written policies and procedures to guide personnel through the reimbursement process. Without documented processes for reviewing LEA reimbursement requests, Kentucky officials might not fully understand what is expected of them or what they should be reviewing. This could result in inconsistencies in how Kentucky personnel perform these reviews and missed opportunities to identify unallowable or questionable expenditures that should be analyzed more closely. Also, at the end of our fieldwork, Kentucky had designed but not yet started additional monitoring of selected LEAs based on their overall risk. After the exit conference, Kentucky provided us with written policies and procedures for its ARP ESSER monitoring process. We reviewed those policies and procedures and concluded that they were designed in a way that should enable Kentucky to identify and select high-risk LEAs for review and detect instances of noncompliance during monitoring reviews.
We made 3 recommendations for Kentucky to: (1) design and document procedures to guide Kentucky personnel through the LEA reimbursement request process; (2) design and incorporate into its documented procedures for reviewing LEA reimbursement requests, protocols to sample LEA expenditures charged to ARP ESSER and review supporting documentation to ensure that applicable Federal, State, and local requirements are met; and (3) implement its ARP ESSER monitoring policies and procedures, as designed, to provide additional assurance that LEAs use ARP ESSER funds in accordance with applicable requirements and their approved ARP ESSER plans.
Implementing Pandemic Relief Aid Laws
This was the second in our audit series involving this subject. See our work involving pandemic relief aid.