Audit says district misused $145K in federal funds
HAMILTON » The Hamilton Township School District has improperly spent over $145,000 in federal funds and must refund the money back to the New Jersey treasury and submit a corrective action plan, according to a newly released audit.
The Hamilton school board on Wednesday evening was expected to discuss the audit and pass a resolution disputing some of the state’s findings. Katherine Attwood, the district’s business administrator and board secretary, has prepared an appeal letter disputing the first two findings on the audit, which identify about $144,000 of unallowable expenditures.
The audit, conducted by the New Jersey Department of Education’s Office of Fiscal Accountability and Compliance, analyzed how the Hamilton Township School District spent Title I federal funds from July 1, 2013, through June 30, 2014.
Title I funds are intended to benefit students from lowincome families and help ensure that all children meet challenging state academic standards, according to the U.S. Department of Education. The federal government gives Title I revenue to the states, and the states redistribute that money to local school districts such as Hamilton, which received about $1.77 million in Title I funds in fiscal year 2013-14.
In addition to disputing the first two findings on the audit, the Hamilton school board was expected to pass a resolution approving of the audit’s seven remaining findings and recommendations.
Audit findings
The most egregious misuse of Title I funds came from the district charging over $110,000 in payroll costs for two teachers who worked at non-Title I schools during the 2013-14 fiscal year, according to the audit.
“The audit disclosed that FY 2013-2014 Title I, Part A funds were improperly spent for ineligible personnel and students,” the audit report states. The district charged about $68,000 in connection with a teacher working at McGalliard Elementary and about $42,000 for another teacher working at University Heights Elementary despite those facilities not being Title I eligible schools, according to the audit.
The district also improperly spent over $29,000 in Title I funds on general supplies — tables, chairs and toys — and bus transportation to University Heights and Yardville elementary schools despite those facilities being two non-Title I schools, according to the audit.
To correct the aforementioned issues, the Hamilton school board “must ensure that Title I funds are expended for intended beneficiaries at eligible schools,” the audit recommends.
“Expenditures of $4,188.84 incurred and charged to the Title I grant supplanted local funding sources and therefore, are deemed to be unallowable program costs,” the audit states, adding that the district “must ensure that Title I program expenditures supplement, rather than supplant, state and local funds.”
Other findings in the audit revealed that payroll expenditures totaling $750 “were improperly charged to the Title I, Part A program” and that over $700 in expenditures on board games, advertising costs and a belt flag system “did not meet the intent and purpose of the Title I program.”
The district has already implemented corrective action on much of the transgressions cited in the audit, according to the district’s corrective action plan for Audit Findings 3-9.
Since July 2014, the district has taken steps to correctly set up accounts in personnel and payroll; the district has begun recording grant appropriations consistent with approved grants; the district now ensures that time and activity reports are completed for all federally funded employees; and the district is now ensuring that its budgetary system maintains records to enable an effective audit, among other corrective actions, according to the district’s corrective action plan that was expected to be discussed at Wednesday’s school board meeting.
Appeals process
If the nine-member Hamilton Township Board of Education passes a resolution disputing some of the state’s audit findings, then the board must submit a written request with any supporting documentation for the appeal within 10 days.
Robert J. Cicchino, director of the New Jersey Department of Education’s Office of Fiscal Accountability and Compliance, will issue a written decision on the district’s appeal if it reaches his desk.
If the school board is unsatisfied with Cicchino’s written decision, the board may file a subsequent appeal to the commissioner of the New Jersey Department of Education.
The school board on Wednesday was expected to pass a resolution disputing Audit Findings 1-2 under a roll call vote.
Notwithstanding the district’s expected appeal, the audit report states that the district must write a check made payable to “Treasurer, State of New Jersey” in the amount of $144,798.92 to be mailed with the corrective action plan. The audit report, however, did not correctly calculate the schedule of the recovery due to the state. The actual amount that Hamilton owes, according to the audit’s total findings, is $145,507.84.
If the district successfully appeals Audit Findings 1-2 and is determined to have properly spent those Title I funds, then the district would only be on the hook for refunding nearly $1,500 back to the state for its transgressions under Audit Findings 3-4.