Performance Audit – Fiscal Years Ended June 30, 2022 and 2023

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Report Summary

Background

The Delaware Department of Education (DDOE) serves 19 school districts, also known as Local Education Agencies (LEAs), in the State of Delaware.  DDOE’s mission is to empower every learner with the highest quality education through shared leadership, innovative practices and exemplary services. Under State law DDOE is required to exercise general control and supervision over all public schools in the State. DDOE supports LEAs with resources, professional development, grant access and other administrative functions so that all Delaware students are ready for success in college, career, and life. DDOE develops regulations with input from staff and other stakeholders.

State funding received by LEAs is primarily based on the total enrollment of students, expressed in units, as of the last school day of September. Units are made up of a specific number of students based on grade and special education status. State funding is allocated to LEAs divided into the following categories:

• Division I (Salaries and Benefits)
• Division II (Energy and All Other Costs)
• Division III (Equalization).

In accordance with 14 Del. C. §1504, the Delaware Office of Auditor of Accounts (AOA) is directed to examine the number of authorized positions versus the number of actual positions a district has employed as part of the regular, annual audit review for all LEAs.

AOA and CPA firm Gunnip and Company, LLP cooperated to conduct a performance audit of the LEAs for fiscal years 2023 and 2022 to address certain objectives related to the review of unit counts (enrollment of pupils), the conversion of those unit counts into authorized positions (units of pupils) and, in turn, the allocation of those authorized positions to the corresponding State funding appropriation.

Key Information and Findings

AOA performed examinations of LEA compliance with faculty and staff positions authorized by the Delaware General Assembly for fiscal year 2019.  Fiscal Years 2020 and 2021 were COVID-19 pandemic years and not considered for audit as those LEAs faced numerous challenges in both enrollment and staffing.  AOA administered performance audits of the Unit Count and Authorized Positions processes for fiscal years 2022 (encompassing Unit Count data taken on September 30, 2021) and 2023 (encompassing Unit Count data taken on September 30, 2022).

The performance audit focused on the following objectives, and noted the following findings:

Unit Count Objective 1: Determine if the regular and special education Unit Count allotment earned by the LEAs were properly computed based on the underlying enrollment in accordance with 14 Del. C. §1704 (1) and processes promulgated by DDOE.

Findings:

• Five LEAs out of 10 selected were missing some supporting documentation regarding attendance or classification of students (regular and special education enrollments) during the unit count period.
• Many districts showed inconsistencies between the classroom attendance reports and the Full Student Register (FSR), a report completed by each individual school, where classroom attendance reports did not match the FSR. 

Unit Count Objective 2: Determine if the LEAs maintained proper IT access controls for the personnel who were provided access to the Unit Count Plus System. 

Findings:

• All 10 LEAs included in the sample had at least one former employee assigned a role in the Unit Count Plus system whose access was not removed upon termination of employment.

Authorized Positions Objective 1: Determine if the number of Authorized Position units allocated to the school district was properly computed based on 14 Del. C. §1703 (a) and the school district’s underlying support. 

Findings

• The authorized positions listed in DDOE’s entitlement report do not consistently match the account codes for those positions in the State’s general ledger.

Authorized Positions Objective 2: Determine if the LEAs exceeded their allocated number of Authorized Positions.

Findings:

• LEAs can use payroll funding adjustments at any time within a fiscal year to recode how authorized positions are funded. Compliance assessment of authorized positions should be done based on the entire fiscal year rather than at any one point in time.

Authorized Positions Objective 3: Review the LEAs’ internal controls over their management of allocated authorized positions on an ongoing basis.

Findings:

• There is no standard practice for models, staff listings and reconciliation processes to manage authorized positions across LEAs. Detailed processes and corresponding internal controls underlying individual LEA practices managing authorized positions are not formally documented.
• Managing authorized positions and the hundreds of millions of State General Fund dollars that fund them each year is a very complex and time-consuming process. This process is solely managed by the LEAs, often by one or a few individuals, and there is a lack of detailed oversight of this process outside of the LEA level.