Recurring Findings

Community Colleges Chancellor's Office: Recurring Material Internal Control Deficiencies

Federal Program	Issue	First Year Reported
	Department's Assertion	Page Number
Career and Technical Education--Basic Grants to States	During our audit for fiscal year 2011-12, we reported that the California Community Colleges Chancellor’s Office (Chancellor’s Office) lacked adequate controls to monitor the use of federal awards through site visits, limited scope audits, or other means and did not review community college district OMB Circular A-133 audits for findings related to the Career and Technical Education (CTE) program. The Chancellor’s Office relied on its review of quarterly expenditure reports submitted by community college districts to determine if expenditures were allowable; however, those reports contained summarized data and did not include other support such as invoices or receipts. In response to the finding, in fiscal year 2012-13 the Chancellor’s Office developed a risk-based monitoring plan, including a selection process for site visits and desk reviews. However, no site visits, desk reviews or other monitoring procedures were performed in fiscal year 2012-13. In addition, we tested subrecipient OMB Circular A-133 reports and found that six of the 72 subrecipients had CTE program findings. The Chancellor’s Office did not issue management decisions within the required six months for these findings. Failure to properly monitor subrecipients increases the risk that Federal funds may be spent for unallowable purposes.	2011-12
	In response to the 2011-12 fiscal audit, the California Community Colleges made significant changes in their monitoring practices for the Carl D. Perkins federal awards. We implemented an A-133 audit monitoring and response system. All subrecipients that had CTE program findings were issued management decisions as all had complied and corrected their findings. However, it was not done within the required six months. A new shared file has been put in place with checks and balances to ensure that the subrecipients are issued management decisions within the required six months. Additionally, the California community colleges Chancellor’s Office developed a risk assessment monitoring tool and is implementing a new system. Division staff were trained over six sessions in monitoring the grants. At this time the Chancellor’s Office is implementing its corrective action plan by conducting site visits in accordance with its monitoring plan and issuing management decisions on subrecipient audit reports within the required time frame.	79