Linn-Mar Community School District's Use of Elementary and Secondary School Emergency Grant Funds (ED-OIG/F24CA0171)
Summary
A U.S. Department of Education Office of Inspector General flash report, ED-OIG/F24CA0171, dated September 27, 2024, on Linn-Mar Community School District's use of Elementary and Secondary School Emergency Relief (ESSER) grant funds, with a transmittal letter to Director McKenzie Snow of the Iowa Department of Education signed /s/ Ben C. Sanders. The report states that Linn-Mar was allocated approximately $7.2 million in ESSER funds. The OIG determined that all 20 (100 percent) expenditures it reviewed were allowable, and that Linn-Mar did not comply with key competitive procurement or documentation requirements for 6 (40 percent) of the 15 non-personnel expenditures, totaling $228,510 (49 percent) of the $466,572 reviewed. The OIG made two recommendations.
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- Issuer
- U.S. Department of Education, Office of Inspector General
- Document type
- Report
- Date
- 2024-09-27
Cite this document
“Linn-Mar Community School District's Use of Elementary and Secondary School Emergency Grant Funds (ED-OIG/F24CA0171).”
U.S. Department of Education, Office of Inspector General, dated 2024-09-27. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/linn-mar-community-school-district-esser/
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U.S. Department of Education
Office of Inspector General
Linn-Mar Community School
District’s Use of Elementary and
Secondary School Emergency
Grant Funds
September 27, 2024
ED-OIG/F24CA0171
FLASH REPORT
NOTICE
Statements that managerial practices need improvements, as well as other conclusions
and recommendations in this report, represent the opinions of the Office of Inspector
General. The appropriate Department of Education officials will determine what
corrective actions should be taken.
In accordance with Freedom of Information Act (Title 5, United States Code,
Section 552), reports that the Office of Inspector General issues are available to
members of the press and general public to the extent information they contain is not
subject to exemptions in the Act.
UNITED STATES DEPARTMENT OF EDUCATION
OFFICE OF INSPECTOR GENERAL
Audit Services
September 27, 2024
McKenzie Snow
Director
Iowa Department of Education
400 E 14th St
Des Moines, IA 50319
Dear Director Snow:
Enclosed is our final report, “Linn-Mar Community School District’s Use of Elementary and Secondary
School Emergency Grant Funds,” Control Number ED-OIG/F24CA0171. This report incorporates the
comments you provided in response to the draft report. The U.S. Department of Education’s policy is to
expedite audit resolution by timely acting on findings and recommendations. Therefore, if you have any
additional comments or information that you believe may have a bearing on the resolution of this flash
review, you should send them directly to the following Department of Education official, who will
consider them before taking final Departmental action on this review:
Adam Schott
Delegated the Authority to Perform the Functions and Duties of the Assistant Secretary
U.S. Department of Education
400 Maryland Avenue, SW
Washington, D.C. 20202
We appreciate your cooperation during this review. If you have any questions, please contact me at
(916) 213-7630 or Ben.Sanders@ed.gov.
Sincerely,
/s/
Ben C. Sanders
Regional Inspector General for Audit
Enclosure
400 MARYLAND AVENUE, S.W., WASHINGTON, DC 20202-1510
Promoting the efficiency, effectiveness, and integrity of the Department’s programs and operations.
U.S. Department of Education, Office of Inspector General
Results in Brief
Linn-Mar Community School District’s Use of Elementary
and Secondary School Emergency Relief Grant Funds
Why the OIG Performed What Did the OIG Find?
This Work We determined that all 20 (100 percent) ESSER expenditures that we reviewed for Linn-
Congress passed three coronavirus Mar were allowable. Allowable activities generally include those authorized by the
relief acts within a 1-year period that Elementary and Secondary Education Act, Individuals with Disabilities Education Act, Adult
provided more than $275 billion for Education and Family Literacy Act, Carl D. Perkins Career and Technical Education Act of
an Education Stabilization Fund to 2006, and subtitle B of title VII of the McKinney-Vento Homeless Assistance Act. It also
prevent, prepare for, and respond to includes activities listed in section A-3 of the U.S. Department of Education’s Frequently
the coronavirus, which the President Asked Questions document for the ESSER and Governor’s Emergency Education Relief
declared as a national emergency in Programs.
March 2020. This included
However, we found that Linn-Mar did not comply with key competitive procurement
$189.5 billion for Elementary and
process or documentation requirements at 2 Code of Federal Regulations sections
Secondary School Emergency Relief
200.318–320 when procuring the goods or services associated with 6 (40 percent) of the
(ESSER) funds intended to provide
15 non-personnel expenditures, totaling $228,510 (49 percent) of the $466,572 in non-
vital support to States, local
personnel expenditures reviewed. For these expenditures, Linn-Mar either did not use a
educational agencies, and schools to
competitive procurement process or failed to maintain documentation sufficient to
address the impact of the
support that a competitive procurement process was used.
coronavirus. Support, in part,
includes activities designed to help What Is the Impact?
students and educators safely return It is critical that Federal grantees (and subgrantees) use and document a competitive
to and sustain in-person instruction, procurement process when required to do so by Federal law or regulation. Without a
and that address the educational competitive process, Linn-Mar (and by extension, taxpayers) might have paid more for the
inequities exacerbated by the same goods and services when compared to other vendors.
coronavirus pandemic and students’
social, emotional, mental health, and
What Are the Next Steps?
academic needs. We made two recommendations to address the procurement issues that we identified to
ensure that ESSER funds are used, documented, and managed in accordance with
Ensuring that ESSER funds are used applicable Federal requirements.
for allowable purposes is critical to
help address the needs of students The Iowa Department of Education did not state whether it agreed or disagreed with our
and educators. The Linn-Mar recommendations, but requested that we review additional supporting documentation
Community School District provided by Linn-Mar to determine whether the district complied with applicable
(Linn-Mar) was allocated procurement and documentation requirements. Based on our review of that
approximately $7.2 million in ESSER documentation and further analysis of available information, we modified the finding and
funds. one recommendation in the report.
We performed this review to
determine whether Linn-Mar
expended ESSER grant funds for
allowable purposes in accordance
with applicable requirements.
Flash Report ED-OIG/F24CA0171
Purpose
The objective of the flash review was to determine whether the Linn-Mar Community
School District (Linn-Mar) expended Elementary and Secondary School Emergency Relief
(ESSER) 1 grant funds for allowable purposes in accordance with applicable
requirements. This flash review report presents the results of our review.
Linn-Mar Community School District
The Linn-Mar Community School District in Iowa is a local educational agency (LEA) in a
suburban setting with 12 schools serving about 7,700 students. Linn-Mar was allocated
approximately $7.2 million in ESSER funds and as of August 15, 2023, it had spent almost
all (close to 100 percent) of its $7.2 million ESSER allocation to address the impacts of
the coronavirus pandemic. In its approved American Rescue Plan Act (ARP) ESSER Plan,
Linn-Mar noted that it planned to use its ARP ESSER funds, in part, for interventionists,
counselors, teachers, summer school, mentoring, and curriculum resources; technology
(including online learning and internet access) and human resources support; and
coronavirus prevention and mitigation items, such as personal protection equipment
and cleaning supplies.
What We Did
We selected and reviewed 15 non-personnel and 5 personnel ESSER expenditures
(1 percent) from a total population of 1,591 expenditures for the period July 1, 2022,
through June 30, 2023 (review period). We used a judgmental, risk-based process to
select the 20 expenditures, which represented $543,066 (23 percent) of the $2,344,085
in total ESSER expenditures during our review period. Of the $543,066 reviewed,
$466,572 (86 percent) was non-personnel and $76,494 (14 percent) was personnel
expenditures.
We reviewed each expenditure to determine whether it was (1) connected to the
coronavirus pandemic (intended to prevent, prepare for or respond to the coronavirus
1
ESSER is one of multiple emergency relief funds comprising the Education Stabilization Fund, which
was first authorized and funded under the Coronavirus Aid, Relief, and Economic Security Act (March 27,
2020), and for which Congress later provided additional funding under the Coronavirus Response and
Relief Supplemental Appropriations Act (December 27, 2020) and the American Rescue Plan (March 11,
2021). Under ESSER, the U.S. Department of Education awarded grants to State educational agencies for
the purpose of providing local educational agencies with emergency relief funds to address the impacts
that the coronavirus pandemic had on elementary and secondary schools and their students.
U.S. Department of Education
Office of Inspector General
ED-OIG/F24CA0171 1
pandemic, including its impact on the social, emotional, mental health, and academic
needs of students); (2) an authorized use of ESSER funds under applicable law and
regulations; and (3) reasonable and necessary and otherwise permissible under the
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance, 2 Code of Federal Regulations (C.F.R.) part 200). We
also performed additional work, as needed, to determine whether Linn-Mar complied
with key Federal procurement requirements, specifically those covered under 2 C.F.R.
sections 200.320 (methods of procurement to be followed), 200.324 (contract cost and
price), and 200.327 (contract provisions), when procuring the goods or services
associated with each non-personnel expenditure. We interviewed Linn-Mar officials to
gain a basic understanding of how they used ESSER funds, and their processes for
approving and monitoring ESSER expenditures.
An LEA can use ESSER funds for any activity deemed allowable under section 18003(d) of
the Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136); section 313(d) of
the Coronavirus Response and Relief Supplemental Appropriations Act (P.L. 116-260);
and section 2001(e) of ARP (P.L. 117-2). These activities generally include any activity
authorized by the Elementary and Secondary Education Act, Individuals with Disabilities
Education Act, Adult Education and Family Literacy Act, Carl D. Perkins Career and
Technical Education Act of 2006, and subtitle B of title VII of the McKinney-Vento
Homeless Assistance Act; as well as those listed in section A-3 of the U.S. Department of
Education’s Frequently Asked Questions document for the ESSER and Governor’s
Emergency Education Relief Programs (May 2021, updated on December 7, 2022).
What We Found
We determined that all 20 (100 percent) expenditures that we reviewed for Linn-Mar
were allowable. These expenditures were generally for teacher salaries, professional
development, and licenses for online learning. They were connected to the coronavirus
pandemic and authorized uses of ESSER funds under applicable law and regulation.
However, we found that Linn-Mar did not comply with key competitive procurement
process or documentation requirements at 2 C.F.R. sections 200.318–320 when
procuring the goods and services associated with 6 (40 percent) of the 15 non-personnel
expenditures, totaling $228,510 (49 percent) of the $466,572 in non-personnel
expenditures reviewed.
The Uniform Guidance general procurement standards at 2 C.F.R. sections 200.318–320
require competitive processes for selecting vendors when purchases are over
U.S. Department of Education
Office of Inspector General
ED-OIG/F24CA0171 2
$10,000 (micro-purchase threshold). 2 For purchases between $10,000.01 and
$250,000 (simplified acquisition threshold), the procurement standards require that
price or rate quotations be obtained from an adequate number of qualified sources as
determined by the non-Federal entity. Formal procurement methods, which include
publicly soliciting prices from prospective vendors, are required for purchases over
$250,000. Additionally, the non-Federal entity must maintain records sufficient to detail
the history of the procurement, including but not limited to records documenting the
rationale for the procurement method used, vendor selection or rejection, and basis for
the contract price (2 C.F.R. section 200.318(i)).
Procurement Issues
For one expenditure, totaling $27,841 for library management system licenses, we could
not determine whether Linn-Mar obtained price or rate quotations from an adequate
number of sources as required by 2 C.F.R. section 200.320(a)(2) because Linn-Mar did
not provide us with the procurement history documentation needed to make that
determination. 3 Although he was not employed by Linn-Mar at the time this
expenditure was initially approved and therefore did not have firsthand knowledge,
Linn-Mar’s Chief Financial Officer told us that the expenditure was a recurring expense
that was initially approved more than 10 years ago. We requested but did not receive
from Linn-Mar documentation to support that it had obtained price or rate quotations
from an adequate number of sources prior to initially awarding the contract to the
vendor. Without this documentation, which should have been part of the procurement
history documentation maintained by Linn-Mar to comply with 2 C.F.R. section
200.318(i), we did not have the information needed to evaluate Linn-Mar’s compliance
with 2 C.F.R. section 200.320(a)(2).
For the other five expenditures, totaling $200,669 for educational technology and
materials, professional development, and a needs assessment, Linn-Mar used a
noncompetitive process to procure the goods and services. Each expenditure was
between $28,500 and $72,000; therefore, the procurement standards requiring a non-
2
If it meets certain conditions, the non-Federal entity can establish and self-certify a threshold higher
than the micro-purchase threshold, up to $50,000. It can also establish a threshold lower than the
simplified acquisition threshold, for purposes of requiring formal procurement activities. For this review,
we used the micro-purchase threshold of $10,000 and simplified acquisition threshold of $250,000
established under Federal regulation when assessing the LEA’s compliance with applicable Federal
procurement standards.
3
For purposes of evaluating Linn-Mar’s compliance with 2 C.F.R. section 200.320(a)(2), we considered
price or rate quotations from at least two vendors to be adequate.
U.S. Department of Education
Office of Inspector General
ED-OIG/F24CA0171 3
Federal entity (such as Linn-Mar) to obtain price or rate quotations from an adequate
number of qualified sources would apply. The Chief Financial Officer told us that Linn-
Mar did not use a competitive procurement process for these five expenditures because
the vendors were the only providers (sole source) of the desired services. Under 2 C.F.R.
section 200.320(c), there are specific circumstances in which noncompetitive
procurement can be used, with one circumstance being that the item is available only
from a single source. However, Linn-Mar did not maintain or provide us with
documentation to support that the services were available only from a single source.
It is critical that Federal grantees (and subgrantees) use and document a competitive
procurement process when required to do so by Federal law or regulation. According to
2 C.F.R. section 200.404, “a cost is reasonable if, in its nature and amount, it does not
exceed that which would be incurred by a prudent person under the circumstances
prevailing at the time the decision was made to incur the cost.” When determining the
reasonableness of a cost, a grantee (or subgrantee) must, in part, consider the market
prices for comparable goods or services. A competitive procurement process, in part,
helps ensure that grantees (and subgrantees) do not overpay for large purchases.
Without a competitive process, Linn-Mar (and by extension, taxpayers) might have paid
more for the same goods and services when compared to other vendors.
What We Recommend
We recommend that the Assistant Secretary for the Office of Elementary and Secondary
Education require the Iowa Department of Education (Iowa) to require Linn-Mar to—
1. Determine whether the $228,510 that Linn-Mar charged to the ESSER grant without
using a competitive procurement process or obtaining price or rate quotations from
an adequate number of vendors was reasonable when compared to the costs of
suitable alternatives, and if not, require appropriate corrective actions.
2. Ensure that LEA officials responsible for making and documenting purchasing
decisions receive sufficient training on Federal procurement requirements, including
those covered under 2 C.F.R. sections 200.318(i) and 200.320 (methods of
procurement to be followed).
Iowa’s Comments
Iowa did not state whether it agreed or disagreed with our recommendations. Iowa
forwarded supporting documentation from Linn-Mar, that the LEA noted was not
provided during our initial review, for the nine expenditures that were identified in the
draft report as having procurement issues. Iowa requested that we review that
documentation to determine whether Linn-Mar complied with applicable procurement
and documentation requirements under 2 C.F.R. section 200.320. We did not
U.S. Department of Education
Office of Inspector General
ED-OIG/F24CA0171 4
include at the end of this report the supporting documentation that Iowa included with
its comments because they were too voluminous. Copies of the documents are available
upon request.
OIG Response
We reviewed the supporting documentation that Iowa provided in response to the draft
report and further analyzed available information for the nine expenditures that were
identified in the draft report as having procurement issues. The additional
documentation supported the removal of three of the nine expenditures from the
finding. We removed those three expenditures from the finding, but did not make any
other changes to the report based on our review of the documentation for the other six
expenditures.
As noted in the report, for one expenditure totaling $27,841 for library management
system licenses, we requested but did not receive from Linn-Mar documentation to
support that it had obtained price or rate quotations from an adequate number of
sources prior to initially awarding the contract to the vendor. For the other five
expenditures totaling $200,669 for educational technology and materials, professional
development, and a needs assessment, Linn-Mar did not maintain or provide us with
documentation to support that the services were available only from a single source.
The documentation that Iowa forwarded in response to the draft report did not include
any new information to support that Linn-Mar had obtained price or rate quotations
from an adequate number of sources for the library management system licenses
expenditure or that the other five expenditures were available only from a single source.
Therefore, our conclusions regarding these six expenditures remain unchanged.
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Office of Inspector General
ED-OIG/F24CA0171 5
Appendix A. Scope and Methodology
Our review covered Linn-Mar’s ESSER expenditures from July 1, 2022, through June 30,
2023 (review period). We limited our internal control work to gaining a basic
understanding of how Linn-Mar’s accounting system was used to account for ESSER
funds and how to interpret accounting codes. We conducted our review remotely from
February 2024 through June 2024. We discussed the results of our review with Linn-Mar
and Iowa officials on June 26, 2024.
Sampling Methodology
To determine whether Linn-Mar expended ESSER grant funds for allowable purposes in
accordance with applicable requirements, we used a judgmental, risk-based process to
select 20 expenditures (1 percent) for review from a total population of
1,591 expenditures for the period July 1, 2022, through June 30, 2023. The selected
expenditures represented $543,066 (23 percent) of the $2,344,085 in total ESSER
expenditures during our review period. For purposes of selection, we first divided the
expenditures into two strata: personnel expenditures (totaling $1,450,926) and non-
personnel expenditures (totaling $893,159). We then selected expenditures as follows:
• From the personnel population, we judgmentally selected five expenditures,
totaling $76,494 (5 percent of total personnel expenditures). We selected the
three highest dollar transactions (each exceeded $20,000) and two additional
transactions based on a combination of dollar amount and employee position
description.
• From the non-personnel population, we judgmentally selected 15 expenditures,
totaling $466,572 (52 percent of total non-personnel population). We selected
the 10 highest dollar transactions (each exceeded $22,000) and 5 additional
transactions using 1 or more of the following criteria: High dollar amount,
unclear transaction description, reclassified transaction, transaction without a
listed vendor name, or duplicate amount.
The results of our testing apply only to the expenditures reviewed and cannot be
projected to the universe of ESSER expenditures.
Use of Computer-Processed Data
We relied, in part, on computer-processed data (LEA expenditure data) from Linn-Mar’s
accounting system. Linn-Mar provided us with a PDF of a report generated from its
accounting system that contained its ESSER expenditure data from July 1, 2022, through
June 30, 2023. We converted the PDF document to a spreadsheet for quicker review
and analysis. To assess the completeness of the expenditure data in the spreadsheet, we
compared total expenditures in the spreadsheet to total expenditures in the four
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Office of Inspector General
ED-OIG/F24CA0171 6
quarterly ESSER expenditure reports that Linn-Mar submitted to Iowa for our review
period. To assess the reliability of the expenditure data in the spreadsheet, we reviewed
supporting documentation, such as invoices, proof of payment, and payroll records (as
applicable), for the 20 expenditures covered by our review. We did not identify any
issues and concluded that the expenditure data in the spreadsheet were reliable for
their intended use.
Compliance with Standards
We conducted our work in accordance with OIG quality control standards and the
Council of the Inspectors General on Integrity and Efficiency’s “Quality Standards for
Federal Offices of Inspector General,” which require that we conduct our work with
integrity, objectivity, and independence. We believe that the information obtained
provides a reasonable basis for our conclusions.
U.S. Department of Education
Office of Inspector General
ED-OIG/F24CA0171 7
Appendix B. Acronyms and Abbreviations
ARP American Rescue Plan Act
C.F.R. Code of Federal Regulations
ESSER Elementary and Secondary School Emergency Relief
Iowa Iowa Department of Education
LEA local educational agency
Linn-Mar Linn-Mar Community School District
Uniform Guidance Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards
U.S. Department of Education
Office of Inspector General
ED-OIG/F24CA0171 8
Iowa Department of Education’s Comments
U.S. Department of Education
Office of Inspector General
ED-OIG/F24CA0171 9
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