Full text
U.S. Department of Education
Office of Inspector General
Oklahoma’s Administration of the
Governor’s Emergency Education
Relief Fund Grant
July 18, 2022
ED-OIG/A20GA0011
ED OIG Oversight of Coronavirus Response Funds
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
July 18, 2022
The Honorable J. Kevin Stitt
Governor, State of Oklahoma
Oklahoma State Capitol
2300 N Lincoln Blvd.
Oklahoma City, Oklahoma 73105
Dear Governor Stitt:
Enclosed is our final audit report, “Oklahoma’s Administration of the Governor’s Emergency Education
Relief Fund Grant,” Control Number ED-OIG/A20GA0011. This report incorporates the comments you
provided in response to the draft report. If you have any additional comments or information that you
believe may have a bearing on the resolution of this audit, you should send them directly to the
following Department of Education official, who will consider them before taking final Departmental
action on this audit:
Mark Washington
Deputy Assistant Secretary
Office of Administration
U.S. Department of Education
400 Maryland Ave. SW
Washington, D.C. 20202
The U.S. Department of Education’s policy is to expedite audit resolution by timely acting on findings
and recommendations. Therefore, if you have additional comments, we would appreciate receiving
them within 30 days.
Sincerely,
/s/
Selina Boyd
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.
Table of Contents
Results in Brief ..................................................................................................................... 1
Introduction ......................................................................................................................... 9
Finding 1. Oklahoma Did Not Award All of its GEER Grant Funds to Entities in Accordance
with the CARES Act, Federal Regulations, and Grant Conditions ......................................15
Finding 2. Oklahoma’s GEER Fund Monitoring Process Should Be Strengthened ............31
Finding 3. Oklahoma Did Not Follow Cash Management Regulations ..............................42
Appendix A. Scope and Methodology ...............................................................................49
Appendix B. Unallowable Bridge the Gap Purchases by Keyword ....................................58
Appendix C. Acronyms and Abbreviations ........................................................................60
Appendix D. Oklahoma’s Comments .................................................................................61
Results in Brief
What We Did
The objectives of the audit were to determine whether the State of Oklahoma
(Oklahoma) designed and implemented awarding processes that ensured that the
Governor's Emergency Education Relief Fund (GEER grant) was used to support local
educational agencies (LEA) and institutions of higher education (IHE) that were most
significantly impacted by the coronavirus or LEAs, IHEs, or other education-related
entities within the State that were deemed essential for carrying out emergency
educational services; and monitoring processes to ensure that subgrantees used GEER
grant funds in accordance with the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act) and other applicable Federal requirements. 1 Our review covered the first of
two GEER grants that Oklahoma received, including the processes that it used to award
and monitor GEER grant funds, from March 13, 2020, through August 26, 2021.
To accomplish our objectives, we reviewed relevant Federal laws, regulations, and
guidance. We assessed Oklahoma’s awarding process for the five initiatives2 it funded
with the GEER grant, including Oklahoma’s methodology for identifying LEAs and IHEs
that were most significantly impacted by the coronavirus, and its methodology for
identifying LEAs, IHEs, or other education-related entities within the State that it
deemed essential for carrying out emergency educational services. To assess
Oklahoma’s awarding process, we interviewed Oklahoma officials and entities that were
awarded GEER grant funds; reviewed samples of applications from eligible entities or
individuals for three of the five initiatives that Oklahoma funded to determine whether
the entities that were awarded GEER grant funds followed the established award
processes; reviewed contracts that Oklahoma awarded using GEER grant funds to
determine whether funds were awarded to education-related entities within the State
that were deemed essential for carrying out emergency educational services, and to
determine whether Oklahoma followed its procurement policies and procedures; and
reviewed Oklahoma’s drawdowns from the U.S. Department of Education’s
1 The CARES Act authorizes Governors to provide grants to LEAs and IHEs within their jurisdiction that
have been most significantly impacted by coronavirus, and to use funds to provide support to other
LEAs, IHEs, and other education-related entities that the Governor deems essential for carrying out
emergency educational services, providing childcare and early childhood education, providing social and
emotional support, and protecting education-related jobs.
2
The five initiatives are the CARES Act Incentive Grants, Learn Anywhere Oklahoma, Bridge the Gap
Digital Wallet, Stay in School Fund, and Skills to Rebuild.
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(Department) G5 grants management system to determine whether Oklahoma
complied with cash management requirements.
We also assessed Oklahoma’s processes for monitoring the entities to which it awarded
GEER grant funds. Our assessment included a review of the monitoring plan Oklahoma’s
State Department of Education (OSDE) used to monitor LEAs that received GEER grant
funds for Oklahoma’s CARES Act Incentive Grants initiative, and a review of the
monitoring processes Oklahoma used to monitor the other four GEER grant initiatives.
We also reviewed a sample of expenditures from the Bridge the Gap and Stay in School
Fund initiatives to determine whether recipients used the GEER grant funds for
allowable purposes.3
What We Found
Oklahoma did not award all of its GEER grant funds in accordance with the CARES Act,
Federal regulations, Department guidance, and GEER grant conditions as discussed in
the findings below and the specific sections in this report.
Grant Awards
For four of the five initiatives that Oklahoma funded with its GEER grant (Skills to
Rebuild, Learn Anywhere Oklahoma, Bridge the Gap Digital Wallet (Bridge the Gap), and
Stay in School Fund), Oklahoma could not support its stated processes for awarding
funds to eligible entities that were either most significantly impacted by the
coronavirus, as determined by the State, or deemed essential for carrying out
emergency educational services, providing childcare and early childhood education,
providing social and emotional support, or protecting education-related jobs. As a
result, Oklahoma lacks assurance that its awards to three entities under these
initiatives—totaling $31 million of the State’s $39.9 million GEER grant—aligned with
the purpose of the GEER grant fund. However, for the fifth initiative (CARES Act
Incentive Grants), OSDE designed and implemented an awarding process that ensured
3 We did not review a sample of expenditures for allowability for two of the three other initiatives
because we determined that the risk of an unallowable use of funds was low because of how the funds
were used. Learn Anywhere Oklahoma funds were used to purchase digital curriculum. Skills to Rebuild
funds were used to provide tuition waivers. For the third initiative (CARES Act Incentive Grants), we
found that OSDE had reimbursement procedures and planned monitoring controls in place to mitigate
the risk of unallowable expenditures.
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$8 million of its $39.9 million4 GEER grant was used to support LEAs that were most
significantly impacted by the coronavirus, as determined by the State. We also found
that the coronavirus areas of impact5 that OSDE included in its award process for this
initiative aligned with the purpose of the CARES Act to support LEAs most significantly
impacted by coronavirus.
In awarding GEER grant funds to entities for all five of its initiatives, Oklahoma did not
adhere to Federal requirements for pass-through entities to clearly identify subawards
to subrecipients and to provide those subrecipients with certain required information at
the time of the subawards. This creates an increased risk of subrecipients not using
GEER grant funds in accordance with Federal statutes and the terms and conditions of
the GEER grant award.
We tested the process that OSDE established to award grant funds to LEAs for the
CARES Act Incentive Grants, and the process that Oklahoma established to award grant
funds to applicants for the Bridge the Gap and Stay in School Fund initiatives.6 For these
three initiatives, we found that, in general, the entities responsible for the initiatives
(OSDE and ClassWallet 7) adhered to OSDE and Oklahoma’s established award processes;
however, one of Oklahoma’s GEER grant contractors did not require its subcontractor to
adhere to Federal record retention requirements. This resulted in us not being able to
fully confirm the eligibility of 8 of the 10 students we sampled for the Stay in School
Fund initiative. Without documentation to confirm the eligibility of recipients of GEER
grant funds, Oklahoma does not have assurance that the recipients were those the GEER
grant was intended to serve.
In awarding GEER grant funds to one of its contractors, Oklahoma followed provisions in
its procurement laws that enabled the Chief Information Officer (CIO) to deviate from
4 Oklahoma did not award $919,354 of its $39.9 million GEER grant award for the initial round of awards.
Oklahoma returned the funds to the Department in February 2021.
5 Some examples of the areas of impact that OSDE included in its award process for the initiative
included expanding students’ connectivity for distance learning and providing teacher training on
reading instruction, with a specific focus on doing so in a remote environment.
6 We did not review the award process for the other two initiatives (Learn Anywhere Oklahoma and
Skills to Rebuild) because we determined that the risk of an improper award was low because neither
initiative had eligibility requirements.
7
ClassWallet operates an online digital wallet payment platform and an e-commerce marketplace that
facilitates payments to families and teachers and enables them to spend funds in an online marketplace.
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competitive bidding for certain types of information technology contracts. Although we
found that Oklahoma also had a policy that granted the CIO the ability to deviate from
procurement rules when “circumstances warrant,” Oklahoma has not established any
written policies and procedures dictating the specific circumstances under which such
deviations would be warranted, procedures to follow in such cases, or minimum
documentation requirements. As a result, there is a greater possibility of contractual
awarding decisions not being adequately supported, which provides for less
transparency into the process and could increase the risk of fraud, waste, and abuse.
(Finding 1 of this report)
Monitoring Processes
The monitoring processes Oklahoma designed and implemented to ensure that
subgrantees used GEER grant funds in accordance with the CARES Act and other
applicable Federal requirements for four initiatives (Skills to Rebuild, Learn Anywhere
Oklahoma, Bridge the Gap, and Stay in School Fund) of the five it funded with the GEER
grant need strengthening. Specifically, Oklahoma did not develop any written
monitoring policies and procedures and conducted only limited monitoring activities.
Oklahoma’s monitoring consisted primarily of its review of weekly status reports and
expenditures for each initiative but did not include a review of supporting
documentation for information contained in the reports or for the expenditures. In
addition, Oklahoma did not have any monitoring controls in place to prevent the Bridge
the Gap purchases we identified in our testing as items that did not appear to be
education-related. Specifically, out of the $6,126,614 in Bridge the Gap purchases made
by parents, $652,720 (11 percent) of the purchases were for items that did not appear
to be education-related, such as televisions, air conditioners, and Christmas trees.
For the fifth initiative (the CARES Act Incentive Grants initiative), OSDE designed and
implemented a monitoring process for its LEAs that provided reasonable assurance that
the GEER grant funds were used in accordance with the CARES Act and other Federal
requirements. Specifically, OSDE developed a written monitoring plan and a
reimbursement process to ensure the funds were being used for allowable purposes.
(Finding 2 of this report)
Cash Management
Oklahoma did not follow cash management requirements. Specifically, Oklahoma drew
down its entire GEER grant award but did not have an immediate cash need for the
funds at the time of the draw down and did not minimize the amount of time between
the drawdown and disbursal of the funds to subrecipients. Drawing down an excessive
amount of funds without an immediate cash need increases the risk of mismanagement
of the funds. (Finding 3 of this report)
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What We Recommend
We recommend that the Assistant Secretary for the Office of Elementary and Secondary
Education require the Governor of Oklahoma to—
• provide documentation, or a full and detailed written explanation, of the
process Oklahoma used to determine the initiatives it supported with GEER
grant funds and the entities it selected to administer the initiatives
(Recommendation 1.1);
• develop and implement a process to ensure that it documents the criteria and
decisions made for awarding future GEER grant funds in accordance with
applicable requirements (Recommendation 1.2);
• develop and implement internal controls to ensure that
o Oklahoma administers current and future GEER grants and retains records in
accordance with applicable Federal regulations and grant requirements
(Recommendation 1.3);
o monitoring procedures are documented and include a protocol for
reviewing supporting documentation for GEER grant expenditures and for
information in GEER grant initiatives’ weekly status reports
(Recommendation 2.3); and
o Oklahoma’s State agencies that receive Federal funds have written cash
management policies and procedures (Recommendation 3.1);
• Develop and implement written policies and procedures to describe the specific
circumstances under which deviations from procurement rules are warranted,
including procedures about required documentation of such decisions for
procurements that do not use competitive bidding but use Federal education
funds (Recommendation 1.5);
• perform a 100-percent review, or review a statistical sample, of the Stay in
School Fund microgrant recipients to confirm that all students were eligible to
receive GEER grant funds (Recommendation 1.4);
• return $652,720 in questionable Bridge the Gap expenditures or provide
documentation to show that the expenditures are education-related or that the
items were purchased with personal funds (Recommendation 2.1); and
• perform a 100-percent review, or review a statistical sample, of the
$5,473,894 in Bridge the Gap expenditures that we did not review, to determine
whether the expenditures were allowable, and if applicable, return the funds for
any unallowable expenditures to the Department (Recommendation 2.2).
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Oklahoma Comments and Our Response
We provided a draft of this report to Oklahoma for comment. We summarize
Oklahoma’s comments at the end of each finding and provide the full text of the
comments at the end of the report.
Oklahoma Comments
Oklahoma did not state whether it agreed or disagreed with the findings and
recommendations in the draft report. However, Oklahoma identified corrective actions
that it has taken or plans to take.
In response to Finding 1, Oklahoma stated that it fulfilled its responsibility to use its
GEER grant funds as Congress intended, and that the “alleged lack of documentation
means … that there was, perhaps, a lack of assurance, ‘which also provides for less
transparency … which could potentially increase the risk of fraud and abuse.’” In its
response, Oklahoma explained that corrective actions were underway. Oklahoma stated
that it has tasked its Office of Grants Management, and, specifically, the Director of
Grants Management, with oversight of the GEER grant program and other Federal grant
funds, and that it has created a steering committee team to oversee its processes and to
make recommendations and provide documentation regarding any future awards (GEER
or otherwise). Oklahoma also stated that it has created and instituted an evaluation
rubric to ensure the State makes the best choices regarding Federal grant funds and
their intended purpose, and that it has published Federal grant fund competitive bidding
guidance.8 Additionally, Oklahoma stated that it was in the process of creating a Grant
Agreement template for grant recipients and their subrecipients, and a Uniform
Guidance for Grants Information document for distribution to entities being awarded
Federal funds. Oklahoma subsequently provided the Grant Agreement template.
In response to Finding 2, Oklahoma stated that it is making efforts to update and
improve its processes and policies related to the administration and monitoring of its
GEER grant funds and other Federal funds to ensure proper internal controls are in place
and Federal laws and regulations are followed. Oklahoma also stated that it plans to
work with entities to ensure compliance with oversight and reporting requirements.
Oklahoma stated that the updated policies and procedures would be completed on or
before November 1, 2022, and subsequently provided the updated policies and
procedures. Regarding our assertion that Oklahoma lacked monitoring controls over the
Bridge the Gap initiative, Oklahoma stated that it was working in a “high-pressure
environment,” and that it had acted in good faith regarding its Bridge the Gap initiative;
8
Oklahoma provided us with copies of its evaluation rubric and competitive bidding guidance.
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but, to the extent that any deficiencies exist regarding the Bridge the Gap initiative,
Oklahoma stated that they are wholly attributable to its contractor, ClassWallet, which
provided assurance that its digital wallet platform would protect the State against
potential fraud.
In response to Finding 3, Oklahoma stated that it takes cash management terms and
conditions seriously, but that it was processing its GEER grant funds during an
emergency (global pandemic). Nonetheless, Oklahoma stated that it has begun
implementing new processes and policies reflective of the recommendations in the
draft report, that will be fully implemented on or before November 1, 2022. Oklahoma
subsequently provided policies and procedures that included a section on cash
management.
OIG Response
Oklahoma’s proposed corrective actions, if properly implemented to ensure compliance
with applicable laws and grant requirements for future Federal funds, are responsive to
three of the five recommendations relating to Finding 1 (Recommendations 1.2, 1.3, and
1.5), two of the four recommendations relating to Finding 2 (Recommendations 2.3 and
2.4), and three of the four recommendations relating to Finding 3 (Recommendations
3.1, 3.3, and 3.4). Specifically, the updated policies and procedures and other
information that Oklahoma provided subsequent to its response appear to address the
issues covered in these recommendations. However, its proposed corrective actions and
updated policies and procedures are not responsive to the remaining two
recommendations relating to Finding 1 (Recommendations 1.1 and 1.4), the remaining
two recommendations relating to Finding 2 (Recommendations 2.1 and 2.2), and
Recommendation 3.2.
Specifically, Oklahoma did not propose actions that address our recommendations that
it provide documentation or a detailed written explanation of the GEER grant award
process that it used, perform a review of Stay in School Fund microgrant recipients and
confirm that all students were eligible to receive funds, return funds or provide
documentation for the questionable Bridge the Gap expenditures that we identified,
perform a review of and return funds for any other unallowable Bridge the Gap
expenditures, and return any unexpended GEER grant funds. As such, during audit
resolution, Oklahoma should work with the appropriate Department officials to ensure
that corrective actions relating to the unaddressed recommendations are developed,
implemented, and adequately address the issues identified.
Although Oklahoma attributed the deficiencies that we identified regarding the Bridge
the Gap initiative to ClassWallet, it did not take advantage of an available ClassWallet
internal control option, nor did it perform a review of the initiative’s expenditures, as
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noted in Finding 2 of this report. As the recipient of the GEER grant funds, Oklahoma
was responsible for ensuring that its grant funds were used properly. Implementing the
optional control would have allowed Oklahoma to more timely and better monitor
whether grant funds were being used for allowable purposes.
Regarding our recommendation pertaining to the return of unexpended GEER grant
funds, we obtained documentation after the conclusion of our audit work that supports
that Oklahoma returned unexpended GEER grant funds to the Department. However,
because this was done after the conclusion of our audit work, we are not able to verify
whether all unexpended funds that were being maintained by Oklahoma’s GEER grant
subrecipients were returned. As such, Oklahoma should work with the appropriate
Department officials to ensure that all unexpended GEER grant funds applicable to our
audit scope have been returned to the Department.
We did not make any revisions to the findings and recommendations based on
Oklahoma’s comments or as a result of information submitted subsequent to our audit
period.
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Introduction
Purpose
The objectives of the audit were to determine whether the State of Oklahoma
(Oklahoma) designed and implemented awarding processes that ensured that the
Governor's Emergency Education Relief Fund (GEER grant) was used to support local
educational agencies (LEA) and institutions of higher education (IHE) that were most
significantly impacted by the coronavirus or LEAs, IHEs, or other education-related
entities within the State that were deemed essential for carrying out emergency
educational services; and monitoring processes to ensure that subgrantees used GEER
grant funds in accordance with the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act) and other applicable Federal requirements. Our review covered
March 13, 2020, through August 26, 2021.
Background
GEER Grant Authorized by the CARES Act
The CARES Act,9 signed into law on March 27, 2020, provides a total of $30.75 billion for
the Education Stabilization Fund, of which approximately $3 billion was provided to
Governors to make awards to LEAs, IHEs, and other education-related entities10 within
each State through the GEER grant. Congress intended the GEER grant to be an
emergency appropriation to address coronavirus-related disruptions and support a
State’s ability to continue to provide educational services to students and to support the
ongoing functionality of the LEAs and IHEs. In accordance with section 18002(b) of the
CARES Act, the Secretary of the U.S. Department of Education (Department) awarded
GEER grant funds to Governors using the following factors: 60 percent of the State’s
allocation was based on the State's relative population of individuals aged 5 through 24,
and 40 percent of the State’s allocation was based on the relative number of children
counted11 under section 1124(c) of the Elementary and Secondary Education Act of
1965, as amended. Governors that received a GEER grant were required by the
9
Public Law No. 116-136.
10 The Department’s Frequently Asked Questions About the GEER Fund document defines an education-
related entity as a governmental, nonprofit or for-profit entity within the State that provides services
that support preschool, elementary, secondary, or higher education.
11
For example, children counted for the purposes of making Title I, Part A formula grants to local
educational agencies, or the Title I, Part A formula count.
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Department to designate a fiscal agent, which could be the Office of the Governor or
another State agency, to administer the GEER grant. The fiscal agent is responsible for
overseeing and monitoring all GEER grant activities in the State.
The Department was required to obligate funds by September 30, 2021, and States and
their subgrantees are required to obligate funds by September 30, 2022. Unused funds
must be returned to the Department.
Allowable Uses of GEER Grant Funds
Section 18002(c) of the CARES Act authorized GEER grant funds to be used to provide
• emergency support through grants to LEAs that the State educational agency
(SEA) deems to have been most significantly impacted by coronavirus to support
the ability of such LEAs to continue to provide educational services to their
students and to support the ongoing functionality of the LEA;
• emergency support through grants to IHEs serving students within the State
that the Governor determines have been most significantly impacted by
coronavirus to support the ability of such institutions to continue to provide
educational services and support the ongoing functionality of the institution;
and
• support to any other IHE, LEA, or education-related entity within the State that
the Governor deems essential for carrying out emergency educational services
to students for authorized activities described in section 18003(d)(1) 12 of the
CARES Act or the Higher Education Act of 1965, as amended, the provision of
childcare and early childhood education, social and emotional support, and the
protection of education-related jobs.
U.S. Department of Education’s Administration of the
GEER Grant
The Department notified Governors of their GEER grant allocations in April 2020 and
provided guidance on how to apply for the funds. To receive the State's GEER grant
12 Section 18003(d)(1) of the CARES Act authorizes LEAs to use GEER funds for any activity authorized by
the Elementary and Secondary Education Act of 1965, as amended, including the Native Hawaiian
Education Act and the Alaska Native Educational Equity, Support, and Assistance Act, the Individuals
with Disabilities Education Act, the Adult Education and Family Literacy Act, the Carl D. Perkins Career
and Technical Education Act of 2006, or subtitle B of title VII of the McKinney-Vento Homeless
Assistance Act.
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allocation, the Governors submitted a signed Certification and Agreement to the
Department by June 8, 2020.13 The Certification and Agreement served as the
application to receive funds under the GEER grant, as provided in section 18002(a) of
the CARES Act. The Certification and Agreement included information on the State’s
planned use of the GEER grant funds and programmatic, fiscal, and reporting
assurances. This included an assurance that within 45 days of receiving GEER grant
funds, the State would submit to the Department an initial report detailing its process
for awarding the funds to LEAs, IHEs, or other education-related entities, including the
criteria for determining entities that are most significantly impacted by coronavirus or
deemed essential for carrying out emergency educational services, and the State’s
methodology for formulating those criteria. The Certification and Agreement also
included a requirement that States submit quarterly reports to the Secretary on their
uses of funds.
To answer questions about information that may not be easily understood from reading
section 18002 and other parts of the CARES Act, the Department issued a Frequently
Asked Questions document.14 The Department also encouraged SEAs to consult with the
Governor when making determinations of which LEAs were most significantly impacted
by the coronavirus. In addition to the guidance document provided, the Department
provided technical assistance to State agencies through conference calls to discuss their
allocation methodologies and plans for using the funds, and to answer any questions
they might have.
Oklahoma’s GEER Grant Initiatives
The Governor of Oklahoma received $39.9 million 15 in GEER grant funds. The Governor
identified the previous Secretary of State16 as the State program representative and the
Executive Office of the State of Oklahoma (the Governor’s Office) as the fiscal agent for
the GEER grant. The Governor’s Office allocated $18 million to its Office of Educational
Quality and Accountability (OEQA), $12 million to its Statewide Virtual Charter School
13 The deadline was extended from its original date of June 1, 2020.
14
“Frequently Asked Questions About the Governor’s Emergency Education Relief Fund (GEER Fund),”
https://oese.ed.gov/files/2020/10/FAQs-GEER-Fund.pdf (last visited November 22, 2021).
15 Oklahoma received a total of $39,919,354 in GEER grant funds. We rounded it down to the nearest
dollar amount.
16
The previous Secretary of State, who was also Secretary of Education, was appointed by the Governor
and served as the chief advisor to the Governor on public education issues and needs.
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Board (SVCSB), $8 million to its State Department of Education, and $1 million to
Tri-County Technical College (Tri-County).
OEQA’s Initiative
OEQA used $18 million in GEER grant funds for Oklahoma’s Bridge the Gap ($8 million)
and Stay in School Fund ($10 million) initiatives. OEQA contracted with ClassWallet, a
financial services company, to administer the initiatives, including determining eligibility
using Oklahoma’s established guidelines (ClassWallet subcontracted this function to
another company), awarding microgrants17 to eligible families, and facilitating payments
to schools for the Stay in School Fund initiative. ClassWallet subcontracted with Facts
Management, an applications management company, to administer the application
process, including determining eligibility using Oklahoma’s established guidelines, for
the two initiatives. Families could apply for funding from one or both initiatives.18
The purpose of the Bridge the Gap initiative was to provide $1,500 microgrants to
qualifying families to purchase curriculum content, tutoring services, and technology. To
qualify for the microgrants, the family had to be at or below 185 percent of the Federal
poverty line. Families who were above the 185 percent Federal poverty line but were
negatively impacted by the coronavirus pandemic, could qualify for the microgrant by
submitting financial documentation to show the negative impact.
The purpose of the Stay in School Fund initiative was to provide financial assistance
microgrants of up to $6,500 to low-income families of students attending nonprofit
private schools who have faced hardship or changes in income because of the
coronavirus pandemic. To qualify for the microgrants, Oklahoma required a family’s
income to fall at or below 350 percent of the Federal poverty line19 and the student had
17 ClassWallet operates an online digital wallet payment platform and an e-commerce marketplace that
facilitates payments to families and teachers and enables them to spend funds in an online marketplace.
The digital wallet platform is a financial accounting system that stores microgrant recipients’ funds and
allows them to make payments online. A microgrant is an account established for a parent that provides
funds directly to service providers that allows the parent to select education services, expenses, or
materials to meet their needs.
18 Families could apply for one or both programs using the same application.
19
For example, 350 percent of the Federal poverty line was $91,700 for a family of four.
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to be enrolled at an approved non-profit private school20 on March 15, 2020, and
enrolled in the same school for the 2020–2021 school year, or a tuition-free school, a
State-accredited addiction recovery school, or a school that subsidizes at least
90 percent of the cost to educate all its students.
SVCSB’s Initiative
SVCSB received $12 million in GEER grant funds for Oklahoma’s Learn Anywhere
Oklahoma initiative. SVCSB contracted with Edmentum, a provider of online digital
curriculum and professional development content, to provide LEAs, private schools, and
home school families access to digital curriculum and to provide public-school educators
access to online professional development content. The initiative included two parts:
• Part 1 provided $6.5 million for online educational content for students from
public, charter, private, and home schools. Parents had to complete a form for
the student through Edmentum to access the digital curriculum. There were no
eligibility requirements.
• Part 2 provided $5 million for public school educators to access online
instructor-led courses and professional development. Each LEA was allocated
between $5,000 and $20,000, based on student enrollment.
Oklahoma planned for the remaining $500,000 to be used for helpdesk services and
administrative costs for the initiative. However, $419,685 of it was returned to the
Department because it was not spent.
Oklahoma State Department of Education’s Initiatives
The Oklahoma State Department of Education (OSDE)21 used $8 million in GEER grant
funds for its CARES Act Incentive Grants initiative, which OSDE stated was intended to
help educators bridge the digital divide and strengthen distance learning in the wake of
the coronavirus pandemic. OSDE provided grant packages to the LEAs that included an
application, instructions on the application, and guidance on allowable and unallowable
expenditures. Some of the allowable expenditures included Wi-Fi hot spots and online
systems that support students in distance learning and training for teachers on how to
20 An eligible school is a nonpublic school which has more than 10 students enrolled and educates
Oklahoma children in grades K–12. Schools were required to pre-register to be eligible on ClassWallet’s
Oklahoma School Pre-Registration webpage.
21
The State Superintendent of Public Instruction oversees OSDE and is responsible for determining
educational policy and directing the administration of the Oklahoma public school system.
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teach students reading. By signing the application, the LEAs agreed to comply with all
applicable GEER grant requirements.
According to Oklahoma’s Deputy Chief of Staff and Chief of Government Affairs, in May
2021, Oklahoma allocated an additional $2.9 million in GEER grant funds22 to OSDE to
use for its Reallocation Grant program for LEAs. According to Oklahoma’s grant award
notification letter to OSDE, the purpose of the grant was to provide in-person
opportunities for summer enrichment programs to address student learning loss. We
did not include the Reallocation Grant in our review because the grant funds were not
allocated or awarded when we began our fieldwork.
Tri-County’s Initiative
Tri-County23 used $1 million in GEER grant funds for Oklahoma’s Skills to Rebuild
initiative to help meet the needs of local employers seeking individuals for high-demand
jobs, thereby helping to rebuild the economy, by providing tuition waivers for students
pursuing certificates in high-demand jobs, including nursing and computer networking.
22 Oklahoma reallocated $1,982,991 in unused funds from the Bridge the Gap, Stay in School Fund, and
Learn Anywhere Oklahoma initiatives and $919,354 in GEER grant funds that Oklahoma never allocated
to any of its initiatives.
23 Tri-County is a public technology center accredited by Oklahoma Career Tech, the Oklahoma State
Department of Education, and the National Communication Association: Commission on Accreditation
and School Improvement and serves a three-county district within Northeastern Oklahoma. Skills to
Rebuild participants did not have to be a resident of any of the three counties. Tri-County does not grant
degrees.
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Finding 1. Oklahoma Did Not Award All of its
GEER Grant Funds to Entities in Accordance
with the CARES Act, Federal Regulations, and
Grant Conditions
For four of the five initiatives that Oklahoma funded with its GEER, Oklahoma could not
support its stated processes for awarding funds to eligible entities that were either most
significantly impacted by the coronavirus or deemed essential for carrying out
emergency educational services, providing childcare and early childhood education,
providing social and emotional support, or protecting education-related jobs. The four
initiatives were Skills to Rebuild, Learn Anywhere Oklahoma, Bridge the Gap, and Stay in
School Fund.
For these initiatives, Oklahoma described at a high level in its initial and follow-up
reports to the Department the criteria and processes that it used to determine which
entity categories (LEAs, IHEs, or other education-related entities) or priority areas (such
as connectivity, learning management systems, and educational training for high
demand careers) within authorized entity categories were most significantly impacted
by the coronavirus or essential for carrying out emergency educational services. In the
follow-up report, Oklahoma also included a brief explanation regarding how it made
these determinations—specifically, that Oklahoma established the four initiatives noted
above as mechanisms for addressing adverse impacts of the coronavirus and then
selected entities to implement them. According to Oklahoma, its strategy was to ensure
that all students with needs resulting from the coronavirus had the potential to access
necessary funding to meet those needs. However, Oklahoma did not maintain any
documentation related to its stated processes and awarding decisions, to include
evidence of deliberations about which subrecipients should be responsible for
administering the initiatives and why. Officials with whom we spoke also provided
conflicting information.
The lack of such documentation has resulted in a lack of assurance that Oklahoma’s
selections of the three entities were the result of processes that sought to identify
entities that were most significantly impacted by the coronavirus or essential for
carrying out emergency educational services, providing childcare and early childhood
education, providing social and emotional support, or protecting education-related jobs.
The lack of such documentation also provides for less transparency into the awarding
processes, which could potentially increase the risk of fraud and abuse in these
processes.
For the fifth initiative (CARES Act Incentive Grants) that Oklahoma funded with its GEER
grant, Oklahoma’s OSDE designed and implemented an awarding process that ensured
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$8 million of its $39.9 million24 GEER grant was used to support LEAs that were most
significantly impacted by the coronavirus, as determined by the State. We also found
that the coronavirus areas of impact that OSDE included in its award process for the
initiative aligned with the purpose of the GEER grant—to support LEAs most significantly
impacted by coronavirus.
Also, in awarding GEER grant funds to entities for all five of its initiatives, Oklahoma did
not adhere to Federal requirements for pass-through entities to clearly identify
subawards to subrecipients and to provide those subrecipients with certain required
information at the time of the subawards. Not performing these required procedures
creates an increased risk of subrecipients not using GEER grant funds in accordance with
Federal requirements and the terms and conditions of the GEER grant award.
Additionally, we tested the award processes for three initiatives for which the State
awarded funds (CARES Act Incentive Grants, Bridge the Gap, and Stay in School Fund) to
two entities—OSDE and OEQA. OSDE administered the CARES Act Incentive Grants
initiative and OEQA disbursed its funds to another entity (ClassWallet) to administer the
Bridge the Gap and Stay in School Fund initiatives. For these three initiatives, we found
that, in general, the entities responsible for the initiatives adhered to award processes
that OSDE and Oklahoma established for these initiatives; however, one of Oklahoma’s
GEER grant contractors did not require its subcontractor to adhere to Federal record
retention requirements. Accordingly, we could not fully confirm the eligibility of 8 of the
10 students we sampled for the Stay in School Fund initiative. Without proper
documentation there is no assurance that the Stay in School Fund microgrant eligibility
determinations made by the subcontractor are supported or accurate.
Lastly, Oklahoma did not have written policies and procedures for entering into certain
contracts that were funded with the GEER grant but for which competition was not
required under State law. The lack of such written policies and procedures creates an
increased risk of contractual awarding decisions not being adequately supported, which
provides for less transparency into the process and could increase the risk of fraud,
waste, and abuse.
24
Oklahoma did not award $919,354 of its $39.9 million GEER grant award for its initial round of awards.
Oklahoma returned the funds to the Department in February 2021.
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Oklahoma’s Award Process for Four of its GEER Grant
Initiatives Was Not Fully Supported
Oklahoma allocated $31 million in GEER grant funds to three entities to fund four
initiatives: $18 million to OEQA for the Bridge the Gap ($8 million) and Stay in School
Fund ($10 million) initiatives, $12 million to SVCSB for the Learn Anywhere Oklahoma
initiative, and $1 million to Tri-County for the Skills to Rebuild initiative. However,
Oklahoma could not support its stated processes for awarding funds to these entities in
accordance with the GEER grant requirement that they were either most significantly
impacted by the coronavirus or deemed essential for carrying out emergency
educational services, providing childcare and early childhood education, providing social
and emotional support, or protecting education-related jobs.
Description of the Grant Award Processes
The Terms and Conditions of the GEER Fund included in Oklahoma’s Grant Award
Notification stated that within 45 days of receiving GEER funds, the State must submit to
the Department an initial report detailing its process for awarding those funds to LEAs,
IHEs, or other education-related entities, including the criteria for determining those
entities that are most significantly impacted by coronavirus or deemed essential for
carrying out emergency educational services, and the methodology used to formulate
those criteria. Oklahoma submitted its required 45-Day Report in August 2020 and a
clarification document, per the Department’s request, in January 2021. The documents
included descriptions of the initiatives that Oklahoma planned to fund with its GEER
grant and taken together, described at a high level the criteria and processes that
Oklahoma used to determine which entity categories or priority areas within authorized
entity categories were most significantly impacted by the coronavirus or essential for
carrying out emergency educational services. In the clarification document, Oklahoma
also included a brief explanation regarding how it determined that the four initiatives
noted above would be used as mechanisms for addressing adverse impacts of the
coronavirus. The clarification document explained that in selecting entities to
implement the initiatives, the previous Oklahoma Secretary of Education consulted with
many education stakeholders, including the Governor, the current Secretary of
Education, and the State Superintendent of Public Instruction to pitch and draft ideas
for innovative ways to use the funds to help all students in Oklahoma.
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In its 45-Day Report and clarification document, Oklahoma identified four entities25 that
would administer the four initiatives noted above, but only awarded funds to one
(Tri-County) of the four entities to administer one of the four initiatives. For two of the
remaining three initiatives, Oklahoma indicated that the Bridge the Gap and Stay in
School Fund initiatives funds would be administered by ClassWallet, with support from
the Oklahoma Private School Accrediting Commission and Every Kid Counts Oklahoma;
however, the funds were awarded to OEQA, which then contracted with ClassWallet.
For the remaining Learn Anywhere Oklahoma initiative, Oklahoma indicated that the
funds would be administered by the Oklahoma Supplemental Online Course Program
and the Oklahoma Public School Resource Center; however, the funds were awarded to
SVCSB, which then contracted with Edmentum. Oklahoma did not document the
deliberative processes it used to select the three entities (Tri-County, OEQA, and SVCSB)
to which it awarded $31 million in GEER grant funds for the administration of the Skills
to Rebuild, Bridge the Gap, Stay in School Fund, and Learn Anywhere Oklahoma
initiatives. In addition, during our audit, Oklahoma officials provided us with conflicting
information regarding the process they used to identify and select the three entities.
Weaknesses in Overseeing Grant Awards
According to Oklahoma’s former Secretary of State (who was responsible for overseeing
the GEER grant when the funds were awarded to the State in July 2020), entities within
the State were required to apply for GEER grant funds through Oklahoma’s Office of
Management and Enterprise Services (OMES). He said that he and other cabinet staff
reviewed about 20 to 30 GEER grant applications that OMES passed on to them. The
former Secretary of State also said that he discussed the applications with the Governor
but could not speak to the processes used to select the three entities that received
GEER grant funds because it was the Governor who made the awarding decisions.
We asked Oklahoma for the GEER grant applications that the former Secretary of State
said he and cabinet members reviewed; however, neither the former Secretary of State,
the current Secretary of Education, the Secretary of Budget, nor our former audit
liaison26 were able to locate and provide us with the applications. We talked to one of
the cabinet members who the former Secretary of State said participated in the
awarding process, and we asked him to describe the awarding process to us; however,
25 The four entities include Tri-County for the Skills to Rebuild initiative, ClassWallet for the Bridge the
Gap and Stay in School Fund initiatives, and both the Oklahoma Supplemental Online Course Program
and the Oklahoma Public School Resource Center for the Learn Anywhere Oklahoma initiative.
26
Our audit liaison stated that she spoke with others in Oklahoma to try to locate the grant applications,
but no one could locate them. She did not provide the names of the individuals to whom she spoke.
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the cabinet member said he was not involved with the GEER grant. Also, neither the
previous nor current Deputy General Counsel for OMES’s Legal Division were able to
verify whether OMES ever received any GEER grant applications. In addition, we talked
to the Executive Director of Oklahoma’s SVCSB who was responsible for the
administration of the Learn Anywhere Oklahoma initiative, and she stated that she did
not submit an application to OMES. We also talked to the current Secretary of Education
and ClassWallet’s Chief Executive Officer, who were responsible for the conception of
the Bridge the Gap and Stay in School Fund initiatives, 27 who stated that they did not
submit an application to OMES and they gave verbal presentations to the former
Secretary of State. We also talked to an official representing Tri-County who stated that
he did not complete or send an application to OMES; rather, he created a proposal and
sent it directly to the former Secretary of State.
In a letter to Oklahoma’s Governor, we sought information about the four initiatives,
including the names of the subgrantees associated with the four initiatives, whether the
subgrantees had been selected because they were determined to be most significantly
impacted by the coronavirus or deemed essential for carrying out certain emergency
educational services, and the selection processes used to make these decisions. The
response we received explained that the Governor was not involved in the selection
process and that the selection process was handled by the former Secretary of State and
the agencies he may have been working with. The response identified Tri-County and
contractors Edmentum and ClassWallet as subgrantees of the four initiatives. For each
initiative, the response listed the adverse effects of the coronavirus, and the actions
Oklahoma could take to address them. The response did not explain how subgrantees of
the GEER grant were selected. We attempted to follow up with the former Secretary of
State to reconcile his description of the process with the descriptions provided by others
in the State, but he did not respond.
According to sections 18002(c)(1) through (c)(3) of the CARES Act, the GEER Fund may
be used to provide emergency support grants to LEAs and IHEs deemed most
significantly impacted by coronavirus and any other IHEs, LEAs, or education-related
entities in the State that the Governor deems essential for carrying out emergency
education services to authorized students.
Additionally, the Department’s Frequently Asked Questions about the GEER Fund
provides guidance to States. Specifically, Question A-3 states that Governors may use
GEER funds through a subgrant or contract to other LEAs, IHEs, and education-related
27
The current Secretary of Education and ClassWallet’s Chief Executive Officer were neither Governor’s
Office nor State employees when the three initiatives were being conceptualized.
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entities deemed “essential for carrying out emergency educational services, providing
childcare and early childhood education, providing social and emotional support, and
protecting education-related jobs.” Question A-6 states that Governors must make the
criteria for determining “most significantly impacted” publicly available, and states that
SEAs are responsible for determining eligibility of LEAs while the Governor is responsible
for determining the eligibility of IHEs.
In addition, according to 2 Code of Federal Regulations (C.F.R.) section 200.303(a) and
(c) (effective through November 11, 2020), a non-Federal entity must establish and
maintain effective internal control over its Federal award that provides reasonable
assurance that it is managing its award in compliance with Federal statutes, regulations,
and the terms and conditions of its award. These internal controls should be compliant
with the Comptroller General of the United States’ guidance in “Standards for Internal
Control in the Federal Government” or the Committee of Sponsoring Organizations of
the Treadway Commission’s “Internal Control Integrated Framework.” The entity must
also evaluate and monitor its compliance with statutes, regulations, and the terms and
conditions of Federal awards.
Also, the U. S. Government Accountability Office Standards for Internal Control in the
Federal Government section 10.03 states that internal control and “all transactions and
other significant events” are to be clearly documented in electronic or paper copies of
management directives, administrative policies, or operating manuals; properly
maintained; and available to be examined.
Lack of Supporting Documentation
Oklahoma did not have controls in place to ensure that it could support that its
awarding of GEER grant funds was conducted in accordance with the CARES Act and
other Federal regulations. Specifically, Oklahoma’s Governor’s Office, which was
ultimately responsible for Oklahoma’s GEER grant, did not require the GEER grant
administrator (the former Secretary of State) to document the deliberative processes it
used to select the entities that were awarded GEER grant funds for the administration of
the Skills to Rebuild, Learn Anywhere Oklahoma, Bridge the Gap, and Stay in School
Fund initiatives. Such accountability would have enabled Oklahoma to ensure that
CARES Act requirements and other Federal regulations were being followed.
Oklahoma’s lack of documentation has resulted in a lack of assurance that Oklahoma’s
selections of the three entities were the result of processes that sought to identify
entities that were most significantly impacted by the coronavirus or essential for
carrying out emergency educational services, providing childcare and early childhood
education, providing social and emotional support, or protecting education-related jobs.
In addition, the lack of documentation for awarding decisions provides for less
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transparency into the awarding processes, which could potentially increase the risk of
fraud and abuse in these processes.
OSDE’s Award Process for the CARE S Act Incentive Grants
Initiative Was Generally Designed and Implemented in
Accordance with the CARES Act , Federal Regulations, and Grant
Conditions
For Oklahoma’s CARES Act Incentive Grants initiative, OSDE designed and implemented
an awarding process that ensured $8 million of its GEER grant was used to support LEAs
that were most significantly impacted by the coronavirus, as determined by the State.
Oklahoma’s CARES Act Incentive Grants is funded by $8 million in GEER grant funds and
$8 million in Elementary and Secondary School Emergency Relief (ESSER) Grant Set
Aside funds. To receive a CARES Act Incentive Grant (regardless of whether it would be
funded by GEER or ESSER), LEAs had to apply.
OSDE assigned two reviewers to review each application and used a rubric to score each
section based on a predetermined maximum number of points, for a total application
score of up to 117 points (the scores of the two reviewers were averaged for each
application).28 To determine which LEAs would receive a CARES Act Incentive Grant
funded by GEER grant funds, OSDE looked at how many points the LEA received on the
sections of the application that explained how the LEA had been most significantly
impacted by the coronavirus based on academic, physical and mental health, and
economic and social factors, and gave bonus points to LEAs that received less than
$100 per student in ESSER Formula funds (these ESSER funds were previously provided
to LEAs who applied for funds under a different grant program). LEAs that received a
total of 9 to 17 points in those 2 sections were eligible to receive a CARES Act Incentive
Grant funded by GEER grant funds.29
To determine the maximum amount of funds an LEA could receive, OSDE assigned all
LEA applications to one of five tiers, based on student enrollment. Table 1 presents the
five tiers, the LEA enrollment size assigned to each tier, and the maximum amount of
GEER grant funds LEAs in a particular tier is allowed to receive.
28 All of the applications were initially reviewed by only two reviewers. However, if there was a situation
in which there was a 23-point difference in the scores of the two reviewers, then a third reviewer was
added, and all three scores were averaged.
29
LEA applicants that did not receive a CARES Act Incentive Grant funded by GEER grant funds received a
CARES Act Incentive Grant funded by ESSER Grant Set Aside funds.
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Table 1. LEA Tiers and Maximum Award Amounts
Tier LEA Enrollment Size Maximum Award Amount
I 500 or fewer $50,000
II 501–1000 $100,000
III 1,001–2,500 $200,000
IV 2,501–7,499 $300,000
V 7,500 or more $500,000
OSDE determined an LEA’s allocated amount based on the amount of funds requested
in their application, capping it at the maximum amount allowed for the tier. OSDE
awarded GEER grant funds to 72 of the 360 LEAs that applied for the CARES Act
Incentive Grant initiative.30 OSDE notified the LEAs of their GEER grant allocation
amounts. OSDE also informed the LEAs that they would receive their GEER grant funds
on a reimbursement basis.
We sampled 11 of the 72 LEAs that received GEER grant funds to determine whether
OSDE followed its awarding process. We confirmed that the application reviewers’
scores supported OSDE’s awarding decision for each LEA and found that the LEAs
applied for the grant, received an award notification letter from OSDE, signed the
required assurances, and if applicable, offered equitable services to nonpublic schools.31
We also confirmed that the amounts included in the LEAs’ award notification letters
agreed with the award amounts posted on OSDE’s website.
OSDE posted to its website the criteria it used to allocate the $8 million in GEER grant
funds to LEAs. Oklahoma also included the criteria and the related processes that it used
to determine LEA awardees and award amounts in the 45-Day Report it submitted to
the Department.
30 There are 547 LEAs in the State of Oklahoma.
31 We also sampled 10 LEAs that applied for a CARES Act Incentive Grants but were not awarded GEER
grant funds. We found that the application reviewers’ scores supported OSDE’s awarding decision for
these LEAs.
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Oklahoma Did Not Follow Federal Regulations Regarding
Subawards
Oklahoma did not follow Federal regulations regarding subawards when it disbursed
$39 million of its GEER grant to OSDE, Tri-County, SVCSB, and OEQA. According to the
response to the letter we sent to Oklahoma’s Governor, the GEER grant subgrantees for
four of the GEER grant initiatives were Tri-County, Edmentum, and ClassWallet.
However, in the Federal Funding Accountability and Transparency Act report that
Oklahoma initially submitted to the Federal Subaward Reporting System,32 Oklahoma
identified OSDE, Tri-County, the Executive Office of the State of Oklahoma, and the
International Christian Crediting Association 33 as subgrantees of the five GEER grant
initiatives. Oklahoma later revised its submission to identify OSDE, Tri-County,
Edmentum, and ClassWallet34 as the subgrantees for the five initiatives. The former
Director of Statewide Operations informed us that she was not sure whether subaward
numbers existed, therefore she created and reported them for OSDE, Tri-County,
Edmentum, and ClassWallet.
Although Tri-County submitted a Federal fund certification form 35 in September 2020
that identified it as a subrecipient, the certification form did not clearly identify the
terms of the subaward. Additionally, an Oklahoma official was required to sign the
Federal fund certification as an acknowledgment that the form was received on behalf
of the State. Oklahoma’s current Secretary of Education did not sign the Federal fund
certification until April 12, 2021. Oklahoma did not have a certification form for the
other entities or any documentation relating to the subawards made to ClassWallet and
32 The Federal Subaward Reporting System collects data on executive compensation and first-tier
subawards.
33 The Executive Office was identified as the subgrantee for the Learn Anywhere Oklahoma and Bridge
the Gap initiatives. The International Christian Crediting Association was identified as the subgrantee for
the Stay in School Fund initiative.
34 Edmentum was identified as the subgrantee for the Learn Anywhere Oklahoma initiative. ClassWallet
was identified as the subgrantee for the Stay in School and Bridge the Gap initiatives.
35 The Federal Fund certification form is a State form that required Tri-County to certify, among other
things, that the GEER grant funds would be used on expenditure costs that were necessary due to the
public health emergency with respect to the coronavirus, would retain documentation of all uses of the
funds, and would be subject to any monitoring activities as deemed appropriate by Oklahoma.
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Edmentum other than the signed contracts with them, which did not include any
subaward language.
As such, Oklahoma did not clearly identify or document its GEER grant subgrantees,
obtain the required subaward data (such as the subrecipients’ unique entity identifier)
from any of the above-named entities, document the subawards’ period of performance
start and end dates, or identify all requirements Oklahoma imposed on the
subrecipients or the appropriate terms and conditions concerning closeout of the
subawards as required by Federal regulations.
Federal regulation 34 C.F.R. section 76.302 requires the State to notify a subgrantee in
writing of the amount of the subgrant, the period during which the subgrantee may
obligate the funds, and the Federal requirements that apply to the subgrant.
In addition, 2 C.F.R section 200.331 states that all pass-through entities must ensure
that subawards are clearly identified to the subrecipient when awarded, and must
include required information, including the Federal Award identification number, the
subrecipient’s unique identifier, the subaward’s period of performance dates, the total
amount of Federal funds obligated, and the Catalog of Federal Domestic Assistance
number and name. Further, the pass-through entity must identify all requirements it
imposes upon the subrecipient to ensure the Federal award is used according to Federal
requirements and any requirements the pass-through entity imposes on the
subrecipient so the pass-through entity can meet its own responsibilities, including
identification of any required financial and performance reports; a requirement that the
subrecipient permit the pass-through entity and auditors access to the subrecipient's
records and financial statements; and terms and conditions concerning the subaward’s
closeout.
In awarding GEER grant funds to entities, Oklahoma was not able to ensure that it
followed Federal regulations regarding subawards because it did not require the GEER
grant administrator (the former Secretary of State) to document decisions made
regarding the awarding process, such as preparing plans or written processes governing
the awarding of the grant funds. Such accountability would have enabled Oklahoma to
ensure that CARES Act requirements and Federal regulations were being followed.
Further, because of the lack of documentation we were unable to verify the process
described to us by the GEER grant administrator and determine the process used to
award the grant funds. Not adhering to Federal regulations regarding subawards and
subrecipients increases the risk of subrecipients not using GEER grant funds in
accordance with Federal statutes and the terms and conditions of the GEER grant
award.
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Oklahoma Did Not Ensure All GEER Grant Contractors Followed
Record Retention Regulations
Oklahoma did not ensure that all contractors (including related subcontractors) it
awarded GEER grant funds to followed Federal record retention regulations. Although
Oklahoma included a records retention clause in its contract with ClassWallet,36
Oklahoma did not have controls in place to ensure that ClassWallet included a records
retention clause in any subcontracts that it entered into to complete its contractual
work to ensure that related records were retained. ClassWallet did not include a record
retention clause in its subcontract with FACTS Management.
Oklahoma contracted with ClassWallet, which subcontracted with FACTS Management,
an applications management company, to determine a family’s eligibility for the Bridge
the Gap and Stay in School Fund initiatives that were funded by GEER grant funds. To be
eligible to receive microgrants for the Stay in School Fund initiative, a student had to
attend an eligible school37 in the prior year and be enrolled at the same school in the
current year. When a family applied for a Stay in School Fund microgrant, FACTS
Management emailed the school to verify the student’s enrollment and registration
status. The school confirmed the student’s status via email and FACTS Management
input the enrollment and registration information into its system. However, FACTS
Management did not retain all of these emails. FACTS Management’s email retention
policy was to automatically delete emails after 90 days.38
In our test to determine whether FACTS Management awarded Stay in School Fund
microgrants to eligible families and schools, we selected a nonstatistical random sample
of 10 (0.5 percent) of 1,979 students who received microgrants. For 8 of the 10 students
in our sample, we were not able to fully confirm whether they were eligible because
Oklahoma could not provide supporting documentation to show that FACTS
36 The record retention clause required ClassWallet to retain contract-related records for the duration of
the contract or a period of seven years following completion or termination of the acquisition unless
otherwise indicated in the contract terms.
37 An eligible school is a nonpublic school which has more than 10 students enrolled and educates
Oklahoma children in grades K–12. To be eligible, schools were required to pre-register on ClassWallet’s
Oklahoma School Pre-Registration Webpage.
38 FACTS Management’s email retention policy is a company policy; however, only the Stay in School
Fund initiative was affected by the policy because the Bridge the Gap initiative did not require email
exchange between the applicants and FACTS Management. All documentation for the Bridge the Gap
initiative was submitted through FACTS Management’s online portal.
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Management contacted the schools to confirm the student’s enrollment and
registration status because FACTS Management did not retain the email documentation.
According to 2 C.F.R. section 200.333, all documents pertinent to a Federal award must
be retained for 3 years from the date of submission of the final expenditure report or
the quarterly or annual financial report (as applicable) for a subrecipient.
Because Oklahoma did not ensure that ClassWallet required FACTS Management to
follow record retention requirements, Oklahoma does not have assurance that Stay in
School Fund microgrant eligibility determinations made by FACTS Management are
supported or accurate.
Oklahoma Did Not Have Written Policies and Procedures
Relating to Noncompetitively Bid Contracts
Oklahoma’s OMES Information Services Division (ISD) did not have written policies and
procedures for entering into certain contracts for which State law did not require
competitive bidding, such as the ClassWallet contract funded by Oklahoma’s GEER
grant. We noted that OMES ISD issued a two-page document in August 2013
(“OMES ISD Procurement Policies”) that gives the Chief Information Officer (CIO) broad
interpretive authority regarding State laws and rules around procurement and allows for
situations, without limitation, where less extensive file documentation for
noncompetitively bid solicitations is permissible. The document, however, does not
provide guidance on circumstances under which this would be warranted, procedures to
follow in such cases, or minimum documentation requirements.
Oklahoma’s CIO oversees OMES ISD. OMES ISD is responsible for approving all
information technology (IT) and telecommunication services and product purchases for
all Oklahoma State agencies. On behalf of OEQA, OMES ISD entered into a
noncompetitively bid contract with ClassWallet to build an IT platform that enabled
families to apply for and receive GEER-funded microgrants and to facilitate recipients’
use of funds through a digital wallet platform. Oklahoma used $650,000 of the
$18 million GEER grant it disbursed to OEQA to pay ClassWallet. Both the CIO and the
Director of OEQA signed the contract for Oklahoma. Because the ClassWallet contract
was not competed, a situation that can increase the risk of misuse of Federal funds, we
wanted to determine whether proper procurement policies and procedures were
followed.
According to OMES’ Deputy General Counsel, “[t]he CIO authority to contract directly
rests in Title 62 Oklahoma Statute (O.S.) 34 and 35 … and does not require competitive
bidding.” We reviewed the applicable sections of Oklahoma law and determined this to
be the case. However, under 62 O.S. section 34.11.1 (H.1), the CIO is responsible for
establishing, implementing, and enforcing policies and procedures for procuring IT for
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State agencies that are consistent with the Oklahoma Central Purchasing Act. Further,
under 62 O.S. section 34.11.1 (I), the CIO has the authority to negotiate IT contracts in
accordance with the procedures outlined at 74 O.S. section 85.9D. We reviewed
74 O.S. section 85.9D and found that although it authorized the State Purchasing
Director39 to negotiate IT contracts in lieu of or in conjunction with bidding procedures
to reduce acquisition cost, the law did not establish specific procedures for doing so.40
The Deputy General Counsel also informed us that Oklahoma’s contract with
ClassWallet was not a sole source contract and that the sole source rules did not apply.
We asked the Deputy General Counsel to provide the procurement policies and
procedures that the CIO was required to establish under 62 O.S. section 34.11.1(H.1); he
stated that “the CIO does not have specific procurement policies and procedures
referenced in the law, because the procurement process was delegated to the Central
Purchasing Office and the State Purchasing Director for purposes of keeping uniformity
between IT and non-IT procurements.” The Deputy General Counsel explained that the
CIO retains the authority to make determinations as to the specifics of the technology
itself and to address any security or technology issues as it relates to the IT architecture
and security of any IT procurement. He further stated that, “The CIO does have general
policies and standards,” and provided us with an internet link where those policies and
standards were located. The Deputy General Counsel also stated that, “the policies and
standards found at the link are not a limitation of the CIO authority to enter into
noncompetitively bid contracts. The various statutes the CIO is cited in authorize
multiple and independent authorities.”
The link that the Deputy General Counsel provided was to the CIO’s OMES ISD
Procurement Policies—the two-page document mentioned above. This policy document
provides that
[m]inimum mandatory standards established and enforced by ISD and
accomplishment of the duties of the CIO and ISD pursuant to applicable
[S]tate law may be carried out through the use of consolidation
39 Oklahoma law provides that the CIO has the same authority regarding procurement of IT as the State
Purchasing Director has for all acquisitions for State agencies as established in the Oklahoma Central
Purchasing Act.
40
74 O.S. section 85.9D was repealed as of October 31, 2020.
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contracts, enterprise agreements and high technology system[41]
contracts as well as other means. Consistency with the Central
Purchasing Act and other applicable law, rules, policies and procedures
shall be interpreted by the CIO and deviation from such rules, policies
and procedures may occur as circumstances warrant such as, without
limitation, less extensive file documentation for noncompetitively bid
solicitations ….
The policy document—or any other documents referenced by the State—does not
provide examples of circumstances under which such deviations would be warranted,
procedures to follow in such cases, or minimum documentation requirements. All
discretion rests with the CIO.
In the case of the ClassWallet contract, the only documents maintained by the State,
other than the contract itself, were emails about contract terms. There is no
documentation explaining why the decision was made to acquire ClassWallet’s services
without competition or how ClassWallet was identified and selected as the vendor.
According to 2 C.F.R. section 200.317, a State must follow the same policies and
procedures it uses for its non-Federal fund procurements when procuring property and
services with its Federal award funds. Although Oklahoma complied with this regulation
when entering into a non-competitive bid contract with ClassWallet, Oklahoma’s
procurement policies and procedures need strengthening because they do not provide
for an appropriate level of transparency and accountability, particularly if Federal funds
are used for acquisitions.
The U. S. Government Accountability Office Standards for Internal Control in the Federal
Government section 10.03 states that, “Management clearly documents internal control
and all transactions and other significant events in a manner that allows the
documentation to be readily available for examination. The documentation may appear
in management directives, administrative policies, or operating manuals, in either paper
or electronic form. Documentation and records are properly managed and maintained.”
Oklahoma believed that the CIO’s OMES ISD Procurement Policies addressed the
requirements for noncompetitively bid contracts, including the ClassWallet contract.
However, because Oklahoma’s CIO OMES ISD Procurement Policies allow deviations
from Oklahoma’s Central Purchasing Act (such as allowing less extensive file
41 According to 62 O.S. section 34.11.1 (O)(1), a “[h]igh technology system means advanced
technological equipment, software, communication lines, and services for the processing, storing, and
retrieval of information by a [S]tate agency.”
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documentation for noncompetitively bid solicitations) without written policies and
procedures prescribing how such deviations should be documented or handled, there is
an increased risk of contractual awarding decisions not being adequately supported,
which provides for less transparency into the process and could increase the risk of
fraud, waste, and abuse.
Recommendations
We recommend that the Assistant Secretary for the Office of Elementary and Secondary
Education require the Governor of Oklahoma to—
1.1 Provide documentation, or a full and detailed written explanation, of the
process Oklahoma used to determine the initiatives it supported with GEER
grant funds and the entities it selected to administer the initiatives.
1.2 Develop and implement a process to ensure that it documents the criteria and
decisions made for awarding future GEER grant funds in accordance with
applicable requirements.
1.3 Develop and implement internal controls to ensure that it administers current
and future GEER grants in accordance with applicable Federal laws and grant
requirements, including ensuring that grant subrecipients are provided the
proper award documentation; and that any entity that is awarded Federal funds
retains records relating to those awards in accordance with Federal
requirements.
1.4 Perform a 100 percent review, or review a statistical sample, of the Stay in
School Fund microgrant recipients to confirm that all students were eligible to
receive GEER grant funds.
1.5 Develop and implement written policies and procedures to describe the specific
circumstances under which deviations from procurement rules are warranted,
including procedures about required documentation of such decisions for
procurements that do not use competitive bidding but use Federal education
funds.
We recommend that the Assistant Secretary for the Office of Elementary and Secondary
Education—
1.6 Take appropriate action if the documentation and other information provided
by Oklahoma in response to the above recommendations does not support that
the State followed applicable requirements.
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Oklahoma Comments
Oklahoma did not state whether it agreed or disagreed with the finding and recommendations.
Although Oklahoma stated that it fulfilled its responsibility to use its GEER grant funds as
Congress intended, it agreed that a lack of documentation could result in a lack of assurance,
which provides for less transparency and could potentially increase the risk of fraud and abuse.
Oklahoma identified corrective actions that it has taken or plans to take to address our finding
and recommendations. Specifically, Oklahoma stated that the State Chief Operating Officer
developed an advisory steering committee to make recommendations and provide
documentation regarding any future awards, including GEER funds. Oklahoma also stated that
the State Chief Operating Officer selected a project manager to oversee the committee.
Oklahoma stated that it tasked its Office of Grants Management with providing Federal grant
fund oversight and guidance to Federal grant award subgrantees, and that this office developed
and implemented an evaluation rubric to help Oklahoma make Federal grant fund use decisions
and document the process.
In addition, the Office of Grants Management was in the process of creating both a Grant
Agreement template to be used between grant recipients and their subrecipients, as well as a
Uniform Guidance for Grants Information document that will be distributed to entities awarded
Federal funds. Oklahoma subsequently provided the Grant Agreement template. Finally,
Oklahoma stated that its State Purchasing Director had published Federal grant fund
competitive bidding guidance which Oklahoma stated addressed the use of Federal funds and
provided guidance to administrators regarding any additional Federal requirements that go
beyond the State’s procurement laws and rules. Oklahoma provided us with documentation for
some of the corrective actions that it stated it had implemented.42
OIG Response
Oklahoma’s proposed corrective actions, if properly implemented to ensure compliance
with applicable laws and grant requirements for future Federal funds, are responsive to
three of the five recommendations relating to Finding 1 (Recommendations 1.2, 1.3, and
1.5). Specifically, the updated policies and procedures and other information that
Oklahoma provided subsequent to its response appear designed to address the issues
covered in these recommendations. However, its proposed corrective actions are not
responsive to the remaining two recommendations (1.1 and 1.4). Specifically, Oklahoma
did not state whether it would provide documentation or a detailed written explanation
of the GEER grant award process it used and review Stay in School Fund microgrant
recipients to confirm that all students were eligible to receive GEER grant funds.
42
Oklahoma provided us with copies of its evaluation rubric and competitive bidding guidance.
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Finding 2. Oklahoma’s GEER Fund Monitoring
Process Should Be Strengthened
The monitoring processes Oklahoma designed and implemented to ensure that
subgrantees used GEER grant funds in accordance with the CARES Act and other
applicable Federal requirements for four of the five initiatives it funded with the GEER
grant (Skills to Rebuild, Learn Anywhere Oklahoma, Bridge the Gap, and Stay in School
Fund) need strengthening. Specifically, there were no written monitoring policies and
procedures, the monitoring activities that Oklahoma did conduct did not include a
review of supporting documentation for information contained in the initiatives’ weekly
status reports, and Oklahoma did not conduct any other monitoring activities. In
addition, Oklahoma did not have any monitoring controls in place that could have
prevented the $652,720 in Bridge the Gap purchases that did not appear to be
education-related. Without a more robust monitoring process, there is an increased risk
that GEER grant funds have been or will be used for unallowable purposes, as was the
case with the Bridge the Gap initiative.
For the fifth initiative (CARES Act Incentive Grants), OSDE designed and implemented
comprehensive reimbursement and monitoring review processes for its LEAs that
ensured that the GEER grant funds were used in accordance with the CARES Act and
other Federal requirements. Although we did not test a sample of expenditures for this
initiative, we obtained examples of LEAs’ reimbursement packets, which included the
required purchase orders, requisitions, invoices, or receipts to support their
reimbursement requests.
Monitoring Processes for Four Initiatives Lacked Supporting
Documentation and Written Policies and Procedures
The monitoring processes Oklahoma designed and implemented for four of its GEER
grant initiatives could be strengthened. Specifically, Oklahoma did not develop written
policies and procedures for its monitoring processes, the monitoring processes for four
initiatives did not include a review of expenditures to ensure that GEER grant funds
were used for allowable purposes, and the processes did not require the entities
administering the initiatives to submit documentation supporting the data included in
their weekly status reports.
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Description of the Monitoring Processes
On June 22, 2020, Oklahoma contracted with Shyft Partners43 to provide project
management services, which included monitoring efforts for Oklahoma’s CARES Act
projects. Shyft Partners’ monitoring efforts were primarily focused on monitoring
initiatives’ milestone dates and metrics. In August 2020, Shyft Partners verbally agreed
to include the five GEER grant initiatives in its monitoring efforts.44
Oklahoma assigned a project manager or a sponsor to each GEER grant initiative.45 The
project manager or sponsor was responsible for completing and submitting weekly
status reports to Shyft Partners. Shyft Partners assisted the project manager or sponsor
with developing the metrics and timelines that would be included in the status reports.
The status reports included key metrics (for example, number of new applications,
number of new awards, funds available), budget balances, milestone data (such as
description of milestone, start date, estimated completion date), and risk level (for
example, “blue” means approved but not started, “green” means active and meeting
metrics, “amber” means active with some concerns, and “red” means active with major
concerns).
Shyft Partners reviewed the status reports to determine whether there were any risks
identified with the initiative’s status, and if applicable, discussed the issues with the
project manager or sponsor to determine how the issues could be resolved. For
example, the status reports for the Learn Anywhere Oklahoma initiative from
September 4, 2020, to September 25, 2020, were assigned an “amber” risk level, which
means the initiative was active, but the project sponsor had concerns about the
initiative and it needed to be monitored closely. In the status reports, the project
sponsor explained that there was a customer service issue with the contractor that was
impacting the schools’ ability to enroll students under the initiative. Shyft Partners
discussed the issue with the project manager and sponsor to get it resolved, and then
on the October 2, 2020, status report, the sponsor changed the risk level to “green,”
which means the initiative was active and on track.
43
Shyft Partners is a company that provides project management and other services.
44 The contract information was obtained from our correspondence with the partners of Shyft Partners.
45 All the initiatives had both a project manager and a project sponsor except the Skills to Rebuild and
Bridge the Gap initiatives, which only had a project sponsor. The project manager was responsible for
the day-to-day operation of the initiative and for reporting. The project sponsor was ultimately
responsible for the project.
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Shyft Partners’ contract ended in late January 2021. In February 2021, project managers
or sponsors for the GEER grant initiatives began submitting the status reports every
2 weeks to Oklahoma’s former Director of Statewide Operations for the Office of the
State Chief Operation Officer (Director of Statewide Operations). The former Director of
Statewide Operations monitored the initiatives by reviewing the status reports to
identify management issues and to determine whether established milestones were
completed. She was focused on keeping the initiatives on track and working with the
project managers and sponsors to prepare for the close-out process.
Weaknesses of the Monitoring Processes
Oklahoma did not have written policies and procedures for the monitoring process
described. In addition, although the status reports contained information on the
amount of funds expended to date for each initiative, they did not include descriptions
of the expenditures, nor did Oklahoma require the entities that received the GEER grant
funds to provide documentation to support the reported expended amounts.
We also found that although the project managers or sponsors were required to submit
status reports, Oklahoma did not require them to submit documentation to support the
accuracy and completeness of the information included in the status reports. For
example, a status report for the Skills to Rebuild initiative included the number of GEER
grant-funded waivers that Tri-County awarded to students;46 however, documentation
to support the number of waivers awarded was not submitted with the report.
Therefore, Oklahoma could not ensure that the number of tuition waivers that Tri-
County reported was accurate.
Oklahoma officials performed limited monitoring of the two initiatives (Bridge the Gap
and Stay in School Fund) administered by ClassWallet. Although ClassWallet provided
the current Secretary of Education with status reports for the two initiatives, the reports
did not include any expenditure data. Oklahoma’s OEQA contract with ClassWallet
provided Oklahoma access to ClassWallet’s system to run reports with summaries of
grant recipient-purchased items and related amounts; and according to ClassWallet’s
Chief Executive Officer, in August 2020, ClassWallet offered Oklahoma access to its
system. However, the former Director of Statewide Operations did not request system
access until February 2021. The former Director of Statewide Operations logged into the
system once after receiving access.
46 Tri-County gave waivers to students to cover the tuition costs for certificate programs in high demand
occupations, such as nursing and computer networking. GEER grant funds were used to pay for the
tuition costs.
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According to Question A-11 of the Department’s Frequently Asked Questions about the
GEER Fund, the Governor must designate a State Agency as the fiscal agent to
administer the GEER Fund. The fiscal agent is responsible for overseeing and monitoring
all GEER Fund activities in the State.
Also, the U.S. Government Accountability Office’s Standards for Internal Control in the
Federal Government Principle 10 states that management should design appropriate
types of control activities for the entity’s internal control system. Control activities help
to reasonably ensure compliance with applicable requirements. Control activities also
work to identify and address weaknesses in the system of internal controls. One such
control activity is having written policies and procedures. Also, Oklahoma’s Grant Award
Notification, Enclosure 4, states that “all grantees and subgrantees must have
procedures for determining the allowability of costs for their awards.”
According to 2 C.F.R. section 200.303 (a) and (c), a non-Federal entity should establish
and maintain effective internal control over the Federal award that provides reasonable
assurance that it is managing the award in compliance with applicable Federal statutes,
regulations, terms, and conditions. Further, the non-Federal entity must also evaluate
and monitor its compliance with statute, regulations, and the terms and conditions of
Federal awards.
According to 2 C.F.R. section 200.331, State grantees (pass-through entities) must
establish monitoring priorities based on the risks posed by each subgrantee and monitor
the fiscal activity of subgrantees as necessary to ensure that the subaward is used for
authorized purposes; complies with Federal statutes, regulations, and the terms and
conditions of the subaward; and that subaward performance goals are achieved.
The weaknesses we identified in Oklahoma’s GEER grant monitoring processes can be
attributed to the designated fiscal agent’s lack of experience and understanding of the
requirements for overseeing Federal grant programs. According to the former Director
of Statewide Operations, the GEER grant was a small bucket of funds made available to
Oklahoma at a time when they were rapidly deploying $1.26 billion in Coronavirus Relief
Funds and given the specific and separate nature of the GEER grant funds, as well as a
change in personnel at the Secretary of State's Office, there may have been a lapse in
communication relating to the monitoring of the grant funds. She further explained that
the Secretary of State was the designated fiscal agent responsible for oversight of the
GEER grant.47 However, that office did not normally oversee Federal grant programs.
47
Effective August 6, 2021, Oklahoma changed the person responsible for the oversight of the GEER
grant to its Director of Grants Management.
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The Department’s GEER grant Certification and Agreement requires that the State and
other entities comply with all applicable regulations and guidance, including the
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards in 2 C.F.R. part 200. This requirement contained references to Federal
monitoring regulations. Therefore, Oklahoma should have been aware of its
responsibilities regarding Federal monitoring requirements because the State attested
to its awareness by signing Part D of the GEER grant Certification and Agreement.
Without a more robust monitoring process there is an increased risk that the GEER grant
funds are used for unallowable purposes.
Lack of Internal Controls Over the Monitoring of Bridge the Gap
Grant Funds
Oklahoma did not use all available controls in ClassWallet’s digital wallet system to
monitor the expenditures of its GEER grant-funded Bridge the Gap initiative. ClassWallet
provided Oklahoma with a document describing, among other things, the data flow
associated with the Bridge the Gap initiative, and the available system controls. One
control, which Oklahoma used, was to have an administrator specify the online vendors
from which families with $1,500 Bridge the Gap microgrants were allowed to purchase
items. Another control was to have an administrator limit the items available for
purchase to only those items that it had pre-approved as being education-related, which
ClassWallet’s Chief Executive Officer informed us that Oklahoma’s current Secretary of
Education declined to use.48
When we asked the current Secretary of Education why the pre-approved purchases
option was not used, he said that his understanding was that certain vendors had been
removed from ClassWallet’s digital wallet system because they did not line up with the
purpose of the grant, and that Bridge the Gap grant recipients could only purchase
items from the remaining vendors on ClassWallet’s digital wallet system. The current
Secretary of Education also stated that he gave blanket approval of all vendors on
ClassWallet’s system, and that the approval applied to items purchased from those
approved vendors.
48 Oklahoma’s current Secretary of Education was not the Secretary of Education at the time he made
the decision to not use the purchase pre-approval function. Instead, he was (and still is) the Executive
Director of a nonprofit organization called Every Kid Counts Oklahoma. In his capacity as the Executive
Director of Every Kid Counts Oklahoma, he participated in the contracting process between Oklahoma
and ClassWallet and then Oklahoma’s OMES wrote and signed the contract with ClassWallet. OEQA also
signed the contract.
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Although the current Secretary of Education’s understanding was correct as it relates to
the approved vendor list, he did not consider that microgrant recipients were not
limited in the types of items that they could purchase from these approved vendors on
the digital wallet system. Vendors on the digital wallet system such as Home Depot,
Lowes, and Staples sell many items that are not education-related, and we found that
grant recipients purchased some of those items, as explained below.
Unallowable Purchases
Under the Bridge the Gap initiative, families were awarded $1,500 microgrants (held in
an online account for each family) to directly purchase educational products from the
vendors included on ClassWallet’s digital wallet platform. If a family’s total expenditures
exceeded $1,500, they had to use their own funds to pay the difference. As explained in
the section above, vendors on the digital wallet platform sell both education-related
and noneducation-related items. When families made purchases on ClassWallet’s digital
wallet platform, there were no controls in place to keep families from purchasing items
that were not education-related.
To determine whether Bridge the Gap grant recipients purchased noneducation-related
items, we analyzed the universe of 98,126 purchases (with accompanying product
descriptions), that were paid for with $6,126,614 of GEER grant funds49 and identified
56 keywords representing products that did not appear to be education-related. Using
analytical software, we identified 3,184 purchases50 with product descriptions
containing at least one of the 56 keywords. For each of those 3,184 purchases, we
analyzed the entire product descriptions to determine whether the products were
education-related. We found that all 3,184 purchases were for items that did not appear
to be education-related. Those purchases totaled $652,720. Some of those purchases
included smartwatches, doorbells, sofas, televisions, and air conditioners.51
For a summary of the unallowable purchases by keyword see Appendix B. We did not
perform any analysis on the remaining 94,942 expenditures, totaling $5,473,894, that
49
The 98,126 purchases do not include purchases that were later refunded.
50 We only included purchases over $25 in our analysis.
51 Because families were allowed to use their personal funds to help pay for items under a single
transaction that in total exceeded their available grant funds, some of the 3,184 purchases we identified
as not appearing to be education-related could have been paid for under such a transaction. However,
with the documentation we were provided, it was not possible for us to make that determination.
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did not match any of the keywords in our analysis; however, this universe may also
include expenditures for noneducation-related products.
According to 2 C.F.R. section 200.331, State grantees (pass-through entities) must
establish monitoring priorities based on the risks posed by each subgrantee and monitor
the activity of subgrantees as necessary to ensure that the subaward is used for
authorized purposes, in compliance with Federal statutes, regulations, and the terms
and conditions of the subaward; and that subaward performance goals are achieved.
As demonstrated above, the decision to not take advantage of the digital wallet
system’s pre-approved purchases option resulted in grant recipients (families) using
Bridge the Gap GEER grant funds to purchase items that were not education-related.
Using the optional controls would have improved Oklahoma’s efforts to monitor the
allowability of grant expenditures, especially considering that grant recipients were
allowed to use their own funds when making purchases that exceeded their
$1,500 grant allocation.
OSDE’s CARES Act Incentive Grants Reimbursement and
Monitoring Processes for LEAs Were Generally Designed and
Implemented in Accordance with the CARES Act, Federal
Regulations, and Grant Conditions
OSDE developed and implemented a GEER grant reimbursement process that provided
reasonable assurance on the allowability of expenditures for which LEAs requested
reimbursement with GEER grant funds. We also found that OSDE designed and
implemented a monitoring process that ensured LEAs used GEER grant funds for
allowable purposes.
OSDE’s GEER Grant Reimbursement Process
OSDE developed and implemented a process to disburse GEER grant funds to applicable
LEAs on a reimbursement basis that provided reasonable assurance on the allowability
of expenditures. OSDE conducted a webinar and training that included topics such as
allowable expenditures, guidelines, required assurances, and instructions on the
application and reimbursement processes.
To receive GEER grant reimbursements, OSDE required LEAs to submit a claim form,
which included the LEA’s approved budget amount, purchase order numbers, account
object codes, purchase dates, vendor names, and amount paid for each purchase. OSDE
required LEAs to certify that the expenditures listed on the claim form were for the
purposes and objectives set forth in the terms and conditions of the Federal award.
OSDE also required LEAs to submit documentation, such as purchase orders,
requisitions, invoices, and receipts, to support the reimbursement request. OSDE
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reviewed the supporting documentation to determine whether the purchases were
allowable under the CARES Act and other applicable Federal laws. OSDE uses a
Reimbursement Request Review Checklist to document its review of the LEAs’
expenditures. We reviewed some examples of the reimbursement packages and
supporting documentation and found OSDE’s reimbursement process to be sufficient for
determining expenditure allowability.
OSDE’s GEER Grant Monitoring Process
OSDE designed and implemented a monitoring process that provided an additional level
of assurance that LEAs used GEER grant funds for allowable purposes. Specifically, OSDE
developed a written monitoring plan called the CARES Incentive Grant Project 789 Sub-
Grant Monitoring Tool.52 The monitoring tool includes requirements for LEAs to submit
two mid-year evaluation reports and a final evaluation report53 that include a summary
of the LEA’s grant activities, required deliverables, and a budget narrative describing
funds spent on travel, equipment, supplies, services,54 and other items. The first
mid-year evaluation report was due on February 15, 2021. OSDE reviewed the reports
for completeness and to ensure the information was consistent with data contained in
requests for reimbursement and the LEA GEER grant agreement. OSDE also used the
evaluation reports in its risk analysis to determine which LEAs would receive a desk or
on-site monitoring review.
To determine the type of monitoring LEAs would receive, OSDE conducted a risk analysis
that categorized each LEA as high risk, moderate risk, or low risk, using indicators such
as the LEA’s timely submission of progress reports and the quality of their financial
reporting. OSDE could assign a maximum of 15 points to an LEA, with higher points
representing higher risk.
OSDE classified LEAs that scored less than eight points as low risk, with no monitoring
required. LEAs that scored between 8 to 12 points are classified as moderate risk and
will be monitored by a desk review. LEAs that scored above 12 points are classified as
high risk and will be monitored by an on-site review.
52
For the CARES Act Incentive Grant, OSDE awarded LEAs grant funds using $8 million in GEER grant
funds and $8 million in Elementary and Secondary School Emergency Relief Set Aside funds.
53 The second mid-year evaluation report was due on February 15, 2022, and the final evaluation report
will be due by September 30, 2022.
54
The CARES Act Incentive Grant Project 789 Sub-Grant Monitoring Tool defined contractual services as
a contract for goods and services that could not be provided by existing LEA staff.
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Of the 72 LEAs that received CARES Act Incentive Grants GEER grant funds, OSDE
determined that 57 LEAs will receive no review, 11 LEAs will receive desk monitoring,
and 4 LEAs will receive on-site monitoring. As of September 3, 2021, OSDE has
conducted desk reviews of 10 LEAs that received a CARES Act Incentive Grant funded by
either GEER grant funds or ESSER Grant Set Aside funds, to determine LEA compliance in
the following areas: administration/purchasing, contractual services, travel, equipment,
and supplies. OSDE used a Desk and Site Visit Monitoring Checklist to conduct the desk
reviews. Based on our review of the checklist, we concluded that it was sufficient to
assess compliance with grant requirements and to determine whether GEER grant funds
were used for allowable purposes. OSDE did not identify any issues with the 10 LEAs
that required corrective action. OSDE has placed on-site reviews on hold because of
COVID restrictions; however, it plans to complete both the desk and on-site monitoring
by May 31, 2022. The on-site reviews will use the same checklist as the desk reviews.
Within 30 days following the desk or on-site monitoring review, OSDE plans to provide a
report to the LEA that will include any violations identified and related corrective
actions.
Recommendations
We recommend that the Assistant Secretary for the Office of Elementary and Secondary
Education require the Governor of Oklahoma to—
2.1 Return $652,720 to the Department for the unallowable Bridge the Gap
expenditures we identified or provide documentation to support that the
expenditures were allowable or the items were purchased with personal funds.
2.2 Perform a 100-percent review, or review a statistical sample, of the
$5,473,894 in Bridge the Gap expenditures that we did not review to determine
whether the expenditures were allowable, and if applicable, return the funds for
any unallowable expenditures to the Department.
2.3 Develop and implement additional internal controls for the Skills to Rebuild,
Learn Anywhere Oklahoma, Bridge the Gap, and Stay in School Fund initiatives
that include written monitoring procedures for those processes that are already
in place, and for additional procedures that include a review of expenditures
and supporting documentation, and a review of documentation that supports
the information in initiatives’ weekly status reports.
2.4 Develop and implement internal controls to ensure that fiscal agents for Federal
grant programs obtain an understanding of the rules and regulations
surrounding the grant programs they are tasked with overseeing.
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Oklahoma Comments
Oklahoma did not explicitly state whether it agreed or disagreed with the finding and
recommendations; however, it identified corrective actions that it plans to take to address our
finding and recommendations. Oklahoma stated that it began refining its processes and policies
to ensure controls are in place to properly administer GEER grant and other Federal funds and is
continuing to improve its monitoring processes and policies. Oklahoma stated that it planned to
update its policies and procedures on or before November 1, 2022, and subsequently provided
the updated policies and procedures. Oklahoma also stated that the Director for the Office of
Grants Management plans to work with grantees to ensure compliance with oversight and
reporting requirements throughout the bidding process.
Regarding the Bridge the Gap initiative, Oklahoma stated that it was working in a “high-pressure
environment” due to the effects of COVID, acted in good faith, complied with all State
procurement laws, operated in conformity with the congressional intent of the GEER program,
and took appropriate measures on the front-end to ensure funds associated with Bridge the Gap
initiative were properly expended when it contracted with ClassWallet. Oklahoma stated that it
contracted with ClassWallet not only because ClassWallet represented itself as a subject matter
expert, but because ClassWallet claimed its digital wallet platform “virtually eliminates the risk
of fraud or misuse of funds.” In addition, Oklahoma stated that in its contract with the State,
ClassWallet provided assurance that its digital wallet platform would protect the State against
potential fraud. Oklahoma stated that to the extent that any deficiencies exist regarding the
Bridge the Gap initiative, they are wholly attributable to ClassWallet.
OIG Response
Oklahoma’s proposed corrective action for Recommendation 2.3, if properly
implemented, is responsive to our recommendation. Further, if the Uniform Guidance
for Grants Information document discussed in Finding 1 is distributed to those entities
overseeing Federal grant programs, including fiscal agents, in addition to those entities
being awarded Federal funds, its implementation will be responsive to
Recommendation 2.4. However, Oklahoma’s proposed corrective actions are not
responsive to the two remaining recommendations (Recommendations 2.1 and 2.2).
Specifically, Oklahoma did not state that it would return funds or provide
documentation for the questionable Bridge the Gap expenditures that we identified and
perform a review of and return funds for any other unallowable Bridge the Gap
expenditures.
Oklahoma’s statement that any deficiencies relating to the Bridge the Gap initiative are
wholly attributable to ClassWallet is not in line with Federal laws and regulations that
require Oklahoma, as the recipient of the GEER grant funds, to ensure that its grant
funds are used properly. As we state in the finding, Oklahoma did not take advantage of
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the pre-approval of purchases option that ClassWallet offered for Bridge the Gap
initiative expenditures, nor did Oklahoma perform a review of the initiative’s
expenditures, which resulted in grant recipients using Bridge the Gap GEER grant funds
to purchase items that were not education-related. Implementing the optional control
would have allowed Oklahoma to more timely and better monitor whether grant funds
were being used for allowable purposes.
We did not change our finding or recommendations as a result of information submitted
subsequent to our audit period.
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Finding 3. Oklahoma Did Not Follow Cash
Management Regulations
Oklahoma did not comply with the GEER grant award Federal cash management terms
and conditions. On July 2, 2020, when Oklahoma drew down its entire GEER grant award
of $39.9 million, it did not minimize the amount of time between its drawdown of the
funds and its disbursal of the funds to subrecipients, and it did not have an immediate
cash need for the funds at the time of the draw down. It took Oklahoma 14 to 89 days to
disburse $39 million of the $39.9 million to OSDE, Tri-County, SVCSB, and OEQA.
Furthermore, three of those subrecipients which are State agencies (OSDE, SVCSB, and
OEQA), did not begin disbursing the funds they received until 3 to 46 days after
receiving the funds from Oklahoma. Oklahoma never disbursed the remaining
$919,354 that it had drawn down because it had no plans for the funds. Oklahoma
returned the $919,354 to the Department on February 3, 2021, 7 months after it had
drawn down the funds.55 Drawing down an excessive amount of funds without an
immediate cash need increases the risk of mismanagement of the funds.
Oklahoma Did Not Have an Immediate Cash Need for Grant
Funds It Drew Down or Minimize the Time Between Funds It
Drew Down and Disbursed
On July 16, 2020, 14 days after Oklahoma drew down its GEER grant award, Oklahoma
disbursed $8 million to OSDE for the CARES Act Incentive Grants initiative for LEAs.
Because OSDE’s policy was to disburse the funds to LEAs on a reimbursement basis, and
the first LEA did not submit a request for reimbursement until August 20, 2020 (49 days
after Oklahoma drew down the award and 35 days after OSDE received the funds from
Oklahoma), Oklahoma did not have an immediate cash need for the funds and
Oklahoma did not minimize the time between its drawdown of the funds and OSDE’s
disbursement of the funds to the LEAs. In addition, as of August 2021, OSDE still had not
disbursed $1,351,352 of its GEER grant funds to LEAs because the LEAs had not
requested the funds.
Oklahoma disbursed $12 million56 to SVCSB for the Learn Anywhere Oklahoma initiative
on July 30, 2020, 28 days after Oklahoma drew down its GEER grant award. In addition,
55 In May 2021, Oklahoma allocated the $919,354 in GEER grant funds to OSDE for its Reallocation Grant.
56 The $12 million included $11.5 million to Edmentum for students and LEAs to purchase online
curriculum and $500,000 to the Oklahoma Public School Resource Center for helpdesk services and
administrative costs.
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it was not until 4 days later, on August 3, 2020, that SVCSB signed a $11.5 million
contract with Edmentum, which was responsible for administering the initiative.
Furthermore, it was not until September 14, 2020, 74 days from the time Oklahoma
drew down the funds and 46 days from when SVCSB received the funds, that SVCSB
disbursed the funds to Edmentum. Therefore, SVCSB did not have an immediate cash
need for the funds, Oklahoma did not minimize the amount of time between its
drawdown of the funds and its disbursal of the funds to SVCSB, and SVCSB did not
minimize the time it took to disburse the funds to Edmentum. Edmentum returned
$419,684 of unused GEER grant funds (unspent administrative and helpdesk costs) to
Oklahoma, which returned the funds to the Department on May 6, 2021, 10 months
after Oklahoma’s initial draw down of the funds. As of May 2021, Edmentum still had
$1,961,964 in unused GEER grant funds that were supposed to be used for students and
LEAs to purchase online curriculum; those funds had not been returned to the
Department as of August 6, 2021.
Oklahoma disbursed $18 million to OEQA for the Bridge the Gap initiative ($8 million)
and the Stay in School Fund initiative ($10 million) on August 14, 2020, 43 days after
Oklahoma drew down its GEER grant award. On August 17, 2020, OEQA disbursed the
funds to ClassWallet, with which it had signed an $18 million contract on
August 7, 2020, for administering the two initiatives. Therefore, OEQA did not have an
immediate cash need for the funds, and Oklahoma did not minimize the amount of time
between its drawdown of the funds and its disbursal of the funds to OEQA. ClassWallet
returned to Oklahoma a total of $1,563,307 in unused funds ($1,504,720 from the
Bridge the Gap initiative, $56,629 from the Stay in School Fund initiative, and
$1,958 that ClassWallet did not distribute to either initiative). Oklahoma returned these
funds to the Department on April 21, 2021, 9 months after Oklahoma drew down the
funds. On August 3, 2021, ClassWallet also returned an additional $62,150 in unused
funds to Oklahoma, which returned it to the Department in August 2021, 13 months
after drawing down the funds.
On September 29, 2020, Oklahoma disbursed $1 million of its GEER grant funds to
Tri-County for the Skills to Rebuild initiative. Because the disbursement occurred
89 days after Oklahoma drew down its GEER grant award, Oklahoma did not minimize
the amount of time between its drawdown of the funds and its disbursement of the
funds. Tri-County began awarding tuition waivers to students on July 15, 2020, using its
own funds, and then reimbursed itself once it received the GEER grant funds. Table 2
summarizes the GEER grant funds disbursed, unspent as of August 2021, and returned
for each subrecipient.
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Table 2. GEER Grant Funds Disbursed, Unspent, and Returned
Number of Days
Number of Days
Between
Amount of between Draw
Subgrantee’s Funds Returned
Funds Down and Funds Unspent as of
Subrecipient Receipt of Funds as of August
Disbursed to Disbursal (Draw August 2021
and When it 2021
Subrecipient down occurred
Began Disbursing
on July 2, 2020)
the Funds
OSDE $8,000,000 14 35 $1,351,352 $0
Tri-County $1,000,000 89 0 $0 $0
SVCSB $12,000,000 28 46 $1,961,964 $419,684
OEQA $18,000,000 43 3 $1,625,457 $1,625,457
We looked for evidence such as emails, cash requests, and contracts that might
demonstrate Oklahoma had an immediate cash need for the GEER grant funds it drew
down. However, we found no evidence to support that any of the four subrecipients had
an immediate cash need for the funds.
Oklahoma should have been aware of its responsibilities regarding Federal cash
management requirements. The Department provided Oklahoma with a GEER Grant
Award Notification, which contained references to Federal cash management
regulations. Specifically, an attachment to the Department’s Grant Award Notification,
“Recipients of ED Grants and Cooperative Agreements Frequently Asked Questions on
Cash Management,” states that grantees and subgrantees receiving Federal grant funds
are responsible for maintaining internal controls to manage Federal funds
(2 C.F.R. 200.302 and 303) and to ensure that grantees and subgrantees are aware of
the requirements for cash management (2 C.F.R. Part 200 subpart D). It also states that
grantees must monitor both their drawdowns and those of their subgrantees to assure
their cash advances are timely and for the proper amount needed. In order to receive
funds, the Department required Oklahoma to sign a GEER grant Certification and
Agreement. Oklahoma’s signature on the Certification and Agreement signified an
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attestation to comply with the cash management requirements. In addition, in the
Department’s G5 grants management system, grantees must certify that the funds they
draw down are for the immediate needs of the program. The Department also provided
States with technical assistance about the cash management requirements in its GEER
Fund office hours sessions in August 2020. 57
According to 31 C.F.R. section 205.33(a),
A State must minimize the time between the drawdown of Federal
funds from the Federal government and their disbursement for Federal
program purposes. A Federal Program Agency must limit a funds
transfer to a State to the minimum amounts needed by the State and
must time the disbursement to be in accord with the actual, immediate
cash requirements of the State in carrying out a Federal assistance
program or project. The timing and amount of funds transfers must be
as close as is administratively feasible to a State's actual cash outlay for
direct program costs and the proportionate share of any allowable
indirect costs.
Oklahoma’s noncompliance with cash management requirements could be attributed to
the GEER grant fiscal agent not being familiar with how to administer Federal grant
programs. The Secretary of State’s office was responsible for oversight of the GEER
grant; however, officials from the office do not normally administer Federal grant
programs and may not have drawn down Federal funds in the past. A consultant (a
former State Budget Office employee) who was working with OMES,58 told us that the
former Secretary of State gave her the directive to draw down 100 percent of the funds.
Also, according to the former Director of Statewide Operations, amid a significant influx
of Federal funding for the pandemic, she believed that the Secretary of State's Office
confused the purpose of the GEER funding with Coronavirus Relief Funds. The
Coronavirus Relief Funds were immediately made available to Oklahoma in full and she
believes that the former Secretary of State drew down all of the GEER grant funds
because he believed the process to be similar to the Coronavirus Relief Funds process.
57 The Department held office hour sessions so that States could ask clarifying questions on reporting
and other GEER grant-related topics.
58 The consultant informed us that her former supervisor, the Oklahoma State Budget Director, and the
former Secretary of State asked her to come back to work at the State to help with the Coronavirus
Relief Funds.
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Oklahoma did not identify a fiscal agent that had the appropriate experience with
overseeing Federal grant funds as recommended in Department GEER grant guidance.
In addition, the Secretary of State’s office did not have written cash management
policies and procedures, including procedures for drawing down grant funds. According
to 2 C.F.R. section 200.302(b)(6), the financial management system of each non-Federal
entity must provide for written procedures to implement the requirements of 2 C.F.R
section 200.305.
According to Oklahoma’s Director of Statewide Accounting, each agency that receives a
Federal grant is responsible for establishing its drawdown process and would have their
own written policies and procedures. Also, although OSDE had written cash
management policies and procedures, it did not follow them. OSDE’s cash management
policies and procedures state that Federal fund payments to LEAs are drawn down for
expenditures submitted by LEAs for reimbursement and approved by OSDE’s program
office. However, although OSDE’s policy is to draw down funds as LEAs submit
reimbursement requests, they still accepted the entire $8 million in GEER grant funds
and did not return the funds even while knowing that they did not have an immediate
cash need for them.
Question A-11 of the U.S. Department of Education’s Frequently Asked Questions about
the GEER Fund states that the Governor must designate a State Agency as the fiscal
agent to administer the GEER Fund. The fiscal agent is responsible for overseeing and
monitoring all GEER Fund activities in the State. Therefore, it is recommended that the
Governor designate an agency with appropriate experience in administering Federal
grants. Effective August 6, 2021, Oklahoma changed the person responsible for the
oversight of the GEER grant to its Director of Grants Management.
Also, according to 2 C.F.R section 200.303, the non-Federal entity must, “Establish and
maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with
Federal statutes, regulations, and the terms and conditions of the Federal award.” It
also states that the non-Federal entity must evaluate and monitor its compliance with
statutes, regulations, and the terms and conditions of Federal awards and take prompt
action when instances of noncompliance are identified including noncompliance
identified in audit findings.
According to 2 C.F.R. section 200.305(a), for States, payments are governed by Treasury-
State Cash Management Improvement Act agreements and default procedures codified
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at 31 C.F.R. Part 205 and Treasury Financial Manual 4A-2000, “Overall Disbursing Rules
for All Federal Agencies.”59
Although Oklahoma later returned its unused and unallocated GEER grant funds to the
Department and subsequently reallocated those funds to OSDE under its Reallocation
Grant, Oklahoma still maintained funds for up to 13 months that it did not use.
Additionally, drawing down excessive amount of funds without an immediate cash need
increases the risk of mismanagement of the funds.
After we issued the draft report, we found that Oklahoma returned an additional
$1,734,385 in GEER grant funds to the Department.60
Recommendations
We recommend that the Assistant Secretary for the Office of Elementary and Secondary
Education require the Governor of Oklahoma to—
3.1 Develop and implement controls to ensure that Oklahoma’s State agencies that
receive Federal funds have written cash management policies and procedures,
including policies for the draw down and disbursement of grant funds in
accordance with Federal requirements.
3.2 Return to the Department any unexpended GEER grant funds applicable to our
audit scope that are being held by GEER grant subrecipients.
3.3 Develop and implement internal controls to ensure that fiscal agents for Federal
grant programs obtain an understanding of the rules and regulations surrounding
the grant programs they are tasked with overseeing.
3.4 Require its fiscal agent or State program representative to work closely with the
Department to ensure that other GEER grants are administered in compliance
with cash management rules and with any actions the Department determines
are needed, if warranted.
59 The Department awarded Oklahoma its GEER grant funds on May 1, 2020, and Oklahoma’s Fiscal
Year 2021 Treasury State Agreement was approved June 30, 2020. We noted that the GEER grant was
not included in the agreement.
60
Oklahoma returned $867,193 on October 16, 2021, and an additional $867,193 on
November 18, 2021.
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Oklahoma Comments
Oklahoma did not explicitly state whether it agreed or disagreed with the finding and
recommendations. However, Oklahoma stated that it had begun implementing new processes
and policies reflective of the recommendations that would be fully implemented on or before
November 1, 2022. Oklahoma subsequently provided its updated policies and procedures.
OIG Response
Oklahoma’s proposed corrective actions, if properly implemented to ensure compliance
with applicable laws and grant requirements for future Federal funds, are responsive to
three of the four recommendations relating to Finding 3 (Recommendations 3.1, 3.3,
and 3.4). We did not change our finding or recommendations as a result of information
submitted subsequent to our audit period.
Regarding Recommendation 3.2, we obtained documentation after the conclusion of
our audit work that supports that Oklahoma returned unexpended GEER grant funds to
the Department. However, because this was done after the conclusion of our audit
work, we are not able to verify whether all unexpended funds that were being
maintained by Oklahoma’s GEER grant subrecipients were returned. As such, Oklahoma
should work with the appropriate Department officials to ensure that all unexpended
GEER grant funds applicable to our audit scope have been returned to the Department.
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Appendix A. Scope and Methodology
Our audit covered Oklahoma’s control activities related to the administration of the
GEER grant. Specifically, our audit covered Oklahoma’s policies, procedures, and other
controls to ensure that GEER grant funds were used to support LEAs and IHEs that were
most significantly impacted by the coronavirus or LEAs, IHEs, or other education-related
entities that were deemed essential for carrying out emergency educational services.
Our audit also covered Oklahoma’s policies, procedures, and other controls to ensure
that subgrantees used GEER grant funds in accordance with the CARES Act and other
applicable Federal requirements. Our review covered Oklahoma’s GEER grant award and
monitoring processes from March 13, 2020, through August 26, 2021. We conducted
fieldwork virtually due to the national pandemic from November 30, 2020, through
August 26, 2021. We performed testing on Oklahoma’s grant applications through
January 2021, and expenditures through March 2021. We held an exit conference with
Oklahoma officials on August 26, 2021, to discuss the results of our audit.
To achieve our audit objectives, we gained an understanding of the CARES Act, the
Uniform Grant Guidance at 2 C.F.R. Part 200, and Department guidance relevant to our
audit objectives, including the Department’s 2020 GEER Frequently Asked Questions.
We reviewed 2 C.F.R. section 200.303 and the U.S. Government Accountability Office’s
“Standards for Internal Control in the Federal Government.” We also reviewed
requirements for managing Federal funds, including 2 C.F.R. section 200.302, Financial
Management, and 2 C.F.R. section 200.305, Payment.
We also performed the following procedures:
• Reviewed the organization charts for the Governor’s Office, OSDE, OEQA, and
SVCSB to determine those positions or personnel responsible for awarding,
administering, and monitoring the GEER grant.
• Interviewed Oklahoma officials to obtain the rationale for selecting the
Secretary of State’s office as the designated State agency to administer the
funds and to gain an understanding of the processes used for determining how
the GEER grant funds were appropriated, allocated, awarded, and used.
• Interviewed Tri-County officials and reviewed related documentation to gain an
understanding of the Skills to Rebuild initiative.
• Interviewed SVCSB officials and reviewed related documentation to gain an
understanding of the Learn Anywhere Oklahoma initiative.
• Reviewed Oklahoma’s GEER grant Certification and Agreement (application), its
required 45-Day Report and clarification document submitted to the
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Department, documentation related to the use of funds, and any
communications with the Department to gain an understanding of how
Oklahoma intended for the funds to be used.
• Reviewed Oklahoma’s contracts with Edmentum for the Learn Anywhere
Oklahoma initiative and with Class Wallet and its subcontractor FACTS
Management for the Bridge the Gap and Stay in School Fund initiatives to gain
an understanding of the contract terms and scope of work.
• Interviewed ClassWallet and FACTS Management officials to gain an
understanding of the Bridge the Gap and Stay in School Fund initiatives.
• Reviewed OSDE’s grant awards to LEAs and Oklahoma’s awards to families
under the Bridge the Gap and Stay in School Fund initiatives and tested a
sample of these awards to determine whether OSDE (for the CARES Act
Incentive Grants initiative) and Oklahoma (for the Bridge the Gap initiative and
Stay in School initiative) followed their award processes (In the Sampling
Methodology section of this report, see the CARES Act Incentive Grants initiative
Samples, the Bridge the Gap initiative Samples, and the Stay in School Fund
initiative Samples).
• Obtained and reviewed the status of Oklahoma’s maintenance of effort waiver
request.
• Reviewed and evaluated the criteria, policies, procedures, and internal controls
OSDE used to determine which LEAs were most significantly impacted by the
coronavirus.
• Reviewed Oklahoma’s GEER grant drawdowns to determine whether Oklahoma
complied with cash management regulations and guidance. We calculated the
number of days between Oklahoma’s receipt of the funds drawn down and the
dates that Oklahoma allocated and expended the funds.
• Reviewed and evaluated OSDE’s monitoring plan procedures for ensuring that
GEER grant funds were used in accordance with the CARES Act and other
applicable Federal requirements.
• Reviewed the status reports used to monitor Oklahoma’s GEER grant initiatives
to assess whether Oklahoma’s monitoring efforts would ensure that
subgrantees used GEER grant funds in accordance with the CARES Act and other
applicable Federal requirements.
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• Tested a sample of expenditures from the Bridge the Gap and Stay in School
Fund initiatives to ensure that GEER grant funds were used in accordance with
the CARES Act and other applicable Federal requirements.61 (In the Sampling
Methodology section of this report, see the Bridge the Gap and Stay in School
Fund Initiatives Samples.)
Sampling Methodology
To determine whether OSDE and Oklahoma followed their award processes for the
CARES Act Incentive Grants, Bridge the Gap, and Stay in School Fund initiatives, we
selected samples of LEAs and grant recipients to review. To test the reliability of the
data that OSDE and Oklahoma used for the CARES Act Incentive Grants, Bridge the Gap,
and Stay in School Fund initiatives, we also selected samples of LEAs and grant
recipients to review. To determine whether GEER grant funds were used for allowable
purposes, we performed an analysis of the Bridge the Gap initiative expenditures and
selected a sample of grant recipients to review for the Stay in School Fund initiative.
The results of our testing apply only to the samples selected and cannot be projected.
The sections below describe the sampling in detail.
Cares Act Incentive Grants Initiative Samples
To determine whether OSDE followed its award process for the CARES Act Incentive
Grants initiative we selected for review a sample of the LEAs that were awarded and a
sample of LEAs that were not awarded a CARES Act Incentive Grant. We selected a
nonstatistical stratified sample of 11 (15 percent) of the 72 LEAs that were awarded a
CARES Act Incentive Grant, using two strata: LEA applications that were reviewed by
three reviewers (18) and those that were not (54). We randomly selected one of the
18 LEAs that had a third reviewer. For the strata without three reviewers, we stratified
the 54 LEAs into 5 tiers. We randomly selected eight LEAs (two each from tiers 1–4) and
judgmentally selected the two LEAs in the fifth tier that had the largest award.
From the universe of 288 LEAs that were not awarded a CARES Act Incentive Grant, we
selected a nonstatistical stratified sample of 10 (3.5 percent) LEAs using 10 strata: 5 tier
61 We did not review a sample of expenditures for the CARES Act Incentive Grants, Skills to Rebuild, and
Learn Anywhere Oklahoma initiatives because we determined that the risk of an unallowable use of
funds was low due to the how the funds were used. In addition, Edmentum, the contractor for the Learn
Anywhere Oklahoma initiative, had a previous contract with Oklahoma.
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levels62 with 2 score levels (high or low). The application scores equal to or less than the
mean score of 76.32 were classified as low. Applications with a score greater than the
mean score of 76.32 were classified as high. Each tier included a high and a low score,
resulting in the 10 strata. We judgmentally selected the only LEA in tier 5 that had a low
score. From the remaining nine strata, we randomly selected one LEA.
For the sample of 11 LEAs that received an award, we confirmed that the reviewers’
scores supported the awarding decision for the LEA. We also confirmed that the LEA had
submitted an application, received an award notification from Oklahoma, signed
Oklahoma’s required assurances, and if applicable, offered equitable services to
nonpublic schools.
For the sample of 10 LEAs that did not receive an award, we confirmed that the
reviewers’ scores supported the awarding decision for the LEA, that the LEA submitted
an application, and the LEA signed Oklahoma’s required assurances.
To test the reliability of the award data, we downloaded the LEAs’ CARES Act Incentive
Grants application and award data that OSDE posted on its website and determined
whether the sum of all the awarded funds equaled $16 million. For the same
11 randomly selected LEAs we used in our award process testing, we determined
whether those LEAs received an award notification and whether the awarded amounts
matched. Table 3 shows the universe, sample sizes, and sampling methodologies related
to our testing of the CARES Act Incentive Grants Initiative.
62
We used the five LEA enrollment tiers developed by OSDE. The five tiers are identified in Table 1.
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Table 3. LEA Universes and Samples for the CARES Act Incentive Grants Initiative
Testing
Testing Universe Sample Size Methodology
Purpose
Award
One LEA selected using a stratified random
Process
11 sample from LEAs with a third reviewer, and
(LEAs that 72
(15.3 percent) 10 LEAs selected using a stratified random
were
sample from LEAs without 3 reviewers.
Funded)
Award
Stratified LEAs into 10 strata based on tier level
Process
and score level, then judgmentally selected
(LEAs that 288 10 (3.5 percent)
1 LEA from 1 stratum and randomly selected
were
1 LEA from the remaining 9 strata.
Unfunded)
Data
Reliability
Same sample that was used to test the award
(LEAs that 72 11 (3.7 percent)
process for LEAs that were funded.
were
Funded)
Bridge the Gap Initiative Samples
To determine whether ClassWallet followed the award process established by Oklahoma
for the Bridge the Gap initiative, we selected a random sample of 17 applicants
(2 percent) from the universe of 961 applicants (students) whose total expenditures
exceeded the $1,500 grant limit and were potentially noneducation-related. For each of
the 17 applicants, we confirmed that grant funds were awarded according to the
eligibility criteria for the Bridge the Gap initiative. We verified that the applicant
submitted an application and applicable required supporting documents. We
recalculated their Federal poverty level percentage and determined whether they met
the required income threshold at the time of their application.
To test the reliability of the award data, we recalculated each of the 17 applicants’
Federal poverty level percentage, traced the income data to source documents, and
determined whether Oklahoma’s decision that the applicant qualified for Bridge the Gap
grant funds followed Oklahoma’s awarding process.
To determine whether grant funds were used for allowable purposes, we analyzed the
universe of 98,126 purchases (with accompanying product descriptions), that were paid
for with $6,126,614 of GEER grant funds and identified 56 keywords representing
products that did not appear to be education-related. Using analytical software, we
identified 3,184 purchases with product descriptions containing at least one of the
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56 keywords. For each of those 3,184 purchases, we analyzed the entire product
descriptions to determine whether the products were education-related.
To test the reliability of the purchase data, we judgmentally selected three vendors’
invoices to give us a significant amount of coverage of the purchases made by the
applicants we sampled. These three invoices represented 23 (30 percent) of the
76 purchases made by 3 (18 percent) of the 17 applicants we sampled. We traced the
purchases to invoices and other supporting documentation to determine whether the
vendors received payment.
Table 4 shows the universe, sample sizes, and sampling methodologies related to our
testing of the Bridge the Gap Initiative.
Table 4. Universes and Samples for the Bridge the Gap Testing
Testing Purpose Universe Sample Size Methodology
Random sample of applicants that
961 17 applicants
Award Process expended over the $1,500 GEER award
applicants (2 percent)
amount.
Judgmentally selected vendors’
76 23 purchases invoices to give us a significant amount
Data Reliability
purchases (30 percent) of coverage of the purchases made by
the applicants we sampled.
Stay in School Fund Initiative Samples
To determine whether FACTS Management followed the award process established by
Oklahoma for the Stay in School Fund initiative, we selected a sample of 5 (5 percent) of
94 schools that received GEER grant funds. We judgmentally selected the five schools
that received the largest amount of Stay in School grant funds. From the five schools, we
randomly selected two applicants (students) from each school to test. For each of the
10 applicants, we verified that the applicant submitted an application and any required
supporting documents. We recalculated their Federal poverty level percentage and
determined whether the applicants met the required income threshold at the time of
their application.
To test the reliability of the award data, we used the randomly selected sample of
10 applicants described above and traced the income data to source documents and
recalculated their Federal poverty level percentage using the income data.
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To determine whether grant funds were used for allowable purposes and to test the
reliability of the data, we verified whether Oklahoma made payments to the nonprofit
private schools attended by the ten applicants in our sample.
Table 5 shows the universe, sample sizes, and sampling methodologies related to our
testing of the Stay in School Fund Initiative.
Table 5. Universes and Samples for Stay in School Fund Initiative Testing
Testing Purpose Universe Sample Size Methodology
Judgmentally selected schools
Award Process 5 schools
94 schools that received the largest
Step 1 (Schools) (5.3 percent)
funding amount.
1,979 students
Award Process that received 10 students Randomly selected two
Step 2 (Students) grant funds from (0.5 percent) students from the five schools.
the 5 schools
1,979 students Randomly selected two
Data Reliability that received 10 students students from the five schools
Award Data grant funds from (0.5 percent) (this is the same sample of
the 5 schools students from the row above).
1,979 students Randomly selected two
Data Reliability that received 10 students students from the five schools
Payment Data grant funds from (0.5 percent) (this is the same sample of
the 5 schools students from the rows above).
Unfunded Bridge the Gap and Stay in School Fund Testing
To also determine whether FACTS Management followed Oklahoma’s award process for
Bridge the Gap and Stay in School Fund initiatives, we selected a nonstatistical sample of
10 applicants that were not awarded either a Bridge the Gap grant or a Stay in School
Fund grant or applied for both and were awarded only one of the grants.63 We divided
the universe of 4,091 unfunded applicants into two strata. Strata I included
1,296 applicants that applied for one or both grants on or before August 16, 2020. We
randomly selected four students from this stratum to test. Strata II included
63
Some of the applicants in our sample applied for both initiatives.
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2,795 applicants that applied for one or both grants after August 16, 2020. We randomly
selected six students from this stratum to test.
For each applicant in both samples, we verified that the applicant submitted an
application and required supporting documents. We recalculated their Federal poverty
level percentage and determined whether the applicants met the required income
threshold at the time of their application. We also reviewed the reason(s) the applicant
did not qualify for a Bridge the Gap or Stay in School Fund grant and determined
whether Oklahoma’s decision followed Oklahoma’s awarding process.
To test the reliability of the data, we used the random sample of 10 applicants and
traced the income data to source documents and recalculated their Federal poverty
level percentage using the income data.
Table 6 shows the universe, sample sizes, and sampling methodologies related to our
testing of unfunded applicants for the Bridge the Gap and Stay in School Fund initiatives.
Table 6. Universes and Samples for Bridge the Gap and Stay in School Fund Initiatives
Unfunded Award Testing
Testing Purpose Universe Sample Size Methodology
10 unfunded Randomly selected applicants
Award Process 4,091 unfunded
applicants from the 2 strata described in
Step 1 applicants
(0.2 percent) the 2 rows below.
Award Process Strata I: 4 Randomly selected
Strata I: 1,296
Step 2 (0.3 percent) 4 applicants.
Award Process Strata II: 6 Randomly selected
Strata II: 2,795
Step 3 (0.2 percent) 6 applicants.
10 unfunded The same sample of applicants
4,091 unfunded
Data Reliability applicants described in rows 2 and
applicants
(0.2 percent) 3 above.
Use of Computer-Processed Data
We relied, in part, on computer-processed data contained in ClassWallet’s financial
management system and FACTS Management’s applications management system. We
used the expenditure data from ClassWallet’s financial management system to
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determine whether a sample of Bridge the Gap and Stay in School Fund initiative
expenditures were used for allowable purposes. To test the reliability of the expenditure
data in ClassWallet’s financial management system, we traced the data from our
unfunded and funded Bridge the Gap initiative and funded Stay in School Fund initiative
samples to supporting documentation, such as invoices and third-party electronic
transactions. To test the reliability of FACTS Management’s applications management
system, we used the data from our unfunded and funded Bridge the Gap initiative and
funded Stay in School Fund initiative samples and compared the data to supporting
documentation, such as income tax returns and other income documentation uploaded
by families to the FACTS Management application system. We also recalculated the
Federal poverty levels for the applicants in these samples. Based on the work we
performed, we determined that the data was sufficiently reliable for us to use in
meeting the audit objectives.
We also relied on computer-processed data obtained from the Department’s G5 system.
We used the G5 grants management system to identify the amount of GEER grant funds
Oklahoma drew down and returned as of August 6, 2021. The G5 grants management
system is the official system of record for the Department’s grants data. As a result, we
considered it to be the best available data for its intended purpose.
Compliance with Standards
We conducted this performance audit in accordance with generally accepted
government auditing standards. Those standards require that we plan and perform the
audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objective. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based on our
audit objective.
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Appendix B. Unallowable Bridge the Gap
Purchases by Keyword
Total Cost of
Number of
Keywords Keyword Examples of Products Purchased
Expenditures
Expenditures
Air
$2,818 8 Window air conditioner
conditioners
Arcade $3,883 42 Gaming table and arcade machine
Christmas
$978 3 Christmas tree
Tree
Anodized 10-piece cookware set with
Cookware $6,952 131 tempered glass covers, and stainless-steel
commercial cookware set
Dressers $13,227 46 Cherry 6-drawer dresser
Dryers $10,622 46 Electric dryer
Fireplaces $5,452 13 Media entertainment fireplace credenza
Futons $4,979 18 Storage futon and faux leather futon
Garmin
$9,409 34 Portable GPS navigator
Products
Gift Cards or
$1,270 17 Holiday gift basket and $100 gift certificate
Gift Baskets
Stainless steel patio heater and radiator
Heaters $20,393 144
heater
Loveseats $1,905 5 Fabric loveseat and vinyl loveseat
Mattresses $243 3 King mattress topper and air mattress
Phones or
Phone $15,854 174 Smartphone and gaming controller
accessories
Home theater projector and wall projector
Projectors $13,002 89
screen
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Total Cost of
Number of
Keywords Keyword Examples of Products Purchased
Expenditures
Expenditures
9.2 Cu. Ft. refrigerator with freezer and
Refrigerators $13,938 71
refrigerator water bottle holder
Ring
$23,950 179 Video doorbell and quick-release battery
Doorbells
Deep-seating sofa and glass rectangle sofa
Sofas $5,227 14
table
Stoves $373 4 Electric stove and sugar-free chocolates
TV $228,517 817 HDTV antenna and TV stick
Gas pressure washer, top load washer, and
Washers $14,920 87
dishwasher pods
Watches $146,663 385 Smart watches and wristwatches
Xbox $2,731 27 Gaming systems and components
Megapixel digital camera, portable media
Multiple player PA system, digital signage, gas grill, 8-
$105,414 827
Keywords64 channel security system, twin bed, mower,
and party speaker,
Total $652,720 3,184 -
64 Multiple keywords include the following: bed, bike, business, gas, mower, security devices, signage,
sink, trailer, bicycle, Bissell, blender, Bluetooth, bookcase, camera, chair, circuit, digitizer, doorbell,
embroidery, fitness, GPS, La-Z-Boy, media player, oscillating, Roomba, sectional, signal booster kit, table,
tool, trash can, treadmill, and video.
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Appendix C. Acronyms and Abbreviations
Bridge the Gap Bridge the Gap Digital Wallet
CARES Act Coronavirus Aid, Relief, and Economic Security Act
C.F.R. Code of Federal Regulations
CIO Chief Information Officer
Department U.S. Department of Education
Director of State Director of Statewide Operations for the Office of the State
Operations Chief Operation Officer
ESSER Elementary and Secondary School Emergency Relief
GEER grant Governor’s Emergency Education Relief Fund
IHE Institution of Higher Education
ISD Information Services Division
IT information technology
LEA Local Education Agency
OEQA Office of Educational Quality and Accountability
Oklahoma State of Oklahoma
OMES Office of Management and Enterprise Services
O.S. Oklahoma Statute
OSDE Oklahoma State Department of Education
SEA State Educational Agency
SVCSB Statewide Virtual Charter School Board
Tri-County Tri-County Technical College
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Appendix D. Oklahoma’s Comments
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