Audit shows North Carolina Department of Public Instruction mismanaged federal funds | North Carolina

(The Center Square) – The North Carolina Department of Instruction (NCDPI) did not fully comply with federal requirements for multiple programs, a recent state audit of the agency showed.

According to the state audit of federal programs for fiscal year 2020, the department did not properly communicate with pass-through organizations about federal awards. Funds also were misused and misappropriated, the audit found.

The NCDPI “did not adequately and timely notify” subrecipients of federal award information for four audited federal programs.

In a sample of 66 out of 267 subrecipients reviewed by the state auditor for one program, 22 (33%) were sent award information two to five months after their applications had been approved and they began spending the funds. Another 17 (26%) had approved applications but were not sent award information until the audit. The subrecipients received about $822 million from the programs in fiscal year 2020.

“As a result, there is an increased risk that federal funds were not used in accordance with federal requirements,” State Auditor Beth Wood wrote in the report.

NCDPI officials said they did not have procedures to ensure the federal requirement was followed. Wood instructed the NCDPI to make the procedure a priority. Officials said they created a grant award notification letter addressing the issue.

“These tasks are in the process of being formally operationalized and documented in internal procedures to ensure timely future compliance,” wrote NCDPI Superintendent Catherine Truitt, who was elected to fill the position in November.

The NCPI also used more than $1.8 million in federal funds intended for school improvement activities on other activities.

“As a result, the department could be required to pay $1.84 million back to the United States Department of Education,” the auditor wrote. “Furthermore, inadequate monitoring of award spending increases the risk that federal funds would not be used in accordance with federal requirements, which reduces the funding available for school improvement activities.”

The NCDPI charged $7.3 million to a grant program for children with disabilities while the funds were no longer available. The agency may also have to reimburse the federal government for the error, the auditor wrote. NCDPI also blamed the award errors on a lack of concrete policy.

“DPI worked diligently to implement these procedures in a timely manner following the notification of this issue in the previous fiscal year,” Truitt wrote. “Unfortunately, by the time the issue was identified, it had already been repeated in the subsequent award year (which was a previous fiscal year).”

Some of the compliance issues previously were found in the State’s Single Audit Report released April 6.