REPORT DIGEST

Financial and
Management Audit

TEACHERS ACADEMY FOR MATHEMATICS AND SCIENCE

Released: April 2003

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State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

To obtain a copy of the report contact:
Office of the Auditor General
Attn: Records Manager
Iles Park Plaza
740 East Ash Street
Springfield, IL 62703

(217) 782-6046 or
TDD: (217) 524-4646
This report is also available on the worldwide web at:
http://www.state.il.us/auditor

SYNOPSIS

The Teachers Academy for Mathematics and Science (Academy) provides professional development services for teachers in academically under-performing schools, which often serve students coming from poor families.
The State of Illinois has become the major funding source for the Academy. During FY01, the Academy received 94 percent of its total revenue from the State. The General Assembly has appropriated over $32.5 million to the Illinois State Board of Education (ISBE) for the Academy since FY95.

During the audit we found that:

  • No formal grant agreement exists between ISBE and the Academy for funding received from ISBE.
  • During FY01, in addition to the $5.5 million received as a named entity in ISBE’s appropriation, the Academy received $2.28 million in State funds from other ISBE grant programs, which resulted in ISBE foregoing other planned projects around the State.
  • While there have been increases in test scores for students taught by Academy-trained teachers, scores also increased for the Chicago Public Schools overall, as well as schools Statewide during the same period. ISBE has performed no analysis to determine whether or not the gains have been commensurate for the funding level received.
  • ISBE has established no guidelines to govern the Academy’s use of State funds. Additionally, there is an overreliance at ISBE on self-reporting of expenditures by the Academy. These conditions resulted in our questioning costs due to:
    • Lack of documentation to support the expenditure;
    • Overpayment for purchased meals; and
    • Non-program related expenditures.
  • The Academy distributed over $222,000 in excess materials to a school district that already received their required teacher materials for being in the program.
  • The Academy was placing interest earned on State funds into an unrestricted account, which is used to finance non-State expenditures.
  • ISBE allowed the Academy to carry over State funds from one fiscal year to the next, although ISBE’s documented policy is that carryover of funds for State-funded programs is not allowed.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The State of Illinois has become the major funding source for the Academy.

 

 

During FY01, the Academy received 94 percent of its total revenue from ISBE.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The funding process for the Academy is an informal process.

 

 

 

No formal contract or grant agreement exists for the funding the Academy receives from the ISBE.

 

 

 

 

 

 

ISBE allowed the Academy to carry over funds from one fiscal year to the next, in violation of ISBE policy. The Academy used $589,000 of FY99 funds and $644,000 in FY00 to pay for subsequent year's activities.

 

 

 

 

The Academy received $2.28 million in additional grant funding from ISBE during FY01. ISBE was forced to forego other planned projects around the State.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ISBE has not set formal outcome goals for the Academy for funding received from the State.

 

 

 

 

 

ISBE does not perform on-site monitoring of the Academy.

 

The Academy did not perform all the required in-class visits to teachers enrolled in the program. Fifty-seven percent of the teachers in our sample did not receive the required 15 visits.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ISBE does not verify the information supplied by the Academy on activities conducted by the Academy or student test score evaluations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Students within the same schools taught by Academy-trained teachers performed better on ISAT tests than students taught by non-Academy trained teachers. However, other factors, such as differences in teacher ability or differences in student aptitude can also influence test score differences.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There is a lack of direction from ISBE on acceptable uses of State funds.

 

 

 

 

The Academy lacked sufficient supporting receipts for $25,857 in expenditures charged to State funds.

The Academy lacked an efficient method for estimating attendance at training sessions which resulted in unnecessary purchases of meals.

The Academy expended State funds on apparent non-program related expenses including $28,588 for physical fitness and stereo equipment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Academy distributed excess materials to a school district instead of using them in the next year or seeking refunds or credits for the materials purchased with State funds.

 

 

 

 

 

 

 

 

The Academy deposits interest earned on State funds into an unrestricted fund, in violation of ISBE policy.

 

Academy calculations show $616,121 earned in interest on State funds since 1992.

 

 

 

 

 

 

 

 

REPORT CONCLUSIONS

The State of Illinois has become the major funding source for the Teachers Academy for Mathematics and Science (Academy). During FY01, the Academy received 94 percent of its total revenue from State grants. The Academy’s mission is to provide professional development services for teachers in the areas of mathematics and science. The Academy focuses its efforts on academically under-performing schools, which often serve students coming from poor families.

The Academy received a $5.5 million grant during FY01 specifically appropriated to it as part of the Illinois State Board of Education (ISBE) budget. While we found that the Academy does not receive entitlement funds – funds guaranteed to an entity based on a formula – the Academy has received funds from the State as a named entity in ISBE’s appropriation every year since FY95. Increases in the Academy’s specific appropriation amount over the years were generally tied to increases in Academy services conducted statewide. From FY95 through FY02, $32,531,900 was appropriated to ISBE for the Academy.

Professional development expansion in East St. Louis and Joliet resulted in the Academy receiving an additional $2.28 million from ISBE during FY01. These funds were provided from other grant programs at ISBE ($1.9 million) that have historically gone to various entities such as schools and school districts, and a legislative transfer ($380,000) of General State Aid. A "misunderstanding" between the Academy and ISBE resulted in the State Superintendent having to find additional funds for the Joliet project that caused ISBE to forego other planned projects around the State.

No formal contract or grant agreement exists between ISBE and the Academy for the funding received through appropriations to ISBE by the General Assembly. The Academy does submit proposals (after the appropriation amount has been passed by the General Assembly) and year-end cost reports. ISBE views these documents, in total, as an agreement. However, as these proposals are developed by the Academy, they lack any mention of issues such as: outcome goals to achieve for the funding level; what are appropriate and inappropriate uses of the funds; or any of the certifications and assurances other ISBE grants contain.

ISBE allowed the Academy to carry over State funds from one fiscal year to the next, although ISBE’s documented policy is that carryover of funds for State-funded programs is not allowed. This resulted in the Academy expending $589,000 for FY00 expenses from its FY99 ISBE funding. Likewise, during the Academy’s FY01, they expended $644,000 in previous year (FY00) State funds. According to the Executive Director of the Academy, this practice was stopped pursuant to an oral directive from an ISBE official after this audit began. That directive was reversed ten days later by ISBE, and the Academy was allowed to carry over FY01 funds through the end of June 2002.

The proposals developed by the Academy for FY01 did not delineate outcome goals that needed to be achieved to receive funding from the State. While the Academy has set internal goals as part of its strategic planning, ISBE does not provide the Academy with specific goals or performance measures for the funding received from ISBE. Without setting outcome goals for the Academy and monitoring the completion of these documented goals, ISBE cannot ensure that State resources are appropriately utilized. Additionally, the proposals are vague with regards to some of the activities and trips that will be sponsored by the Academy. We also found that not all teachers received the required number of in-class visitations as delineated in the Academy’s proposals and reported at the end of the year in the Academy’s evaluation report.

There is an overreliance at ISBE on self-reporting by the Academy. The Academy submits program information to ISBE reporting on the number of teachers served, activities conducted by the Academy throughout the year, student test score evaluations, as well as financial information on expenditures. ISBE does not verify this information submitted by the Academy.

The Academy has reported to ISBE that its program has raised math and science scores in the six regions in Illinois where the program has been implemented. While our analysis showed that test scores for Chicago Academy schools increased, scores for the Chicago Public Schools overall, as well as schools Statewide, also increased during the same period.

While there have been increases in test scores for students taught by Academy-trained teachers, there has been no analysis performed by ISBE to determine whether or not the gains have been commensurate for the funding level received. We found that students within the same schools taught by Academy-trained teachers performed better on ISAT tests than did the students taught by non-Academy trained teachers. This analysis, however, does not take into account any other factors that may cause differences in test scores, such as differences in teacher ability and skill or differences in student aptitude within the classrooms. Finally, we concluded that in all three Academy regions, participating teachers improved on the basic skills test after one or two years in the Academy program.

Guidelines on how organizations can spend State funds are an important management control to ensure that the funds are spent efficiently and for the purpose intended by the General Assembly. Such guidelines set parameters as to the specific type of allowable expenses, as well as any general restrictions on the use of State funds. We found that ISBE has established no guidelines to govern the Academy’s use of State funds. Additionally, there is an overreliance at ISBE on self-reporting of expenditures by the Academy. These conditions resulted in our finding that:

  • In 9 percent of the expenditures tested, the Academy had not maintained supporting receipts for credit card purchases charged to State funds that totaled $25,857. The undocumented expenditures were for purchases identified as, among others, travel, meals and lodging on the credit card statements.
  • In 7 percent of the expenditures tested, meals were charged to State funds without an indication of who benefited from the expenditure. Additionally, we found that the Academy needs a better method for confirming attendance by teachers and parents at professional development sessions, especially those held at remote locations. This resulted in inefficiencies in purchases of meals and refreshments that are also charged to State funds.
  • There were instances of expenditures charged to State funds that appeared to be outside the Academy’s role as providers of professional development. For instance, in September 2001 the Academy purchased $28,588 in physical fitness and stereo equipment to set up a work out gym for employees.

The Illinois Grant Funds Recovery Act (30 ILCS 705/10) requires that interest earned on grant funds become part of the grant principal and is to be treated accordingly unless the grant agreement provides otherwise. Additionally, ISBE grant policy indicates that all interest earned on grant funds during the grant period must be spent by the grantee during the grant period, but only for purposes authorized by the grant. The Academy proposal with ISBE has no mention of how interest is to be processed. While ISBE did inform the Academy that State funds should not be held by the Academy and earning interest, we found that the Academy does earn interest on State funds and places those earnings into an unrestricted fund. Unrestricted funds at the Academy are sometimes used for purposes other than those that might be allowable or chargeable to a State grant. Academy calculations show $616,121 of a total of $896,375 (69 percent) in interest earnings since 1992 are from State monies. In FY01, the Academy recognized $121,489 in interest from State monies, or 81 percent of total interest of $149,721 in FY01. Additionally, the Academy deposits activity fees from its clients into the unrestricted fund as opposed to using those funds to offset costs of the activities. Expenditures for these activities are generally paid with State funds.

The Academy had over $222,000 of excess materials for distribution to teachers at the end of FY01 that they gave to the school district in East St. Louis. These materials were in addition to the materials provided to East St. Louis teachers who were enrolled in the Academy’s professional development program. The Academy was unable to provide information on who received these materials that were purchased with State funds. Without documentation on who received the materials, we were unable to determine whether these State resources were provided to recipients that actually needed, or were trained in using, the materials. The Academy’s response to the audit contained certifications signed by East St. Louis principals to the receipt of the materials. These certifications were dated four days prior to our exit conference with the Academy.

The Academy has failed to perform formal performance appraisals of its staff in violation of its Employee Manual. Timely evaluations provide essential feedback to employees as well as providing a documented basis for salary adjustments, promotion, demotion, or layoff.

The Academy’s proposals to ISBE do not contain any requirements that address fixed assets purchased with State funds and disposition of those assets in the event of discontinuance in funding from the State. Failure to include this type of requirement by ISBE could result in assets purchased with taxpayer funds not being recoverable by the State if funding were terminated. (pages 1-3)

BACKGROUND

On May 25, 2001, the Illinois House of Representatives adopted Resolution Number 304 directing the Office of the Auditor General to conduct a financial and management audit of the Teachers Academy for Mathematics and Science (Academy). House Resolution Number 304 directed the Auditor General to determine:

  • Whether some grants for the Academy were made by the State Board of Education from programs designed only for individual schools and school districts;
  • Whether other grants for the Academy made by the State Board of Education were in excess of their entitlement;
  • Whether the Academy has met goals it set with the State Board of Education in return for substantial increases in State funding; and
  • Whether the substantial expenditure of State funds over the last 5 years on the Academy has resulted in improvements in math and science scores at participating schools. (page 4)

ACADEMY FUNDING IN THE STATE BOARD OF EDUCATION BUDGET

The Academy has received funds as a named entity in the State budget every year since FY95. The funds are appropriated to the Illinois State Board of Education (ISBE) for the Academy and are generally disbursed to the Academy in three installment payments. While these funds are appropriated for Academy use, they are not technically entitlement funds. Entitlement funds guarantee, based on the funds appropriated or received in a grant award, that eligible fund recipients or other entities will receive a specific amount of funds based on a formula.

Funding Levels

Since 1995, the State of Illinois has become the major funding source for the Academy. During FY01, the Academy received 94 percent of its total revenue from State grants. From FY95 through FY02, $32,531,900 was appropriated to ISBE for the Academy. This included a 19 percent increase from FY01 to FY02.

Digest Exhibit 1
ACADEMY SPECIFIC
STATE APPROPRIATIONS
FY95-FY02

Fiscal Year

Amount

2002

(1) $7,001,900

2001

(2) $5,880,000

2000

$5,500,000

1999

$5,500,000

1998

$5,500,000

1997

$1,050,000

1996

$1,050,000

1995

$1,050,000

Total:

$32,531,900

Notes:
(1) ISBE reduced the appropriation by $1.5 million in January 2002.
(2) includes a $380,000 supplemental appropriation as part of FY02 budget bill.
Source: State of Illinois Appropriations Report and ISBE website.

Funds are distributed to the Academy based on a grant, according to ISBE documentation. The base appropriation For Funding the Teachers Academy for Math and Science in Chicago for FY01 was $5.88 million ($380,000 of that amount was a supplemental appropriation for the Academy attached to the FY02 budget). Digest Exhibit 1 presents the appropriation history for the Academy in the ISBE budget.

As presented in Digest Exhibit 1, the funding level for the Academy has increased from $1.05 million to $5.5 million to $7.0 million. These increases coincided with the Academy’s expansion beyond Chicago.

We found that the funding process for the Academy is an informal process. Staff from ISBE reported that the Academy submits a request to ISBE, asking for a specific amount of money. ISBE officials stated they then adjust the number, usually downward, to meet the ISBE overall budget plan. After negotiations with the Academy, the budget staff and Superintendent then make decisions, with final approval by the Board. Further, ISBE officials stated that they view themselves as a flow through entity; there are no competitive proposals submitted by the Academy and the amounts are ultimately decided by the General Assembly. Finally, ISBE staff stated that no research has ever been conducted to determine the appropriate funding level for the Academy.

Academy officials report a different process that is supported by documented dates on proposals. The Academy Executive Director stated a proposal is not submitted usually until after the budgeted appropriation amount has been passed by the General Assembly. We found that the FY00 proposal submitted by the Academy, for the amount as named in the appropriation, was dated September 14, 1999. The FY01 proposal for the named amount in the appropriation was dated September 7, 2000.

Funding Proposals

No formal contract or grant agreement exists between ISBE and the Academy for the funding received through appropriations to ISBE by the General Assembly. The Academy does submit proposals after the appropriation has been passed by the General Assembly and approved by the Governor, and after the fact cost reports to ISBE for funds received as a named entity in the appropriation bills. ISBE views these documents, in total, as an agreement. However, these proposals, developed by the Academy, lack key components to help ensure accountable uses of these funds, such as: outcome goals to achieve for the funding level; what are appropriate and inappropriate uses of the funds; or any of the certifications and assurances other ISBE grants contain.

The proposals submitted by the Academy are not signed by ISBE, do not outline what constitutes permissible expenditure of funds, or contain the provision to return unused funds to the State. Academy officials reported that they have not received any direction from ISBE relative to what they can and cannot spend funds on. While the proposal spells out what activities and amount of teacher training and support is being proposed, there is no indication that ISBE approves this plan or monitors Academy activities to ensure that the work was completed and that the funds were spent based on the proposal.

Carryover Funds

ISBE allowed the Academy to carry over State funds from one fiscal year to the next, in violation of ISBE policy. This resulted in the Academy expending, from its FY99 ISBE funding, $589,000 during the Academy’s FY00. Likewise, during the Academy’s FY01, they expended $644,000 in previous year (FY00) State funds. According to the Executive Director of the Academy, this practice was stopped pursuant to an oral directive from an ISBE official after this audit began. That directive was reversed ten days later by ISBE, and the Academy was allowed to carry over FY01 funds through the end of June 2002.

From our review, it appears that the Academy used the carryover funds to pay for expenditures incurred in the subsequent year rather than to complete the activities in the previous fiscal year proposal. Additionally, by the time the Academy had asked to carry over funds, the State had appropriated more funding for the current school year – when the Academy was incurring these additional expenses.

We recommended that ISBE develop formal grant agreements with the Academy for the funding received as a named entity in the ISBE budget that includes appropriate and inappropriate uses of funds, program specifications, budget guidelines and terms for the grant. (pages 14-19)

ADDITIONAL STATE GRANTS TO THE ACADEMY

Professional development expansion in East St. Louis and Joliet necessitated the Academy receiving an additional $2.28 million from ISBE during FY01. Additional funding included a $1.5 million grant for the Academy’s efforts in East St. Louis and another $780,000 for work in Joliet. These funds were provided from other grant programs at ISBE ($1.9 million) and a legislative transfer ($380,000) of General State Aid. A "misunderstanding" between the Academy and ISBE resulted in the State Superintendent having to find additional funds for the Joliet project that forced ISBE to forego other planned projects around the State.

Fiscal Year 2001 was the first time since FY97 that the Academy had received funds from other ISBE grant programs – outside of the amount named in the ISBE budget. Digest Exhibit 2 identifies the four ISBE grant programs from which funds were used to provide this additional funding to the Academy during FY01.

 

Digest Exhibit 2
SUMMARY OF OTHER ISBE FUNDING PROVIDED TO THE ACADEMY
Fiscal Year 2001

Funding Received

ISBE Program

ACADEMY Funding as a %age of Total Appropriation

$1,550,000

For all costs associated with Professional Development Statewide

52 percent
($1,550,000 of $3,000,000)

$200,000

For Operational Costs and Grants for Family Literacy

20 percent
($200,000 of $1,000,000)

$100,000

For Operational Costs and Grants for Mathematics Statewide

10 percent
($100,000 of $1,000,000)

$50,000

For Grants Associated with Scientific Literacy Programs, Math and the Center for Scientific Literacy

.79 percent
($50,000 of $6,328,000)

$1,900,000

Total – Other Grant Funds  
Note: The Academy also received a $380,000 legislative transfer from General State Aid.
Source: OAG summary of Comptroller data and State appropriations book.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

An ISBE official explained that ISBE issues several different kinds of grants. Some are more competitive and require a request for proposal process with supporting documentation. We found that none of the funding mechanisms to the Academy were competitive in nature. Additionally, the official explained that often the original funding proposal is the only written document to support the agreement.

During our review of other recipients that received grant funds from the same ISBE programs as the Academy, we found that ISBE had formal agreements in place for only 48 percent (34 of 71) of the organizations. We recommended that ISBE enter into formal agreements with entities, including the Academy, which receive grant funding from ISBE and maintain documentation to show how funds were used. (pages 20-26)

ACADEMY GOALS

The proposals developed by the Academy for FY01 did not delineate outcome goals that needed to be achieved to receive funding from the State. While the Academy has set internal goals as part of its strategic planning, ISBE does not provide the Academy with specific goals or performance measures for the funding received from ISBE. Without setting goals for the Academy and monitoring the completion of these documented goals, ISBE cannot ensure that State resources are appropriately utilized.

We recommended that ISBE provide the Academy with documented outcome goals prior to the fiscal year in return for funding received from the State. Additionally, we recommended that ISBE monitor the Academy’s performance to ensure State resources are being used for the purposes intended. (pages 28-30)

ACADEMY PROFESSIONAL DEVELOPMENT ACTIVITIES

ISBE has not provided the Academy with guidance for spending State appropriated funds. Additionally, ISBE does not perform on-site monitoring at the Academy to verify the activities in the final evaluation report were actually performed. We reviewed documentation at the Academy to determine whether the proposed number of schools and individuals received the services outlined in Academy FY01 proposals. For a sample of teachers in the Academy’s program during FY01, we found that the proposed activities were generally provided during FY01 with the exception being the number of in-class visits to teachers.

An integral part of the Academy program involves implementation support for participating teachers via 15 in-class visits per year. The final evaluation reports submitted by the Academy to ISBE details that 15 visits were conducted for the teachers in the program. However, we found that the Academy failed to conduct the required 15 visits for 57 percent (43 of 75) of the teachers in our sample. Digest Exhibit 3 illustrates the in-class visit breakdown by region.

Digest Exhibit 3
NUMBER OF IN-CLASS VISITS BY REGION
Academic Year 2000-2001

Region

15+ Visits

10-14 Visits

1-9 Visits

0 Visits

Replacement Teachers

Chicago

0

3

3

6

13

Joliet

16

4

0

3

2

East St. Louis

16

2

0

3

4

Note: Academy proposals and final evaluation reports state that 15 visits are required. Replacement teachers are teachers from schools that have previously participated in the intensive Academy program who were not employed during the intensive training.
Source: OAG Summary of Academy Database.

 

Required Professional Development Training

The Academy’s Professional Development Program provides 120 hours of instruction over two years to teachers of participating schools. The Academy expects teachers to be present for at least 80 percent of the instructional sessions during a given year, and in the school application, the Academy requests the principal’s commitment to this standard. We sampled 25 teachers from each of the three regions that were enrolled in the Academy program in FY01 (Chicago, Joliet and East St. Louis) and reviewed session logs to test how many hours of Professional Development training they received. We found that 23 percent (17 of 75) did not maintain regular attendance as required by the Academy. (pages 30-34)

ACADEMY EVALUATION AND RESULTS

There is an overreliance at ISBE on self-reporting by the Academy. The Academy submits program information to ISBE reporting on the number of teachers served, activities conducted by the Academy throughout the year, student test score evaluations, as well as financial information on expenditures. ISBE does not verify this information submitted by the Academy.

Student Scores

The Academy has reported to ISBE that its program has raised math and science scores in the six regions in Illinois where the program has been implemented. The math and science scores at participating schools in the Intensive Program in Chicago increased from 1999 to 2001 for the tests we compared. Joliet and East St. Louis figures were not included in our analysis because they started the 1st year of the Academy’s Intensive Program during the 2000-2001 school year. While test scores for Chicago Academy schools increased, there were also increases for the Chicago Public Schools overall as well as schools Statewide.

Digest Exhibits 4, 5 and 6 present the results of our various analyses of student test scores by children in Academy schools in Chicago.

 

tamdig456.gif (20941 bytes)

 

Academy vs. Non-Academy Classrooms

We found that students within the same schools taught by Academy-trained teachers performed better on the Illinois Standards Achievement Tests (ISAT) than did the students taught by non-Academy trained teachers. This analysis, however, does not take into account any other factors that may cause differences in test scores, such as differences in teacher ability and skill or differences in student aptitude within the classrooms.

The percent of students meeting or exceeding State ISAT standards for 3rd grade math students taught by Academy-trained teachers was 34 percent, whereas the percent of students meeting or exceeding State ISAT standards in the same schools taught by non-Academy trained teachers was 19 percent. The percent of students meeting or exceeding State ISAT standards for 4th grade science students taught by Academy-trained teachers was 27 percent, whereas the percent of students meeting or exceeding State ISAT standards in the same schools taught by non-Academy trained teachers was 17 percent.

Teacher Basic Skills

We found that teacher test scores had increased on a basic skills test administered by the Academy at various times during the course of the Academy program. The Academy’s Professional Development program attempts to impact students through the training of teachers. One of the tools used to measure progress made by teachers is a basic skills test in mathematics and science. Teachers are tested three times throughout the Academy’s program: at the beginning and end of the 1st year and at the end of the 2nd year of the program.

As illustrated in Digest Exhibit 7, the 70 Chicago teachers who took all three tests scored, on average, 5 percent better after the 2nd year in the program than on the basic skills test administered prior to beginning the Academy program. Both Joliet and East St. Louis schools were in the 1st year of the Academy’s intensive program during the 2000-2001 school year. Therefore, our analysis included the pretest and 1st year post-test only.

 

tamdig7.gif (5667 bytes)

 

We recommended that ISBE should establish a system to monitor the performance of the Academy by developing and implementing procedures governing the review of Academy prepared documents. We recommended that the system should include reconciling proposed services to what is actually delivered. Additionally, we recommended that ISBE should verify the information submitted in the Academy’s evaluation reports and determine whether the increases in test scores are commensurate for the funding level received by the Academy. (pages 34-42)

EXPENDITURE TESTING

Guidelines on how organizations can spend State funds are an important management control to ensure that the funds are spent efficiently and for the purpose intended by the General Assembly. Such guidelines set parameters as to the specific type of allowable expenses, as well as any general restrictions on the use of State funds.

We found that proposals developed by the Academy do not contain any guidelines on how State funds can be expended. Additionally, there is lack of direction from ISBE on acceptable uses of State funds. An Academy official told us that ISBE had never provided the Academy guidance pertaining to how the Academy could expend ISBE funds. The Illinois Grant Funds Recovery Act (30 ILCS 705/4) requires that all grant agreements specify permissible expenditure of grant funds and the financial controls applicable to the grant.

We tested 100 transactions, selected from the Academy’s FY00 and FY01 general ledgers, to ascertain if the expenditures charged to State funds were program-related and if documentation maintained by the Academy adequately supported the expenditure. We found:

  • Undocumented Expenditures: In 9 percent of the cases tested we found that the Academy had not maintained supporting receipts for credit card purchases charged to State funds that totaled $25,857. The undocumented expenditures were for purchases identified as, among others, travel, meals and lodging on the credit card statements.
  • Food and Refreshments: In 7 percent of the cases tested we found instances where meals were charged to State funds and it was not possible to identify who received the meals purchased. Academy credit cards were used to charge $1,929 in meals for which there was no listing or indication as to who benefited from the meals.
  • Overpayment of Purchased Meals: We found that the Academy needs a better method for confirming attendance by teachers and parents at professional development sessions, especially those held at remote locations. A lack of attendance resulted in inefficiencies in purchases of meals and refreshments that are also charged to State funds. We identified five instances where the Academy could have saved from $279 to $1,439 for meals purchased but not needed due to a lack of attendance.
  • Non-Program Related Expenditures: The Academy’s main business function is to provide professional development training to teachers. During testing we found instances of expenditures that were charged to State funds but that appeared to be outside the Academy’s role as providers of professional development. These included:
    • At the end of September 2001 (the end of the Academy’s fiscal year), the Academy spent $28,588 for physical fitness and stereo equipment to set up an employee work-out gym. These expenditures were charged to State funds and, as of October 2002, no gym had been established.
    • In August 2000, the Academy spent $12,657 to finance food, lodging and rentals for a conference at an East Peoria Inn and Conference Center for which only three Academy staff attended.
    • Also in August 2000, the Academy spent $432 on a boat tour of Chicago. The Academy was unable to provide information on who attended this tour nor was a receipt maintained for the expenditure.
  • Other Non-Program Related Expenditures: Other expenditures that were charged to unrestricted funds included:
    • The Academy made a donation of $3,678 worth of computer equipment to the Governor’s Humanitarian Mission to Cuba during FY00. This equipment was expensed to unrestricted funds of the organization and not booked to State funds.
    • During FY00, the Academy provided a short-term loan of $25,767 to prepay expenses for the Humanitarian Mission to Cuba. Documentation shows that the Academy was reimbursed approximately one month later. This expenditure was also paid from unrestricted funds at the Academy. However, during FY00, the unrestricted fund had expenses that exceeded revenues by over $300,000.

We recommended the Academy take the necessary steps to ensure that expenditures charged to State funds: are adequately documented and supported by original receipts; have adequate support for who benefited from meals charged to agency credit cards; take advantage of sales tax benefits of being a not-for-profit; and are program related expenses that fall within the purposes for the funding provided by the General Assembly. We also recommended that ISBE develop administrative rules that identify what are allowable and unallowable uses of State funds provided to grantees, including the Academy. Further, we recommended that ISBE should follow up on questioned expenditures to see if there is any need to recover State funds. (pages 44-50)

DISTRIBUTION OF EXCESS TEACHER MATERIALS

The Academy had over $222,000 of excess materials for distribution to teachers at the end of FY01 that were provided to the East St. Louis school district in August and September 2002. These materials were in addition to materials provided to teachers who were enrolled in the Academy program in that district.

An Academy official explained that the $222,000 in excess Year 1 and Year 2 teacher materials were purchased over the years but had not been distributed. According to an Academy official, since the Academy was not being allowed to carry over funds after FY01, they felt the districts had a right to the materials purchased. So, since East St. Louis was the neediest of the school districts participating in the Academy program, the materials were shipped to that district. Good business practice would dictate that the Academy use these materials in the next year or return them to the vendors for credits or refunds – thus saving the State taxpayers that financed the original purchases.

We recommended that the Academy ensure that materials for teachers purchased with State funds are only distributed to those who are actually participants in the Academy’s professional development program. Further, the Academy should, after consultation with Illinois State Board of Education officials, explore other ways to dispose of excess material inventories such as using the materials in subsequent years or returning to vendors for credit. Additionally, we recommended the Academy follow up with East St. Louis district officials to ascertain to whom the materials were distributed to ensure that State resources were used for appropriate purposes. The Academy’s response to the audit contained certifications signed by East St. Louis principals to the receipt of the materials. These certifications were dated four days prior to our exit conference with the Academy. (pages 50-52)

ACADEMY UNRESTRICTED FUNDS

The Illinois Grant Funds Recovery Act (30 ILCS 705/10) requires that interest earned on grant funds become part of the grant principal and is to be treated accordingly unless the grant agreement provides otherwise. Additionally, ISBE grant policy indicates that all interest earned on grant funds during the grant period must be spent by the grantee during the grant period, but only for purposes authorized by the grant. We found that the Academy does earn interest on State funds and places those earnings into an unrestricted fund.

Academy calculations show $616,121 of a total of $896,375 (69 percent) in interest earnings since 1992 are from State monies. In FY01, the Academy recognized $121,489 in interest from State monies, or 81 percent of the total of $149,721 in FY01. The Academy recognizes this revenue as being able to be used on any expenditure. This interest, after then being combined with other sources of "unrestricted" funds, is used for such purposes as holiday parties, dining, and hotel expenses that are not specifically charged to other funding sources.

We recommended that the Academy should use revenue, such as interest income, generated from State funds for State program purposes. Additionally, the Academy should take steps to ensure that only true sources of unrestricted funds are deposited into this fund and that revenue collected for special projects should clearly be used to offset expenses of those activities before charging State funds for the expenses. We also recommended that ISBE should monitor the use of interest income on State funds to ensure that these funds are used for the same purpose as the principal of the grant. Additionally, ISBE should examine the Academy’s use of interest revenue and recover any funds that were used for non-grant purposes. (pages 52-55)

OTHER ISSUES

The Academy has failed to perform formal performance appraisals of its staff in violation of its Employee Manual. Timely evaluations provide essential feedback to employees as well as providing a documented basis for salary adjustments, promotion, demotion, or layoff. Ninety-five percent (19 of 20) personnel files tested did not contain evidence that a performance appraisal had been completed during 2000 or 2001.

Proposals between the Academy and ISBE do not contain any requirements that address fixed assets purchased with State funds and disposition of those assets in the event of discontinuance in funding from the State. Failure to include this type of requirement by ISBE could result in assets purchased with taxpayer funds not being recoverable by the State if funding were terminated.

We recommended that the Academy should ensure that annual performance appraisals of its employees are conducted to provide documentation of the individual’s performance, as required by the Academy’s Employee Manual. Further we recommended that ISBE should develop criteria, to be included in formal grant agreements with the Academy, that returns fixed assets purchased with State funds by the Academy to the State in the event ISBE discontinues funding of the Academy program. (pages 55-57)

AUDIT RECOMMENDATIONS

The Audit contains nine recommendations which are all detailed in this digest. The Teachers Academy for Mathematics and Science and the Illinois State Board of Education generally agreed with the recommendations. Appendix F to the audit report contains the agency responses.

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                                                  ______________________________
                                                  WILLIAM G. HOLLAND
                                                   Auditor General

WGH\MJM
April 2003