Report 2017-104 Recommendation 31 Responses

Report 2017-104: Montebello Unified School District: County Superintendent Intervention Is Necessary to Address Its Weak Financial Management and Governance (Release Date: November 2017)

Recommendation #31 To: Los Angeles Regional Adult Education Consortium

To ensure that state adult education funds are used in the most efficient and effective manner, the consortium should, within one year, complete an assessment of Montebello's ability to meet the requirements of its adult education plan to determine whether its use of state funds has been effective. If Montebello is found to be consistently ineffective, the consortium should immediately recalculate the adult program's fund allocation for the future.

Annual Follow-Up Agency Response From October 2022

Montebello USD Adult Education has reported to the consortium swift actions to address the Adult Education Recommendations noted on the November 2017 MUSD audit report. Additionally, in summary, Montebello USD returned to the consortium one-time funding totaling $5,030,845. Also, Montebello USD's Consortium allocation (ongoing funding) was reduced from $15,588,254 Million to $12,948,225 Million. Last, currently, with the implementation of the new LARAEC funding formula, MUSD's funding allocation out of CAEP is $10,661,395. A) On November 15, 2019, the Consortium leadership resolved to hold a special meeting to finalize the funding formula including: 1. The LARAEC Office reported on the Eide Bailly audit of student counts, a final report of which was introduced. 2. Vasquez and Company, LLP provided a progress report on the development of the LARAEC oversight policies and procedure. 3. The LARAEC proposed effectiveness report was presented. 4. A special Board Workshop was scheduled to finalize the development of the LARAEC funding formula 5. Adopted Bylaws to operationalize and provide uniformity to the governance of the consortium. Exhibits 1-3A. B) On December 20, 2019, the Consortium leadership held a special meeting to finalize the funding formula and address any pending items to fully implement the recommendations of the State Auditor's Office. The meeting was facilitated by members of the CAEP Technical Assistance Office. The following items were addressed: A set of objectives were developed in preparation to the workshop. All objectives were met and a new funding formula was developed. The funding formula was to be introduced as an action item for the Consortium to officially adopt on the board meeting scheduled for January 17, 2020. Exhibits 4&5. C) On January 17, 2020, the Consortium leadership approved and adopted the LARAEC funding formula effective on July 1st of 2021. Exhibits 6&7.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

We are rating this recommendation as fully implemented because LARAEC adjusted the Montebello Adult Education program's funding in 2018. LARAEC also implemented a new funding formula in January 2020 and developed policies and procedures for reviewing adult education program expenditures, performance, and accounting practices on an ongoing basis.

Annual Follow-Up Agency Response From October 2019

The Consortium conducted a Special Meeting on October 23, 2019 to address the pending items from recommendations 31 and 32. The board consensus was to conduct meetings or workshops, or other activities between December 2019 and March 2020 leading to the development of a funding formula. It is the Board consensus to schedule a workshop as soon as practicable within the aforementioned interval. It is LARAEC's Board intent to conclude all necessary steps as outlined on the submitted timeline to comply with recommendations 31 and 32 by June 30, 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

Montebello USD Adult Education has reported to the consortium swift actions to address the elements noted on the recommendation. In summary, Montebello USD returned to the consortium one time funding $totaling $5,030,845. Additionally, Montebello USD's Consortium allocation (ongoing funding) was reduced from $15,588,254 Million to $12,948,225 Million.

Additional steps implemented since the 6-Month report as are follows:

The Consortium has scheduled a Special Meeting (workshop), on December 7, 2018 to reevaluate its funding formula. Staff will provide a number of possible scenarios and the Executive Team will, if appropriate or needed, define/adopt a new funding formula that is fully transparent, fair, takes into account the total number of students in each district, and includes the needs of the students in each district.

Exhibit 1: LARAEC Workshop Agenda, September 21, 2018 and Minutes.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

This recommendation is partially implemented due to the actions LARAEC has taken to adjust the Montebello Adult Education program's funding. Full implementation is pending LARAEC finalizing its new funding formula as that formula will determine the Montebello Adult Education programs ongoing funding.

6-Month Agency Response

Additional steps implemented since the 60-day report as follows:

A. Per the request of the Executive Board, MUSD Adult Education developed a plan to reduce its allocation based on current and future program needs. The plan was presented to the LARAEC Executive Board and approved for implementation as of January 19, 2018. Exhibit 1A, MUSD Adult Education Plan to reduce its allocation. The plan was effective the current School Year and subsequent years thereafter. The plan included returning to the Consortium one- time funding (unused carryover $4,665,368 and unused Data and Accountability Funding $365,477, totaling $5,030,845). Exhibit 1B, LARAEC Open Meeting, January 19, 2018 Agenda and Minutes

B. The Consortium drafted and approved two MOUs to document the transactions that would result in the implementation of the approved MUSD Adult Education plan; one for one­time funding and the second for ongoing funding. Additionally, ongoing funding in the amount of $1,269,155 will be redistributed by July 31, 2018. Exhibit 1C, One Time Funding Redistribution MOU and Exhibit 1D, Ongoing Funding Redistribution

C. Lastly, the consortium also changed its Consortium Fiscal Administration Declaration, the document that informs the State of how the Consortium has elected to distribute its funds to the Member-Districts of the Consortium. Additionally, funding in the amount of $1,880,843 will be redistributed via SY 2018-19 CFAD, to be effective July 1, 2018. Exhibit 1E, Consortium Fiscal Administration Declaration

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

MUSD Adult Education has reported to the consortium swift actions to address the audit report recommendations:

1. Has employed new leadership that is focused on improving and expanding adult education in MUSD according to LARAEC's Regional Comprehensive Plan. Exhibit 1

2. Demonstrated transparency by implementing credible, verifiable, and data-supported adult education enrollment and budget information. This includes:

a. Implementing a Student Information System (September 2017) and procedures to ensure the reliable collection of students data - Exhibit 2a

b. Implementing Student to Teacher ratios per MUSD Board Policy adopted on November 2, 2017. The ratios are intended to address efficiency by reducing/eliminating classes with low attendance. Exhibit 2b

c. Planning new high demand CTE programs with articulation agreements with Los Angeles Trade Technical College (LATTC) for the spring, 2018 supporting the strategies listed on LARAEC's Regional Comprehensive Plan. Exhibit 2c

3. Redoubled its efforts to address the unmet needs of community members by growing a neglected adult education student base. Marketing efforts designed to inform prospective students of the programs and services offered by the school (81% of MUSD's 26,590 students, 19,873 are on the free or reduced lunch program: Synergy System, Report PGM402) have been employed. Current unduplicated enrollment is 4,561 with an expected 6,000 unduplicated students by the end of the academic year. Exhibit 3a and 3b

4. MUSD Adult Education is currently projecting the return of funds to LARAEC based on identified consortium students' needs of all member-districts. These funds will be reallocated to other programs. Exhibit 4

5. LARAEC has scheduled a Special Meeting to take action on the following Agenda Items:

a. Determine the specific amount that Montebello Adult Education is to return to LARAEC Exhibit 5a

b. Reallocate returned funds to the other LAREAC members Exhibit 5b

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2017-104

Agency responses received are posted verbatim.