Annual Work Plan Fiscal Year 2016 - Los Angeles Unified ...boe.lausd.net/...15BFAOIGAnnualWorkPlanFY2016Rev1.pdf · Report Submitted on 06/01/15, Revision #1. ... Our Internal Audit

LOS ANGELES UNIFIED SCHOOL DISTRICT OFFICE OF THE INSPECTOR GENERAL

Annual Work Plan Fiscal Year 2016

Ken Bramlett Inspector General

Report Submitted on 06/01/15, Revision #1


FY 2016 OIG ANNUAL WORK PLAN PAGE 2

INTERNAL AUDIT UNIT

The Internal Audit Unit has primary responsibility for conducting performance audits of programs, processes, functions and systems District‐wide. Audits are done mainly to (i) evaluate the efficiency and effectiveness of District operations, (ii) determine if activities are being carried out in accordance with District policies, applicable laws and regulations, and (iii) assess whether desired outcomes are being achieved. Additionally, we support the Investigations Unit in responding to allegations of fraud, waste, and abuse from various sources such as the Board of Education, District management, and the public. Our Internal Audit Work Plan is intended to be dynamic and flexible, so that we are able to be responsive to emerging risks and changing priorities. Board of Education requests and senior management interests may require that we conduct reviews not listed in this Work Plan, or that audits listed in this Work Plan be deferred or not performed at all, based on new information received during the year. Beginning in FY 2016, a concerted effort will be made to report on significant changes to the Internal Audit Work Plan on a quarterly basis. The proposed projects for FY 2016 include some discretionary audits. Discretionary audits are those audits that are deemed important enough for inclusion in the Work Plan, but which may require additional resources that may or may not be available to the OIG during the fiscal year. Accordingly, we will decide which discretionary audits should be conducted based upon available resources, risk and potential effects on the District’s mission and goals. The OIG has engaged District management over the last few months to discuss their goals, priorities and related risks for FY 2016. We have used this information to prepare a robust work plan that attempts to address some of the District’s more significant and evolving priorities. Follow‐up Reviews In FY 2016, the OIG will restart its audit follow‐up program. Following‐up on previously performed audits and reviews is an essential activity that helps to ensure that District management is addressing issues and recommendations included in OIG audits and reviews. The follow‐up reviews will be conducted by internal audit staff under the direction of the Quality Control and Assurance Group. Following the sections describing the scheduled and discretionary audits to be done in FY 2016, the Follow‐Up Review section will also describe the follow‐up selection process, the proposed follow‐up review work and the follow‐up reviews to be done in FY 2016.



NON‐FACILITIES RELATED

Scheduled Audits 1. Restorative Justice

The Board of Education passed a motion in May 2013 entitled, “2013 School Discipline Policy and School Climate Bill of Rights,” which stated in part the following:

Restorative Justice: By 2020, as an alternative to traditional school discipline, all Schools shall develop and implement restorative justice defined as: Practices that resolve school disciplinary incidents by having personnel trained in restorative approaches and all parties involved come together, identify the harm that was caused, and determine who was responsible. The group, generally through a circle conferencing process, then develops a shared process for repairing harm and addressing root causes to prevent future harm.”

The District has outlined requirements for training over a five‐year period through FY 2019, as well as the management of the complaint process. Our analysis will provide conclusions based on a framework prepared by District Management for the Restorative Justice Pathway to Successful Schools initiative. In addition, we will identify any risks that may hinder the accomplishment of all goals related to restorative justice in District schools.

Basis: OIG risk assessment District Strategy Supported: Ensure a safe, caring, and nurturing environment for all youth District Goal Supported: 100 percent graduation; Proficiency for all; 100 percent attendance 2. Anti‐Bullying Programs This audit will identify through a benchmarking analysis the features of the most effective anti‐bullying programs among various school districts as well as the most effective bullying prevention and detection methods supported by empirical studies. This information will help provide criteria to evaluate the appropriateness, comprehensiveness, and the effectiveness of the District’s anti‐bullying programs to ensure the safety, well‐being and protection of all students at all grade levels in District Schools. Our audit will include an evaluation of methods to prevent and detect cyber bullying as well as on‐campus bullying. Basis: OIG risk assessment District Strategy Supported: Ensure a safe, caring, and nurturing environment for all youth District Goal Supported: 100 percent graduation; Proficiency for all; 100 percent attendance 3. Educational Options School This audit will assess whether the District is providing a success oriented learning environment that addresses the individual needs of at‐risk students and provides alternative pathways to



graduation for students whose needs cannot be met in a traditional school setting. The audit will also assess whether the students enrolled in the program complete the requirements for a high school diploma and are career and college ready. Basis: Management request; OIG risk assessment District Strategy Supported: Transform teaching and learning so that we prepare all youth to graduate college and workforce ready; Provide a portfolio of high quality schools for youth, families and communities District Goal Supported: Proficiency for all 4. Booster Club Oversight at Schools The Fiscal Crisis and Management Assistance Team (FCMAT), established in 1992 by the California Legislature, provides specific steps that school administrators can take to ensure that booster clubs are managed in a responsible manner. The focus of this audit will be to take inventory of all operating booster clubs in the District and, on a sample basis, assess whether booster clubs are operating in conformity with FCMAT guidelines related to (i) annual financial statement audits, (ii) separate tax identification number, (iii) maintaining liability insurance, and (iv) ensuring a budget plan exists for activities. In addition, the audit will verify whether all fundraising activities are conducted independent of the Student Body.

Basis: OIG risk assessment District Strategy Supported: Operate an effective, efficient, and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all; Parent and community engagement

5. Charter School Audits – Charter Compliance, Financial Operations, Governance This series of audits will assist the Charter Schools Division in its monitoring efforts over District charter schools. Specifically, our audits will determine whether selected charter schools are complying with the Charter School Act of 1992; adhering to the conditions, standards and procedures outlined in their Charter Agreement; and accurately recording and reporting apportionment data. The specific schools to be audited will be identified during the fiscal year. Basis: OIG risk assessment; Management request District Strategy Supported: Provide a portfolio of high quality schools for youth, families and communities District Goal Supported: Proficiency for all 6. Teacher Retention Rate This survey study will identify teacher retention rates among various school districts and examine what measures are adopted by the districts that enjoy high retention and low turnover rates among teachers. The survey study will also identify methods for improving teacher job



satisfaction and reducing turnover rates to help minimize the cost of hiring and training inexperienced teachers to replace teachers that leave. Basis: OIG risk assessment; Management request District Strategy Supported: Ensure that there is an effective employee at every level of the organization focused on improving student outcomes; Provide a portfolio of high quality schools for youth, families and communities District Goal Supported: Proficiency for all; 100 percent graduation 7. Special Education Compliance Support and Monitoring The goal of this audit is to verify whether the controls within the Special Education Division’s Compliance, Support and Monitoring department are adequate to ensure compliance with all Federal, State and District special education policies. Compliance is said to be accomplished through the development of internal self‐monitoring practices such as the District Validation Review, as well as providing timely and relevant training and support to all District stakeholders.

Basis: OIG risk assessment District Strategy Supported: Operate an effective, efficient and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all 8. Early Childhood Centers – Eligibility Compliance The objective of this audit is to determine if the controls over the Early Childhood Center admission processes are adequate and effective, and all applicable Federal, State and District policies and procedures are being followed at all centers. This audit should provide assurance whether (i) children are admitted based on the guidelines provided by the CDE, (ii) students are eligible for fee subsidy programs, and (iii) the Centers comply with all mandated reporting requirements.

Basis: OIG risk assessment District Strategy Supported: Operate an effective, efficient and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all 9. School Financial Operations This series of audits will verify that financial activities at selected school sites are properly managed and controlled in accordance with District policies and procedures. These audits are performed to assist the District in fulfilling its oversight responsibilities over school financial operations such as management of student body funds, imprest funds, and procurement card transactions. The specific schools will be identified during the fiscal year based on requests received from Principals.



Basis: OIG risk assessment; Management request District Strategy Supported: Provide a portfolio of high‐quality schools for youth, families and communities District Goal Supported: Proficiency for all 10. Compliance with Student Safety Test – DACE

This audit will focus on compliance with safety guidelines in Career and Technical Education classrooms and the training environment at Skills Centers and Occupational Centers. The Goal of the District is 100% compliance with safety tests for CTE programs in the following sectors: (i) Energy, Environment and Utilities; (ii) Manufacturing and product development; and (iii) Transportation. Basis: OIG risk assessment; Management request District Strategy Supported: Operate an effective, efficient, and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all 11. Student Safety on School Buses Using Technology This study will focus on the prospect of improving the safety of students on District buses through the use of cameras and other forms of technology. Basis: OIG risk assessment; Management request District Strategy Supported: Ensure a safe, caring, and nurturing environment for all youth District Goal Supported: Proficiency for all

Discretionary Audits 1. Insurance Risk Management The purpose of this review is to provide an independent assessment of the internal management policies, processes and procedures related to the District’s risk management practices as it relates to worker’s compensation and liability self‐insurance. The review will assess decision making practices for these areas as well as the quality and appropriateness of data relied upon to support management decisions. Basis: OIG risk assessment; Management request District Strategy Supported: Operate an effective, efficient and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all; School safety



2. Security Assessment Action Plan

The purpose of this review will be to perform a gap analysis of the Security Assessment Action Plan developed by the District in 2012. This gap analysis will identify and affirm the positive attributes of the plan, assess priorities as set forth in the plan, as well as identify what potential gaps exist in the plan that require plan modification. This review will also determine the actions taken since the plan was developed in 2012 and the reasons for not executing any needed actions. Basis: OIG risk assessment; Management request District Strategy Supported: Operate an effective, efficient and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all; School safety

3. SAP Controls and Transactions Audits In 2005, the District began replacing its legacy‐based budget, human resources, payroll, financial and procurement information systems with a Systems, Application and Products (SAP) Enterprise Resource Planning (ERP) platform. In 2007, after the payroll, human resources, and part of the financial systems had been SAP‐enabled, the ERP implementation was placed on hold. In January 2012, the District reinitiated its effort to complete the legacy replacement process for the remaining legacy systems that were still supporting procurement and part of the financial systems. In these audits, we will assess the use of SAP configurable controls and analyze transactions processed through SAP such as accounting entries, approvals, and payments to determine whether the system was configured with adequate controls to ensure data integrity. Basis: OIG risk assessment District Strategy Supported: Operate an effective, efficient, and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all 4. Charter School Close‐out Audits The purpose of these audits is to help verify whether the assets and liabilities reported for charter schools that have ceased operations are accurate, and without any material misstatement. These audits should assist the Charter Schools Division to properly assess any funds/assets due to the District and to identify any unreported liabilities that the schools may have incurred at an earlier date. Basis: OIG risk assessment; Management request District Strategy Supported: Operate an effective, efficient and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all



5. Pupil Records: Access and Confidentiality

Before the extensive use of computers, school district administrators were responsible for safeguarding paper records that were mainly kept in filing cabinets. Today, however, student information is organized and accessed in computers and networks, which is a cost‐effective way of coordinating services offered to students and measuring learning progress. In addition to ethical responsibilities, school administrators have a legal obligation to protect confidential information about students and their parents (CA Ed Code, FERPA). My Integrated Student Information System (MiSiS) is a suite of fully‐integrated tools designed to provide up‐to‐date information for any K‐12 student in the District. The types of data include enrollment, scheduling, attendance, grades, counseling, discipline and many others. The goal of this security audit is to review the current state of physical controls (access and environmental) as well as logical controls (user identification and authentication, restriction of access) supporting the MiSiS system application.

Basis: OIG risk assessment District Strategy Supported: Ensure a safe, caring, and nurturing environment for all youth District Goal Supported: 100 percent graduation; Proficiency for all; 100 percent attendance; School safety 6. Vocational Education

Several California high schools offer hands‐on training in order to develop employment ready skills and provide career exploration opportunities, while earning high school elective credits. Many students avail themselves to special benefits through these course offerings, by obtaining entry‐level job skills, preparing for a well‐paying career, and earning high school elective credits. In this project, benchmarking will be conducted among California school districts and out‐of‐state school districts. An analysis of the different vocational education programs for public high schools will be presented. Basis: OIG risk assessment District Strategy Supported: Transform teaching and learning so that we prepare all youth to graduate college and workforce ready District Goal Supported: 100 percent graduation; Proficiency for all 7. Friends of Safe Schools U.S.A. The Friends of Safe Schools United States of America (FOSSUSA) is a 501(c)(3) public charity that works in partnership with the Los Angeles School Police Department (LASPD) and the District to support school safety efforts and activities. The purpose of this audit is to conduct an assessment of the processes used by FOSSUSA in collaboration with LASPD personnel to perform fundraising activities, collect donations and disperse funds. Basis: OIG risk assessment District Strategy Supported: Operate an effective, efficient, and transparent organization in



order to assure the public trust; Ensure there is an effective employee at every level of the organization focused on improving student outcomes District Goal Supported: Parent and community engagement; School safety

FACILITIES RELATED

Scheduled Audits 1. Follow‐up on DSA Closeout Process According to the California Field Act, all construction projects are subject to DSA certification to ensure strucutral safety, fire and life safety, and accessibility. In 2012, the OIG completed an audit of the District’s DSA Closeout Certification Process and provided 33 recommendations to Management. In this engagement, we will assess Management’s actions to mitigate issues identified and lower the associated risks to a reasonable level, and determine whether an action plan is complete or still in process.

Basis: OIG risk assessment; Management request District Strategy Supported: Ensure a safe, caring, and nurturing environment for all youth District Goal Supported: School safety 2. Labor Compliance Program California Labor Code and Education Code statutes require labor compliance programs to monitor and enforce compliance with applicable prevailing wage requirements for any public works projects paid for with public funds, within certain statutes of limitation periods. In 1985, the District began administering a program for monitoring the prevailing wage rates paid to construction workers on public works projects throughout the District. This audit will focus on the District’s efficiency in performing labor compliance assessments within specific mandated timelines. Basis: OIG risk assessment; Management request District Strategy Supported: Operate an effective, efficient, and transparent organization in order to assure the public trust District Goal Supported: School safety; Parent and community engagement 3. Site Assigned Maintenance Work Program Maintenance workers perform a variety of tasks that are critical to the maintenance and repair of schools, offices, equipment, appliances, and grounds, as well as for moving and installing school and office equipment and furniture. This audit will examine whether maintenance workers are performing duties in accordance with their job classification. Basis: OIG risk assessment; Management request



District Strategy Supported: Operate an effective, efficient, and transparent organization in order to assure the public trust District Goal Supported: School safety; Proficiency for all 4. Facilities Services Division Imprest Fund An Imprest Fund permits an administrator to make direct purchases of items using a local site checking account. The Imprest Fund is another means of procuring materials when a vendor does not accept a purchase order or P‐Card; it does not represent additional funding to the site. This audit will determine whether controls are working as intended over the use and management of Imprest Funds within the Facilities Services Division.

Basis: OIG risk assessment District Strategy Supported: Operate an effective, efficient, and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all

FOLLOW‐UP REVIEWS Selection of Projects

Resource limitations do not allow for follow‐up reviews to be performed for every audit and special review done by the OIG. Therefore, in order to maximize the limited resources available for this work, the Quality Control and Assurance Group performed a risk assessment of the audits and special reviews done in the past several years to determine which should be selected for follow‐up review. The Quality Control and Assurance Group will also determine which recommendations included in the selected projects should be followed‐up on.

In order to select the specific project areas for follow‐up review, the Quality Control and Assurance Group considered the following:

The likelihood of various types of risks or exposures that the District could face if the issues and recommendations included in a prior audit or special review were not addressed by District management. The types of risks and exposures that could occur can take many forms. For example, there are risks and exposures related to operations, governance, organization, financial affairs, and strategy.

The impact that the District and the communities it serves could face if the issues and recommendations included in a prior audit or special review were not addressed by District management. For example, the potential loss of funds, interruption to business operations, safety threats to students or staff, interruption to teaching, harm to the environment, and damage to the District’s reputation.

Prior projects focused on safety, student performance, and/or information technology were also considered. Such projects were more likely to be selected than other projects that perhaps focused on less sensitive matters.



Proposed work for each Follow‐up Review For each selected audit or special review, the OIG will request that management provide a status report for all of the related recommendations that management agreed to implement. After reviewing the status report, the OIG will request supporting documentation to corroborate the status of certain recommendations that it deems critical / significant. Factors that will be considered to determine what recommendations are critical or significant include:

o Management’s description of actions taken o The original audit team’s assessment of which recommendations are considered critical

or high priority o The likelihood and impact of significant disruption if the recommendation is not

implemented o Complexity of implementing the recommendation o Effect on other important processes or departments o Board Member Interest o The implementation stage (partially implemented / fully implemented)

1. Charter School Use of Special Education Funds

The objectives of this audit were as follows:

To assess the reasonableness of the District’s process for allocating special education

funds.

To assess the adequacy of the District’s oversight over charter schools’ use of special

education funds.

To determine whether charter schools’ special education funds were used properly and

managed in accordance with applicable laws and regulations.

The audit found that although both the Division of Special Education and the Charter Schools Division provided some assistance to charter schools with regard to program compliance, there was a need for defining and establishing the responsibility for fiscal oversight and monitoring of special education expenditures. The audit also found that there were issues related to the allocation of special education funding and to the use of special education funds in some charter schools. 2. Audit of California High School Exit Examination (CAHSEE) – Program Review

The California High School Exit Examination (CAHSEE) is a state mandated testing program that requires all California public school students, except eligible students with disabilities, to satisfy the CAHSEE requirement in order to receive a high school diploma. This audit checked whether:



The District had sufficient controls in place over the custody, security and administration

of the CAHSEE test materials as well as the testing program.

There was adequate monitoring and intervention programs in place for students who do

not pass the CAHSEE test in the 10th grade so that they may be prepared for

subsequent testing opportunities offered in the 11th, 12th, and post 12th grades.

The audit found that although the District had well designed controls over the custody, security and administration of the CAHSEE test materials and the testing program, these controls were not consistently followed. In addition, monitoring of CAHSEE intervention programs by the Beyond the Bell Branch needed to be strengthened in order to ensure that all eligible students received the services to help them pass the CAHSEE. 3. Integrated Pest Management Program The objective of this audit was to determine whether the District’s Integrated Pest Management program was effective in helping to provide a healthy and safe learning and work environment for all students, teachers and staff, and to determine if controls were in place over the inventory process of all pest‐related supplies. The audit found that although the design of the Integrated Pest Management (IPM) program contributes to a safe learning environment, the District needed to improve training of the IPM participants, strengthen program oversight, and improve cooperation among all IPM stakeholders. The audit also found that there were significant control deficiencies and weaknesses over the recordkeeping and inventory process of the pesticides and pest management supplies. 4. School Athletics and Physical Education Programs

Athletic programs are extracurricular activities offered to students as part of their educational program, which helps students boost self‐confidence and self‐discipline. Title IV and California law require schools to offer male and female students equal opportunities to participate in school athletics. Similarly, all students must have equal access to all physical education courses and sections offered. The objectives of the audit were to determine whether (i) school athletic programs were adequately controlled, (ii) funds and donations received were adequately accounted for, (iii) equipment and supplies were properly safeguarded, (iv) adequate procedures for monitoring eligibility and safety were in place, and (v) the District’s physical education program was in compliance with District policy. The audit found that the District’s school athletic programs were adequately controlled and that the physical education program was mostly in compliance with District policy. However, the audit also found that internal controls over donations received, the safeguarding of equipment and supplies, and training to school administrators needed to be strengthened.



5. School Crisis Teams

The focus of this audit was to determine whether District schools were creating and maintaining School Crisis Teams in compliance with District policies and procedures and State and Federal laws and regulations. The audit found that even though schools were creating and maintaining School Crisis Teams, compliance with certain school crisis policies needed to be strengthened in order to maximize a healthy and safe learning environment. 6. Random Metal Detector Searches at School Sites School systems must deal with the risk of violence, including the use of weapons on or adjacent to school campuses. The primary objective of the audit was to verify whether schools were in compliance with District policies and procedures in performing random metal detector searches of students, and timely submission of required documentation. The audit found that the District had established policies and procedures in accordance with laws regarding student safety and violence. However, the audit also found that some of the school sites we visited were not in full compliance with the established guidelines and that random metal detector searches were not always conducted in a proper manner.



CONTRACT AUDIT UNIT

The Contract Audit Unit has principal responsibility for auditing bond funded contracts and some non‐bond funded contracts. The Contract Audit Work Plan for FY 2016 identifies projected audits for several divisions within the District. The Work Plan includes 50 projects with a total contract value of over $651 million. The OIG’s bond budget for FY 2016 is approximately $3.2 million, which consists of $3 million for internal staff costs, $200,000 for external staff costs and $20,000 for costs associated with equipment, travel and training. The cost for audits and salaries for this fiscal year will be covered by School Upgrade Program (SUP) bond funds. We conducted several interviews with District management as part of our risk assessment for this Work Plan. Based on those interviews, we identified several critical areas that may pose risks or opportunities to District operations and are aligned with the District’s goals and strategies. These areas are listed below.

CONTRACT AUDIT WORK PLAN PROJECTS 1. Construction Contracts The goal of examining the contracts in this area will be to ensure that the contractor completed the construction as required and that contingency and allowance disbursements are drawn down in accordance with the requirements of the contract. Basis: OIG risk assessment District Strategy Supported: Provide a portfolio of high quality schools for youth, families and communities; Ensure a safe, caring, and nurturing environment for all youth District Goal Supported: Proficiency for all 2. Professional Services and Supplies Contracts The District contracts with various vendors for goods and services other than construction services. These services include providing plumbing supplies, food processing, supplemental education services and transportation. The goal of examining these contracts is to ensure that the service providers are complying with the requirements of their individual agreements and that the District was provided the services it paid for. Basis: OIG risk assessment District Strategy Supported: Provide a portfolio of high quality schools for youth, families and communities; Operate an effective, efficient, and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all



3. Technical Evaluations We will perform technical evaluations of several completed projects to ensure that these projects complied with contract documents, specifications and State Code requirements. Basis: OIG risk assessment District Strategy Supported: Provide a portfolio of high quality schools for youth, families and communities District Goal Supported: School safety 4. Change Orders We will review construction change orders in excess of $500,000 to determine whether the costs billed on the change orders are reasonable and allowable under the terms of the contract. We will also determine whether the work detailed in the change orders is within the original scope of work. Basis: OIG risk assessment. District Strategy Supported: Provide a portfolio of high quality schools for youth, families and communities; Operate an effective, efficient, and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all; School safety 5. Pre‐Award Audits

We will determine the reasonableness of the rates proposed by contractors/vendors for District projects. The audited rates are used by District staff to negotiate competitive contracts for the District. Basis: OIG risk assessment District Strategy Supported: Provide a portfolio of high quality schools for youth, families and communities; Operate an effective, efficient, and transparent organization in order to assure the public trust District Goal Supported: Proficiency for all A complete listing of the 50 projects to be completed by the Contract Audit Unit is attached as Exhibit A to this document.



INVESTIGATIONS UNIT

For FY 2016, in addition to responding to allegations of District employee misconduct and policy violations, we also plan to proactively focus on certain strategic areas and activities that we believe will provide the District with added protection of public resources. One important initiative in FY 2016 will be restoring staff capacity and expertise in the Investigations Unit consistent with the workload demands. In recent years, budget cuts and attrition have deprived the Investigations Unit of appropriate staffing levels and training opportunities. The recent filling of the Deputy Inspector General, Investigations position as well as the Supervising Investigator position have given the Investigations Unit the full complement of leadership that it needs. However, resources are still lacking at the Investigator level to adequately and promptly respond to requests from the District. To this end, the Investigations Unit will seek to attain a full complement of experienced personnel that will continue to concentrate on those high‐risk areas that have the greatest potential for exposing and deterring fraud, waste, and abuse. The Work Plan identifies the major areas where we will concentrate our resources. 1. The [OIG] Fraud Hotline The Investigations Unit manages the District’s Fraud Hotline, which generates whistleblower complaints, allegations of misconduct, and District policy violations from a myriad of internal and external sources each year. Expanding and defining the operational value of the Fraud Hotline will continue to be an important task in the upcoming fiscal year. The expansion will include not only responding to allegations of fraud, waste and abuse, but also ensuring that matters referred to other departments within the District are adequately addressed and responded to promptly. This initiative includes increasing the visibility of the Fraud Hotline telephone numbers on the District’s Website and an outreach campaign to increase awareness of the Fraud Hotline among District personnel through Fraud Awareness and Ethics presentations. This campaign will also be implemented by promoting the OIG’s webpage and its online reporting system through Fraud and Ethics related communications to all District personnel, vendors, contractors, parents, and students. 2. Employee Integrity Employee integrity investigations will continue to be a focus area due to the increasing number of reports being received through the Fraud Hotline and to the office directly. These investigations focus on allegations related to conflicts of interest, misappropriation of funds, embezzlement, payroll fraud, falsification of documents, property and equipment misuse, theft of property, misuse of District‐issued computers and tele‐communication equipment, nepotism, forgery, misconduct, and ethics violations. Employees’ misuse of the District‐issued procurement credit card (P‐Card) continues to be an



area of concern for the District, and we will devote sufficient resources to investigate these matters. To enhance District‐wide awareness of employee integrity issues, we will conduct fraud awareness training at the Educational Service Center (ESC) level to better apprise District management and staff of these issues and how to prevent them. In addition, for those areas that require administrative review but that do no rise to the level of an OIG investigation, we will provide investigative assistance to ESC operations staff handling these matters. 3. Whistleblower Allegations Persons who report improper governmental activity involving the District are protected against retaliation, interference, intimidation, threats or similar acts. The OIG has the authority to investigate violations of the Whistleblower Protection Policy. The OIG will endeavor to thoroughly investigate any and all credible complaints of violations of the District’s Whistleblower Protection Policy. 4. School Construction and Modernization Program As the District’s multi‐billion dollar school construction and modernization program moves away from new construction and concentrates on modernization, allegations of conflicts of interest, impropriety, and employee and consultant malfeasance are likely to increase, requiring a concentrated effort to deter and detect corruption. The number of contractors that the Facilities Services Division (FSD) will manage will increase thereby requiring more diligence from District staff and the OIG. Additionally, the increased use of contracts awarded through the Job Order Contracting (JOC) process will require more District and OIG oversight to avoid the risks of improper conduct. In the upcoming year, we will endeavor to create more Facilities and Procurement fraud expertise in the OIG with training from experts in these areas. 5. Due Diligence and Background Investigations As the school construction and modernization program shifts, the OIG will continue to support FSD in its efforts to root out potential problems before entering into contracts. The FSD uses OIG due diligence reports in their selection of the most qualified firms to build and modernize schools. The District uses several hundred contractors in the construction program. The demand for this work will increase as the building program becomes more concentrated on modernization. The OIG will continue to support FSD through our public record search program, which provides key information to the District on vendors and contractors involved with the District’s school construction and modernization projects, its charter schools, and senior management candidates. We will assist the Personnel Commission in its role of managing the selection process for senior management by conducting background investigations through our public record searches. 6. Charter Schools California State law requires that the District maintain oversight of the charter schools it



authorizes. We will continue to conduct due diligence reviews on charter schools and their principal officers to assist the Charter Schools Division (CSD) in making fair and equitable recommendations to the Board of Education with respect to the approval and renewal of charter school petitions. The District now maintains oversight of over 250 charter schools. As a result, there is increased oversight risk with the growth in the number of charter schools. In the upcoming fiscal year, the OIG will continue to work collaboratively with CSD to share appropriate information that can strengthen the District’s oversight capabilities over charter schools. 7. Workers’ Compensation Fraud

As a self‐insured District, costs associated with fraudulent workers’ compensation claims impact the District’s budget directly. To offset this negative impact on the District, the OIG will coordinate its Anti‐fraud efforts with the Division of Risk Management and Insurance Services’ Integrated Disability Management and its third party administrators (Sedgwick Insurance and G4S Investigations) to uncover fraud and to deter employees from filing duplicitous claims.

OTHER OIG ACTIVITIES

Fraud Alerts Fraud Alerts are an important tool for deterring the continuation of fraudulent activities that have been identified by the OIG. Our goal is to issue at least two Fraud Alerts in the upcoming fiscal year as a means of informing District management of issues of concern and as a means of leveraging OIG findings of individual acts to a broader District audience.

Special Reviews As a supplement to the audit and investigative functions, the OIG also performs Special Reviews. There are two types of Special Reviews – one is a short‐term (usually 2‐3 months) management or program review that focuses on an issue or concern of the Board of Education, the Superintendent, or District management. These short‐term reviews examine programs from a broader, more issue‐oriented perspective than traditional audits or investigations. These reviews also combine some of the best features of several disciplines; including program evaluation, survey research, operational auditing, program monitoring, compliance reviews, legal analysis, investigations, and management analysis. Through these short‐term special reviews, we are able to provide timely, useful, reliable information and advice to District decision makers. The second type of Special Review is a preliminary analysis (usually less than 30 days) of a specific issue or concern to determine whether a more in‐depth, independent audit or investigation should be conducted.


Exhibit A


Item

No.

Contract No.

CONTRACTOR/PROJECT

NAME

DESCR

IPTION OF CO

NTR

ACTED SER

VICES

Contract

Amount

Type of Audit

User Dep

t.

11410077

SJ Amoroso Construction Co. Inc.

Emerson MS (17406)

$14,644,762

Incurred

Cost

FSD

21310110

Kemp Bros Construction Inc.

Solano

EL

$10,867,500

Incurred

Cost

FSD

31210033

Environm

ental Site Clean

‐Up

South Region HS #9

$9,649,500

Incurred

Cost

FSD

41510001

Beta Investments & Contracts Inc.

HVAC Upgrade

at Hoover EL

$2,385,000

Incurred

Cost

FSD

51410089

HA Lewis Inc.

A/C at Huntington park SH

$2,110,000

Incurred

Cost

FSD

61110077

Swinerton

(Carryover)

Jordan

SH (Design

Build Contract)

$67,500,000

Incurred

Cost

FSD

71210044

Turner Construction Com

pany (Carryover)

Garfield HS Replace M

ain Bldg/Auditorium (17406)

$41,500,000

Incurred

Cost

FSD

81110072

Suffolk Construction Co. Inc.

Ninth St EL

$39,470,112

Incurred

Cost

FSD

91210033

Innovative Construction

South Reg

HS #9

$9,649,500

Incurred

Cost

FSD

101030023

Enterprise Painting & Decorating

JOC Painting

$1,000,000

Incurred

Cost

FSD

111130034

D John Roser Inc.

JOC General Services

$1,000,000

Incurred

Cost

FSD

121330049

Enterprise Construction Inc.

General C

ontract Service (Districtwide)

$5,350,000

Incurred

Cost

FSD

131410121

Royal Construction & Builders Inc.

SLC Phase I (M

arshall HS)

$1,525,000

Incurred

Cost

FSD

141310103

Davis/Reed

Construction Inc.

Hollywood SH

$6,301,000

Incurred

Cost

FSD

$212,952,374

150650127

Atlantic Express

School bus transportation

Services

$12,290,455

Incurred

Cost

Transportation

Services

161590024

Cordoba

Corporation

Professional services

$5,000,000

Incurred

Cost

PSD

171590002

Lenovo Inc.

Com

puter Services

$22,000,000

Incurred

Cost

ITD

181480019

BVVC (Buena

Vista Construction Inc.)

Construction Services

$5,250,000

Incurred

Cost

FSD

191250105

Gale Supply Co.

Janitorial supplies

$9,707,718

Incurred

Cost

PSD

204400001794

Karish Industries

Data network Cables & related

accessories

$1,250,000

Incurred

Cost

ITD

214400003487

AssetW

orks, LLC

Sole‐source contract for proprietary software, m

aintenance and

professional services

to upgrade the Transportation

Services Division's legacy Maintenance Co ntrol and

Managem

ent System

(MCMS) to FleetFocus M

5.

$1,354,137

Incurred

Cost

ITD

224400002963

Reach Associates, LLC

Single‐source contract to provide professional developm

ent for up

to 60

participants

including teachers, coaches, school leaders, and administrators to include

in‐person

and virtual trainings on the Literacy Design

Collaborative Framework as a strategy

for implem

enting

the

Co m

mon

Core State Standards.

$60,000

Incurred

Cost

Office of

Curriculum,

Instruction and

School Support

231300010

P&R Paper Supplies

Categorical partnering on

miscellaneous foods

$75,000,000

Incurred

Cost

Food

Service

244400003081

Follett Software Com

pany

Single‐source contract for system support of Destiny Asset M

anager, Destiny Library

Manager and

Textbook Manager modules.

$3,456,668

Incurred

Cost

Office of Chief

Intensive

Support and

Innovation

25440002851

Leem

ak USA, LLC dba Maklee Engineering

Single‐source contract for software technical support, high

performance database

tuning and

optimization services on

the

District’s Oracle and M

icrosoft SQL Server

databases. These services are critical to ensure that District system

s, such as

Welligent and MiSIS, operate at optimal efficiency.

$230,500

Incurred

Cost

ITD

261150100

Arrow

Restaurant

Food

se rvices equipm

ent

$5,238,000

Incurred

Cost

FSD

271050082

TMP Services

C‐77 Building ram

ps, landings, platforms

$12,560,375

Incurred

Cost

FSD

28931090

Williams Scotsm

an

Rental/lease of portable buildings.

$6,118,039

Incurred

Cost

FSD

291100381

A/P Recovery, Inc.

Expense recovery service

$20,600,000

Incurred

Cost

FSD

301590058

Gorian and Associates, Inc.

Geotechnical Engineering

Support Services

$4,500,000

Incurred

Cost

OEH

S

311200202

Welligent Inc.

IT Technical Services

$3,000,000

Incurred

Cost

ITD

321100122

Jennie‐O

Turkey Store (Carryover)

Categorical partnering on

turkey

$52,150,000

Incurred

Cost

Food

Services

CONTR

ACT AUDIT PLA

N FOR FY 2015 ‐ 2016

CONSTRUCTION CONTR

ACTS

TOTA

L FO

R CONSTRUCTION CONTR

ACTS:

PROFESSIONAL SERVICES AND SUPPLIES

CONTR

ACTS


Exhibit A


Item No.

Contract No.

CONTRACTOR/PROJECT

NAME

DESCRIPTION OF CO

NTRACTED

SERVICES

Contract

Amount

Type of Audit

User Dept.

331190092

Jones Day

Legal Services

$7,800,000

Incurred

Cost

OGC

341250101

Icolor Printing

Printing Services

$15,000,000

Incurred

Cost

PSD

351300221

Apollo

Staff Augm

entation

$3,799,704

Incurred

Cost

PSD

360750094

Avaya, Inc. (Carryover)

PBX equipment, installation and

other services.

$35,000,000

Incurred

Cost

ITD

371200187

Toshiba Business Solutions (Carryover)

Provide multi‐functional devices and

duplicators to all schools and offices

$60,000,000

Incurred

Cost

PSD

381050146

Becnel Uniforms

Bus/Truck Dr iver Uniform

s$1,166,997

Incurred

Cost

FSD

391150092

Mike Brown

Bleachers Rental

$1,787,937

Incurred

Cost

PSD

364,320,530

$

40N/A

Single/Sole Source Contracting

We will conduct a review

of the District's Com

pliance with Single/Sole Source

Contracting Procedures.

N/A

Special Review

41N/A

Pre‐Procurement

Review of RFP development to ensure that selection of minimum

requirements,

specifications and

scoring

rubric are reasonably related to the

District's goals an d

a

bona

fide attempt to ascertain value.

N/A

Special Review

42N/A

ITD Asset Management (Carryover)

We will perform

a special review to assist ITD to determ

ine the accuracy of its Asset

Managem

ent Database and

the

effectiveness and

adequacy of its asset

management policies and

procedures.

N/A

Special Review

ITD

43N/A

Maximo

Review of the control environm

ent in M

aximo with regard to access control, input

control, and management overrides.

N/A

Special Review

FSD

‐$

441410150

OHNO Construction Co.

University HS ‐ Track & Field Im

provements

$5,232,000

TE

FSD

451310114

Pinner Construction Co.

Fremont HS ‐ Modernization

& New

Construction

$61,932,150

TE

FSD

461510022

Trillium, USA

Com

pressed Natural Gas Fueling Station @ LAUSD

San

Julian Bus Lot

$6,775,920

TE

Transport. Unit

47N/A

Methane Safety Program

Review OEH

S compliance rate of ac tive mitigation system

sN/A

TE

OEHS

48N/A

Energy Management System

Review the

efficacy of EMS for energy savings, maintenance, indoor air quality

N/A

TE

M&O

73,940,070

$

49TBD

Pre‐Award Audits

Pre‐award audits are perform

ed upon

Facilities Contracts' or Procurement's requests.

These audits are perform

ed to determ

ine the

reasonableness of the rates that

contractors/vendors are proposing for LAUSD

projects. The

audited ra tes are used to

negotiate contracts for work to be perform

ed for LAUSD

.

TBD

Pre‐Award

PSD/ FSD

50TBD

Change Order Audits

Change order audits are perform

ed upon FSD requests for negotiated change orders

over $500,000

to determ

ine if the negotiated

amount is adequately supported and in

accordance with the contract's provisions.

TBD

Change Order

FSD

N/A

651,212,974

$

GRAND TOTAL:

CONTR

ACT AUDIT PLA

N FOR FY 2015 ‐ 2016

TOTA

L FO

R PROFESSIONAL SER

VICES CONTRACTS:

SPECIAL REV

IEWS

TOTA

L FO

R SPECIAL REVIEWS:

TECH

NICAL EV

ALU

ATIONS

TOTA

L FO

R TECHNICAL EVALU

ATIONS:

AS‐NEED

ED AUDITS

TOTA

L FO

R AS‐NEED

ED AUDITS:



Know about fraud, waste or abuse?

Tell us about it. Maybe you are a School District Employee, or maybe you are a private citizen. Either way, you are a taxpayer. Maybe you know something about fraud, or waste, or some other type of abuse in the School District. The Office of the Inspector General has a hotline for you to call. You can also write to us. If you wish, we will keep your identity confidential. You can remain anonymous, if you prefer. And you are protected by law from reprisal by your employer.

Call the hotline: (213) 241‐7778

Or (866) LAUSD‐OIG (866) 528‐7364 Write to us: Fraud Hotline Center 333 S. Beaudry Ave., 12th Floor Los Angeles, CA 90017 Website: www.lausdoig.org


Documents

Annual Work Plan Fiscal Year 2016 - Los Angeles Unified ...boe.lausd.net/...15BFAOIGAnnualWorkPlanFY2016Rev1.pdf · Report Submitted on 06/01/15, Revision #1. ... Our Internal Audit