Compass Rose Education, Inc.

Federal Program: Title I Part A ALN 84.010A Finding Type: Material Weakness in Internal Control over Compliance Criteria: Local educational agencies are required to allocate Title I, Part A funds to schools based on rank- and-serve criteria using poverty data. Schools with poverty rates above 75 percent must be served first, and allocation decisions must be driven by relative poverty levels, including when grade spans are utilized. Local educational agencies are required to establish and maintain effective internal control over federal awards to ensure compliance with federal statutes, regulations, and the terms and conditions of the award. Condition and Context: The School did not have adequate internal controls in place to ensure Title I allocations were developed and approved using a compliant rank-and-serve methodology. Adjustments were required to the allocations that were not detected and corrected timely by the School’s internal controls. Cause: Turnover in personnel led to gaps in responsibilities. Effect or Potential Effect: The School was at risk of not detecting and correcting noncompliance in allocating Title I Part A funds by campus in a timely fashion. Questioned Cost: N/A. Recommendation: We recommend the School develop, document, and implement a Title I allocation methodology that complies with ESSA rank-and-serve requirements, including clear procedures for applying poverty data and grade spans. Management should ensure allocations are reviewed and approved prior to implementation. Views of Responsible Official: The School will develop and formally document a Title I allocation methodology that complies with ESSA rank-and-serve requirements. The methodology will include clear procedures for ranking campuses by poverty, applying grade-span groupings where applicable, and ensuring that campuses with poverty rates above 75 percent are fully served prior to allocating funds to lower-poverty campuses. Management will implement a review and approval process for Title I allocations prior to the start of each fiscal year, including review by program and finance leadership.