EXECUTIVE SUMMARY:
The State agency developed a guide which offers some controls over the claiming of administrative costs. However, the administrative costs claimed by the State agency, as reported by the local school districts, still included unallowable costs, unsupported costs, and costs based on improper documentation. We found problems at the four school districts we visited, and believe similar problems could exist at the other school districts because of a lack of program oversight. We did not determine the financial effect of our findings, however, we believe our findings indicate that better controls are needed to provide assurance that costs claimed for Federal reimbursement are proper. We are recommending that the State agency establish controls to more closely monitor the administrative costs claimed by the school districts, including performing more on-site reviews at the school districts. The State agency generally agreed with our findings and recommendations.