Summary
The D.C. School Choice Incentive Act created the first private kindergarten-through-grade-12 school-choice program supported by federal funds. The program was named the D.C. Opportunity Scholarship Program (OSP). GAO was asked to assess the (1) accountability mechanisms governing the use of funds, (2) results of the grantee's efforts to meet the program's recruiting priorities and eligibility requirements and inform parents of their choices, and (3) extent that the evaluation of OSP reflects statutory requirements and the implementation of the program supported the detection of useful and generalizable findings. To assess the program, GAO analyzed financial, program, and evaluation data. GAO did not assess the performance of participating private schools nor did GAO evaluate the impact of the program.
Following the Department of Education's selection of the Washington Scholarship Fund (WSF) to operate the District of Columbia Opportunity Scholarship Program, WSF greatly expanded its operations from $150,000 in federal and foundation grants in fiscal year 2004 to $12.9 million in 2006 without sufficient accountability mechanisms to govern the use of the funds. With such rapid expansion, WSF had little time to design and implement the needed systems, procedures, and internal controls for managing such a major increase in its operations. WSF's accountability was further weakened by high staff turnover, a lack of detailed fiscal policies, and nonintegrated accounting functions. We found that WSF did not adhere to its own procedures for making scholarship payments, and WSF's use of OSP funds to pay tuition for students attending schools that do not normally charge students tuition is not in accordance with the Act. Additionally, on the basis of a lack of documentation about whether before-and-after care included academic support, GAO was unable to determine if use of OSP funds to pay these fees was in accordance with the Act. Despite recruitment efforts and efforts to inform parents of their choices, WSF faced challenges recruiting students from schools designated as in need of improvement, ensuring private school quality and placement opportunities, and providing parents with accurate information regarding private schools. Students who were offered scholarships generally reported income consistent with OSP's financial eligibility standards, but, among students offered scholarships, students from schools in need of improvement were underrepresented relative to their presence in the population of District students. Although most private schools in the District officially participated in the program, the schools varied widely in the number of openings available to scholarship students, and few openings were available at the secondary level. The characteristics of participating schools varied, and some schools did not meet basic requirements to operate in the District, but the information WSF provided to parents to help them choose schools for children was not always complete and correct. The evaluation contractor developed a strong evaluation design that reflected the statutory requirements and used random assignment to strengthen comparisons between students offered and not offered scholarships. However, factors related to program implementation limited the ability to perform comparisons directed by the Act and the usefulness and generalizability of findings. For example, the Act directed the evaluation contractor to use the same test as the District used to measure achievement and to compare the achievement of students offered scholarships with students in District public schools. The contractor did use the test used by the District, but District officials adopted a new testing program the second year of the evaluation, making it infeasible to compare students offered scholarships with students in District public schools.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director:
Team:
Phone:
Cornelia M. Ashby
Government Accountability Office: Education, Workforce, and Income Security
(202) 512-8403
Recommendations for Executive Action
Recommendation: Given the importance of using funds appropriately to further program objectives and help ensure that schools are safe and provide sound educational experiences, parents are given accurate information about schools their children may attend, and program oversight is sufficient. The Secretary of Education should direct the Washington Scholarship Fund (WSF), the grantee, to establish and implement detailed policies and procedures to improve financial controls over Opportunity Scholarship Program (OSP) grant funds, including specific requirements for the process of approving scholarship payments and documentation of the process.
Agency Affected: Department of Education
Status: Open
Comments: The Secretary noted in her letter of Jan. 7, 2008 that Education's grantee, the Washington Scholarship Fund (WSF), is updating its financial manual to include further details recommended by GAO. She also noted that Department staff would continue to work with WSF to ensure that the financial system improvements are implemented, that the system is updated with all data for the 2007-08 school year, and that related policies and procedures are appropriately developed and updated, as necessary.
Recommendation: Given the importance of using funds appropriately to further program objectives and help ensure that schools are safe and provide sound educational experiences, parents are given accurate information about schools their children may attend, and program oversight is sufficient. The Secretary of Education should direct WSF, the grantee, to establish compensating controls, such as supervisory review, to reduce the risk of fraud in situations where segregation of duties is not possible due to the size limitations of OSP's staff so that no one employee can authorize, process, review, and have access to the funds relating to OSP.
Agency Affected: Department of Education
Status: Open
Comments: The Secretary noted in her letter of Jan. 7, 2008 that Education's grantee, the Washington Scholarship Fund (WSF), is updating its financial manual to include further details recommended by GAO. She also noted that Department staff would continue to work with WSF to ensure that the financial system improvements are implemented, that the system is updated with all data for the 2007-08 school year, and that related policies and procedures are appropriately developed and updated, as necessary.
Recommendation: Given the importance of using funds appropriately to further program objectives and help ensure that schools are safe and provide sound educational experiences, parents are given accurate information about schools their children may attend, and program oversight is sufficient. The Secretary of Education should direct WSF, the grantee, to continue its efforts to implement an integrated financial management system to facilitate processing and recording of scholarship payments and overall financial reporting.
Agency Affected: Department of Education
Status: Open
Comments: See response to related recommendations 1 and 2.
Recommendation: Given the importance of using funds appropriately to further program objectives and help ensure that schools are safe and provide sound educational experiences, parents are given accurate information about schools their children may attend, and program oversight is sufficient. The Secretary of Education should direct WSF, the grantee, to develop and implement procedures for conducting site visits, including that site visit reports be prepared and contain information on the overall financial stability of the school.
Agency Affected: Department of Education
Status: Open
Comments: The Secretary's letter of Jan. 7 states that since the release of the draft report, the Department has worked with Washington Scholarship Fund (WSF) to expand the documentation of the yearly school visits and to develop specific site visit questions and related procedures that will be in place for future site visits. According to Education, these site visit questions will verify school directory data, document the curricula used by the school, determine whether the school provides or requires professional development for teachers, and gather information on class structure and size. Additionally, Education states that WSF plans to visit as many other participating schools as possible during the school year, with the goal of visiting every participating school every other year. Educations' response goes on to state that, in the event that a concern arises with respect to the responsible use of Federal finds, WSF's Chief Financial Officer (CFO) will identify and collect the necessary documentation to analyze the school's financial information and processes. Upon completion of that analysis, the CFO will work with the school to recommend necessary changes to unacceptable processes, determine whether the school can continue to participate in the program, and work with District officials to expeditiously resolve any concerns about whether the school is operating lawfully.
Recommendation: Given the importance of using funds appropriately to further program objectives and help ensure that schools are safe and provide sound educational experiences, parents are given accurate information about schools their children may attend, and program oversight is sufficient. The Secretary of Education should direct WSF, the grantee, to develop procedures to ensure that accurate information is provided to parents before a school is chosen about the summary achievement data of students, teacher qualifications, and tuition levels, and that schools make such information available on an annual basis to parents of enrolled students.
Agency Affected: Department of Education
Status: Open
Comments: According to Education's letter of January 7, 2008, the Washington Scholarship Fund (WSF) has acknowledged that some errors and omissions existed in the WSF school directory reviewed by GAO. Prior to the next publication of the directory, WSF will establish a more extensive review process of the draft document. Education states that WSF will continue its practice of following up with each participating school at the end of each school year to certify that each school provided parents with information about student performance and school safety. Further, WSF will reevaluate its process for collecting and verifying this information and will include data verification questions related to student performance and school safety during site visits conducted during the school year.
Recommendation: The Secretary of Education should collaborate with the Mayor of the District of Columbia to ensure participating schools are in compliance with all relevant District of Columbia education and safety requirements, including school accreditation and health, safety, and fire code requirements, and receive approval to operate in the District.
Agency Affected: Department of Education
Status: Open
Comments: In her letter of January 7, 2008, the Secretary stated that Department staff and the new District State Superintendent of Schools, now the responsible official for the Opportunity Scholarship Program (OSP) under the MOU, had met to discuss and clarify the appropriate roles for the Department and the District regarding the OSP. She noted that an important area of cooperation will be ensuring that all schools meet the requirements of the District for operating lawfully and that the Mayor's office has directed the DC Department of Consumer and Regulatory Affairs to conduct inspections, on an expeditious basis, of the schools that GAO identified as not having appropriate occupancy permits. She indicated that as of January 7 there had been inspections of all schools mentioned in the report and follow-up inspections were scheduled for completion by early February for those schools that needed to take corrective actions. According to Education, the District's State Superintendent of Schools is assuming responsibility for ensuring that there is appropriate documentation for all private schools operating in the District, including those participating in the OSP, and by early January, the Department and the State Superintendent of Schools expect to sign an addendum to the current MOU to reflect these specific activities and any other responsibilities agreed to by the two agencies.
Recommendation: The Mayor of the District of Columbia should direct the Office of the State Superintendent of Schools to collaborate with the Board of Education to develop and implement procedures for ensuring that private schools in the District meet applicable District requirements and to actively participate in the oversight of OSP.
Agency Affected: District of Columbia
Status: Open
Comments: The District agreed with our recommendation and noted that the Mayor delegated direct oversight responsibility under the MOU with Education to the District's State Superintendent of Education. The Superintendent subsequently met with Education to discuss oversight issues identified by GAO, as well as monitoring the Washington Scholarship Fund's (WSF) compliance with statutory and regulatory requirements. Because the original MOU did not specify coordination or division of oversight roles, the Superintendent recommended to Education that they enter into a follow-on agreement to clearly assign roles and responsibilities. The Superintendent also met with WSF to explore ways that the District could help them better comply with federal and local statutes and regulations. The Superintendent assigned a staff member to act as the liaison with Education and WSF to ensure that the District's oversight obligations under the follow-on agreement were met. Finally, the Superintendent's office is developing a way to track the compliance of all non-public schools in the District with local regulations.
Recommendation: In planning for future programs for which Congress has required an evaluation, the Secretary of Education should take steps to make certain the program to be evaluated is overseen to ensure it is implemented in a manner consistent with the evaluation design.
Agency Affected: Department of Education
Status: Open
Comments: The agency's response did not directly address this recommendation. Education stated that the inability to compare OSP students to all students does not undermine the more important analysis of program impact. While Education adopted a strong methodology for its analysis of impact, as required by statute, we believe this comment is not responsive to our point that its evaluation was unable to provide a comparison between students offered scholarships and those in the same grades in District schools, as the statute mandated.
