A Special Performance Audit Classrooms for the Future

1 December 2008 Classrooms for the Future A Program Administered by the Pennsylvania Department of Education Jack Wagner, Auditor General Pennsylvania Department of the Auditor General Bureau of Special Performance Audits A Special Performance Audit December 22, 2008 The Honorable Edward G. Rendell Governor Commonwealth of Pennsylvania 225 Main Capitol Building Harrisburg, Pennsylvania 17120 Dear Governor Rendell: Enclosed is our Special Performance Audit of the Classrooms for the Future program administered by the Pennsylvania Department of Education, or PDE. The Audit covers the period of July 1, 2006, through June 30, 2008, with updates through November 2008, and was conducted in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the Audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our Audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our Audit objectives.

2 Classrooms for the Future is an innovative program designed to help Pennsylvania students increase their technological literacy, a necessary and vital job skill in our global economy. Based on our communications with participating school districts across the state, we found a high level of enthusiasm for the program. Specifically, officials from participating districts told us that students have benefited from the installation and use of the state-funded laptop computers; those same officials also said they could not envision their teachers and students now using only blackboards, pencils, and paper. Areas that need improvement are primarily those related to PDE s administration of the program, particularly the lack of transparency regarding the selection of participating districts and the determination of grant awards. School district officials perceived inequities in PDE s administration, and we found a basis for these perceptions. We also found that, even though all but four districts who applied for grants eventually received at least partial funding, PDE did not do enough to cultivate the participation of the 50 districts who never applied, or of the four districts who did not reapply after their initial rejection.

3 The Honorable Edward G. Rendell December 22, 2008 Page 2 Overall, our report includes 15 recommendations to address our four findings. Our first recommendation is based on the fact that not all participating districts will have completed their implementation plans by the end of this fiscal year, in large part because of the lack of funding. Therefore, we recommend that PDE continue the program in fiscal year 2009-10 to finish implementing the program. In that way, PDE can then measure the effectiveness of full implementation and can also plan whether or how to continue Classrooms for the Future beyond fiscal year 2009-10. Please note, however, that PDE must also demonstrate greater accountability with any funding that it receives for Classrooms for the Future . In fact, many of our remaining recommendations primarily address this issue as they relate to PDE s flaws in administering this important program. Therefore, we trust that you will direct PDE to follow our recommendations to ensure program integrity and accountability.

4 Please let me know if I can provide you with further information to expedite these improvements. Sincerely, JACK WAGNER Auditor General Enclosure A Special Performance Audit Page i Classrooms for the Future Table of Contents A Program Administered by the Pennsylvania Department of Education Pennsylvania Department of the Auditor General Jack Wagner, Auditor General December 2008 Table of Contents Results in Brief iiiIntroduction and Background 1 Finding One Meeting the goal to fund all high schools: Over three years, PDE eventually gave at least partial funding to all but four school districts who applied for Classrooms for the Future grants. However, PDE compromised its accountability by evading public scrutiny in the following ways: not telling 145 or more districts why they were rejected initially, not following up with 50 districts who never applied, and hindering the expedited completion of this Audit . 9 Recommendations 21 Finding Two Selecting grantees and determining award amounts: PDE was not entirely open when telling schools that grantees were chosen based on competitive application scores, or that award amounts were based on a formula using enrollment figures.

5 PDE did not tell schools exactly how or why it deviated from these criteria, thereby giving weight to concerns about the fairness of the processes. 24 Recommendations 35 Finding Three Verifying purchase and security of equipment: PDE took actions to verify that school districts purchased eligible equipment with their grants and protected the equipment from loss or theft. However, PDE did not go far enough, thereby making itself vulnerable to questions about the effectiveness of its monitoring. 37 Recommendations 45 Page ii A Special Performance Audit Table of Contents Classrooms for the Future A Program Administered by the Pennsylvania Department of Education Pennsylvania Department of the Auditor General Jack Wagner, Auditor General December 2008 Table of Contents, continued Finding Four Measuring results; planning for the Future : PDE has recognized the potential of Classrooms for the Future and has begun to measure results, but it has not really planned to sustain the program if positive results continue as expected.

6 This weakness in planning affects program momentum and could jeopardize educational benefits already achieved. 48 Recommendations 52 Appendix A Objectives, Scope, and Methodology 54 Appendix B School Districts and Vocational Schools Receiving Classrooms for the Future Grant Awards, by County, for Fiscal Years 2006-07 through 2008-09 57 Appendix C 50 school districts that did not apply for Classrooms for the Future grants in any of the three fiscal years 2006-07 through 2008-09; plus 4 districts that were denied in first year and did not reapply 70 Appendix D Questions and answers about the Classrooms for the Future program 72 Response from PDE 78 Audit Report Distribution List 87 A Special Performance Audit Page iii Classrooms for the Future Results in Brief A Program Administered by the Pennsylvania Department of Education Pennsylvania Department of the Auditor General Jack Wagner, Auditor General December 2008 Results in Brief The Pennsylvania Department of Education, known as PDE, should have been more transparent in its administration of the innovative Classrooms for the Future program, according to our Audit report in the pages that follow.

7 This Special Performance Audit covered the period of July 1, 2006, through June 30, 2008, with updates through November 2008, and was conducted in accordance with generally accepted government auditing standards. PDE s original goal was to put laptop computers in the Classrooms of every public high school over a three-year period, for a total of $200 million in taxpayer dollars $20 million in fiscal year 2006-07, and $90 million in each of the following two years. However, the $90 million budgeted for the third year (2008-09) was reduced to $45 million, leaving some districts underfunded based on the amounts for which they had originally planned. Because not all participating districts had completed their implementation plans at the time of the funding cut, we recommend that PDE continue the program in fiscal year 2009-10 to implement the program fully. In that way, PDE can then measure the complete program s effectiveness and can also plan whether or how to continue the program further.

8 Overall, we identified four findings and made 15 recommendations as the result of our Audit . There is a common theme on which the findings and recommendations are based; specifically, there is a need for PDE to demonstrate greater accountability in administering this taxpayer-funded program. In Finding One, we discuss the fact that PDE eventually gave at least partial funding to all but four districts who applied for Classrooms for the Future grants. But we also explain that PDE compromised its accountability by evading public scrutiny in several ways, including not telling 145 or more districts why they were rejected initially, not following up with 50 districts who never Page iv A Special Performance Audit Results in Brief Classrooms for the Future A Program Administered by the Pennsylvania Department of Education Pennsylvania Department of the Auditor General Jack Wagner, Auditor General December 2008 applied, and hindering the expedited completion of this Audit .

9 At the conclusion of Finding One, in addition to our recommendation that PDE should continue the program for fiscal year 2009-10, we recommend that PDE ensure that all Pennsylvania public school districts benefit from the program, not just those who applied, and be more publicly accountable regarding the program overall. In Finding Two, we report that PDE was not entirely open when telling schools that grantees were chosen based on competitive application scores, or that award amounts were based on a formula using enrollment figures. We also report that PDE did not tell schools exactly how or why it deviated from these criteria, thereby giving weight to concerns about the fairness of the process. Our three recommendations related to Finding Two are, in summary, that PDE should (1) adhere to the results from its scoring methodology when selecting grant applicants or, alternatively, should explain whatever different criteria it uses, (2) adhere to a funding formula in deciding grant amounts, and (3) publish its decision criteria on its Web site and in all program materials.

10 In Finding Three, we report that PDE took actions to verify that school districts purchased eligible equipment with their grants and protected the equipment against loss or theft. However, we also report that PDE did not go far enough in its actions, thereby making itself vulnerable to questions about the effectiveness of its monitoring. Our six recommendations to accompany Finding Three can be summarized as follows: PDE should (1) require grantees to submit invoices for all equipment purchased with Classrooms for the Future dollars, (2) require each vendor to itemize the costs of equipment purchased so that PDE can better monitor the districts expenditures, A Special Performance Audit Page v Classrooms for the Future Results in Brief A Program Administered by the Pennsylvania Department of Education Pennsylvania Department of the Auditor General Jack Wagner, Auditor General December 2008 (3) enforce the reporting requirements it has placed on each district, (4) make a concerted effort to conduct at least one annual site visit to participating districts, (5) document each site visit, and (6) establish minimum security measures and then require all grantees to document their compliance with these measures.