Audit of The Office of Justice Programs Office of Juvenile Justice and Delinquency Prevention Awards To The Education Development Center, Inc., Newton, Massachusetts

REDACTED - FOR PUBLIC RELEASE
AUDIT OF THE OFFICE OF JUSTICE PROGRAMS
OFFICE OF JUVENILE JUSTICE AND DELIQUENCY
PREVENTION AWARDS TO THE
EDUCATION DEVELOPMENT CENTER, INC
NEWTON, MASSACHUSETTS
U.S. Department of Justice
Office of the Inspector General
Audit Division
Audit Report GR-70-11-002
Jan u a ry 20 11
REDACTED - fOR PUBLIC RELEASE
AUDIT Of THE OffICE Of JUSTICE PROGRAMS
OffICE Of JUVENILE JUSTICE AND DELIQUENCY PREVENTION
AWARDS TO THE EDUCATION DEVELOPMENT CENTER, INC
NEWTON, MASSACHUSETTS
EXECUTIVE SUMMARy 1
U.S. partment of Justice (DOJ) Office of the Inspector I,

Audit Division, has completed an audit of the grant for the ining and
n I nce Program Monitoring Involved Youth (MSIY),
grant number 2006-JU-FX-0161, and the cooperative agreement for the
I Youth Program ining and n I Assistance (TYP), ag
number MU- KOO awarded to the ucation Development Center,
Inc. (EDC) in Newton, Massach .2 The Office of Justice ram (OJP)
Office of Juveni J and Delinquency Prevention (OJJDP) awarded both
the MSIY grant and the TYP ag In total, received $3,093,400
through rant award, the reement award, and each awards'
su
M grant provided a total award of , including an initial

of $499,996 in September 2006, a supplemental award of $197,437
ber 2 and a second supplemental award of $ 000 in
2008. pu of the M grant was to provide traini
and techn I nce to support the development, enhancement, or
expansion of mentoring res and programs designed foster ca
reentry f and juvenile justice system involved youth.
The TYP reement provided a total award of I including an

initial award of $599,967 in ber 2007 1 a supplemental award of
$600,000 in September 2008, and a supplemental award of
4
$946,000 in 2009. pu of TYP reement was to
provide training and technical nce to Indian Tribes and Alaskan Native
commun that received gra under OJ piS Tribal Juvenile
1 The full version of this i information that the GIG considered to be

and therefore could not be publicly released. To create this public version of the
report, the GIG redacted the portions of the full report that are considered sensitive and
indicated where those redactions were made.
2 to be
agreements are used when the awarding agency vn<'...........
substantially involved with the awa activities.
3 In the sections of report where we discuss both the and the

agreement together, they are referred to as awards.
4 This report refers to the initial and supplementary awards as one award.
i
Accountability d ary grant program. The ining and technical

nce was incl the development programs to
safety within the tribal communities by ucing juveni
violence, and lid victim
The of our audit was determine whether itures

claimed for costs under the awards were allowa supported, and in
accordance with appl ble laws, ulations, guideli
conditions of awards. We also E ram nce in
meeting the awa objectives and overall accomplishments.
We determined that EDC did not fully comply with the award
uirements we . We reviewed E compl nce with n
essential conditions and found weaknesses in of nine areas we
(1) internal controls,
L'L..JL'L.U: ) award expenditu (3) budget
management and control, (4) compliance with award I conditions,
( monitoring contractors and sub-gra and (6) program performance
and accomplish We d not find wea to fina I and
progress reporting, drawdown of funds, or indi cost expenditures.
use of identified, we are questioning $286,698 or about
9 percent of the nding spent on the award related projects. 5
In performing our fieldwork, we found EDC did not comply with the
I requi of the awards. We found : (1) written internal
control ures were not uniformly applied resulting in both questioned
and unsupported for transactions re to conference, travel,
and consulting itures; (2) budget management controls were
inad ) compl nce with award special conditions was
inadequate; (4) monitoring of consulta and subcontractors was
incomplete; and (5) performance metrics to award funded
pu techn I and the number visits to
grantees remained incomp at the time of our field work.
These items are discussed in detail in the findi

recommendations section of report. Our audit scope, and
methodology appear in Appendix 1.
We discussed the results of our audit with EDC officials and have
included their com in the report, as appl ble. Additionally, we
requested a response to our d report from EDC and OJP, and their
5
General Act of 1978, as amended, contains our reporting
requirements for costs. However, not findings are dollar-related. See
Appendix II for a breakdown of our dollar-related fi and for of
costs.
ii
responses are appended to this report as Appendix III and IV, respectively.
Our analysis both respo as well as a summary of the actions
necessary to close the recommendations can be found in Appendix V of this
report.
iii
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TABLE OF CONTENTS
INTRODUCTION ........................................................................ 1
Office Justice Programs ............................................................. 2
Office Juveni Justice and Delinquency Programs ......................... 2
ucation Development ................................................ 3
Our Audit Approach ......................................................................4
FINDINGS AND RECOMMENDATIONS ........................................ 6
Internal Control ment ......................................................... 6
Award Expenditures ..................................................................... 7
Reporting ................................................................................. 13
Drawdowns ............................................................................... 16
Budget Management and Control ................................................. 17
Indirect ............................................................................ 18
Compliance with Award I Conditions .................................... 18
Monitoring Contractors a Subgra ....................................... 20
Program Performance and Accomplishments .................................. 21
Conclusions ............................................................................... 24
Recommendations ...................................................................... 25
APPENDIX I - OBJECTIVES, SCOPE, AND METHODOLOGy ........ 27
APPENDIX - SCHEDULE OF DOLLAR RELATED FINDINGS .... .

APPENDIX III - EDUCATION DEVELOPMENT CORPORATION
RESPONSE TO THE DRAFT AUDIT REPORT ...................... 29
APPENDIX IV - OFFICE OF JUSTICE PROGRAMS RESPONSE
TO THE DRAFT AUDIT REPORT ........................................ 48
APPENDIX V - OFFICE OF THE INSPECTOR ENERAL

ANALYSIS AND SUMMARY OF ACTIONS NECESSARY
TO CLOSE THE PORT .................................................. .
INTRODUCTION
The U.S. rtment of J (DOJ) Office of the Inspector I,

Audit Division, completed an audit two awards from the Office of
J Program (OJP) Office of Juvenile Justice and Delinquency
Prevention (OJJDP) the Education Development Center, Inc. (EDC) located
in Newton, awa included a grant for the ining and
Technical Assistance Program Monitoring System Involved Youth (MSIY),
grant num 2006-JU-FX-0161, and a for the Tribal
Youth Program ining and nical Assistance (TYP), agreem number
6
2007-MU- K002. Collectively, these two DP awa including all
supplemental funding totaled $3,093,400.
IVlSIY grant a $947,433 included an

initial award of $499, in Septem 2006, a supplemental award
$197,437 in September 2007, and a second supplemental award of
$250,000 in Septem 2008. The purpose of the MSIY grant was to
provide ining and technical nce support development,
enhancement, or expansion of mentoring strateg and programs designed
for care, reentry, and juvenile j system involved youth.
The TYP agreement provided a I award $2,145,967 that i uded

an initial award of $599,967 in September 2007, a supplemental award of
$600,000 in 2008, and a second supplemental award of
$946,000 in 2009. The purpose of TYP agreem was to
provide ining and technical nce Indian Tribes and Alaskan Native
commu that received grants under OJJ Tribal Juvenile
Accountability discretionary grant program. The training and
nce included developing programs to increase within
the tribal commun by reducing juveni delinquencYI violence l and child
victimization.
objective our audit was ine whether reimbu

claimed for costs under the awa were allowable, supported, and in
accordance with appl ble laws, regulations, gu ines, and the and
conditions of awards. We also program performance in
meeting award objectives and overall accomplish . The lowing ble
shows total nding period for the awards.
6 We audited a cooperative agreement and a grant award. However, for purposes of

this audit we will refer to these as awards throughout the report.
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OFFICE OF JUVIN JUSTICE AND DELINQUENCY PREVENTION
AWARDS THE EDUCATION DEVELOPMENT
.....
rn_~_-,I
.....
1"'1 I AWARD
AWARD START DATE DATE AMOUNT
. TECHNICAL ASISSTANCE PROGRAM FOR
MONITORING SYSTEM INVOLVED YOUTH:
2006-JU-FX-0161 10/ ./2 6 9/30/2008 $499,996 ,
I Supplement 1 9/11/2007 6/30/2009 197,437 I
Supplement 2 9/23/2008 6/30/2010 250,000 '
I Total 2006 rant $947,433 I
I
I
• TRIBAL YOUTH PROGRAM TRAINING AND
i TECHNICAL ASSISTANCE: I
· 2007-MU-FX-K002 7/1/2007 6/30/2008 $599,967 :
1_ Supplement 1 9/23/2008 8/31/2009 600,000 I
Supplement 2 9/24/2009 1/ 1/2010 ,,00°1

Total 2007 Agreement $2, ,f
I
Total AU Awards $3,093,400
Source: Office of Justice Programs.
Office of Justice Programs
Office of J Programs (OJP), within the U.S. rtment of

J provides primary management and oversight of the awa we
audited. rough programs and funded by bureaus and
offices, the OJP works to form partnerships among federal, state, and local
government officia in an effort im criminal j
increase knowledge about crime, assist crime victims, and improve the
ministration of j in America.
Office of Juvenile Justice and Delinquency Programs
of Juvenile J and Delinq Prevention (OJJDP)

within OJP. miSSion the OJJDP to provide national
ip, coordination, and resources to prevent and respond to juven
delinquency and victim . The OJJDP supports and commun
in their efforts to develop and implement effective and coordinated
prevention and intervention programs and to improve juveni j
-2
it publ holds offenders accou bie, and

provides nt and rehabilitative tailored to the needs of
juveni and their mil
Education Development Center, Inc.
According to ucation Development Center l IS (EDC) website l the

organ is a global non th d nSf delivers, and eval
programs which ress challenges in education, health, and economic
opportunity. e site on to that working with both pu ic-sector
and private cond 350 projects in cou around
world. research, training, and d opment
ed with ranging from
projects to la Ie national and international initiatives. EDCs work is
fu through grants and contracts from a variety of sources, uding
U.S. and n government agencies, private foundations, nonprofit
n and corporations.
Training and Technical Program for Monitoring System Involved

Youth
E award ment n the M would support

development, enhancement, or expansion of mentoring ies and
programs desig for and juvenile justice
involved youth. By Is ag to provide training
and techn I nce to im of ring rams
system involved youth.
Officials blished a delivera desig to measure the

progress of the program. A list key delivera to:
• Develop a national mentoring inventory identify programs

ng involved youth;
• Cond a planning m and orientation for the four mentoring

receiving awards under OJJD Mentoring Initiative for
Involved Youth;
• Maintain an information ring data to

communication between four demonstration sites;
• Conduct at least eight cross-site training to re the

innovations and accomplishments ach by other mentori
progra
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.. Conduct two ional mmg ded to implementing

and enha ng mentoring programs system involved youth; and
three technical assistance bull ns and three nical

nce b addressing of three categories of m
involved youth.
Tribal Youth Program Training and Technical Assistance
EDC nding provide ining and nical

Tribal Youth Program grantees. To ieve
Training and Techn I nce Center
that was designed strengthen American Indian and Alaska Native juveni
j education, mental Ith I services, culture, and
employment programs. bel that the of nce
center would support OJJDP's mission of reducing juveni
violence, child victim , and increase safety bal communities.
EDC planned to provide technical assistance through a team Technical
lists from across n country. These I
provide in juvenile justice risk reduction
tribal youth, capacity building, and systems nge, evaluation, and
sustaina lity.
EDC ned the a

demonstrating the importance
special and the E assistance center were to provide
techn I assistance to fou special and project director
nned to re problem-solving and capacity
building blish a close working relationship
with grantees it supported, E assistance center plan
carry out a variety of award-funded activities including: (1) strategic
planning meetings, (2) I (3) visits, (4)
learning, and (5) phone and web consultations. In addition, assistance
staff planned to new products and pt E existi
products and resources to the program.
Our Audit Approach
We compl nce with what we most

importa conditions the awa The against are
found in the current version of OJP Fina which serves as a
manual assisting award reci in their fiduciary bility
-4
uard award nds and ensure funds are appropriately. We also

relied on the General Service Administration Travel Regulations in
conjunction with our compl nce ng. We
• Internal control environment to determine whether the fina

accounting system and related internal controls were uate to
uard award funds and ensure compliance with the terms and
conditions the awards.
• Award expenditures to ine whether the charged

awards were allowable and supported.
• Reporting to determine if the uired periodic Financial

Reports and Progress Reports were submitted on and
accurately reflected award activity.
• Drawdowns to determine if EDC adequately supported its requests

for funding and managed award receipts in nce with
I requ
• Budget management and control to ine overall

bility of budgeted by identifying any budget deviations
between the amou authorized in the budget and the I
incurred for each budget category.
• Indirect costs to determ E procedures and charges related

to ind
• Compl with award conditions to ine if

complied with special conditions or specified in the award
documents.
• Monitoring contractors and subgrantees determine E

procedures and performance in monitoring contractors and
ra
• Program performance and accomplishments ine

whether achieved award objectives and to assess performance
and award accomplishments.
When appl ble, we also for compliance in areas of matching

program income, and accountable property. For both of EDC's
awards, we found no evidence matching program income, or
accountable property.
5
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FINDINGS AND RECOMMENDATIONS
COMPLIANCE WITH ESSENTIAL AWARD REQUIREMENTS
We determined that EDC did not fully comply with the award
requi in the areas lIy, we found:
(1) unallowable and unsupported costs related to conference
food and beverage, room, travel, and consulting
expenditures; (2) budget management controls were
inadequ because E accounting m could not
award expenditures based on approved budget categories;
(3) noncompliance with award I conditions for 2006
grant; (4) monitoring of consultants was incomplete because
EDC did not properly document all of the work performed by
its consultants; and (5) selected performance metrics
remained incom time our field work. As a result
of these defiCiencies, we question $286,698 in award
expenditures representing about 9 of the combined
total award budget. These conditions, including the
underlying causes and potential on both awards, are
further discussed in the body of the report.
Internal Control Environment
Our audit included a review of accounting and financial

management system and ngle Audit Reports to assess the risk of
noncompl with laws, regulations, guidelines, and the terms and
conditions of the awards. We also interviewed management from the
organization, observed accounting activities, and performed transaction
ng to further assess risk.
According to O]P ncial Gu award are responsible

for blishing and maintaining an adequate system of accounting and
internal controls. An internal control system provides cost and
property controls to ensure optimal use of funds. Award reCipients must
adequately ua funds and assure they are used solely for authorized
pu
Whi our audit did not assess overall internal

controls, we did the i I controls of EDC's financial management
system to administration of DO] award funds during the periods
under review. From our review we identified internal control wea in
some the areas we tested. officials told us they believed an
adequate system of internal controls was in place and offered no further
-6
explanation. However, our review of I budg controls,

campi nce with I conditions, the monitoring of award nded
consultants l and performance demonstrated inconsistent appl
EDC's internal Iy, we determi whi EDC had
written internal control procedu it did not uniformly apply procedures
to ensure that controls were working as i ded. From our review and
ng, we conel that th condition contributed to noncompl nce with
some award ui These i I control deficiencies we
identified are discussed in greater detail in body of the report.
a ce a effectively nctioni internal control
environment award funds and undermines the ability the
pient to ensure federal fu are ng adequately uarded and
accu and properly in accordance with the award objectives. In
ment, E management should the internal control
we identified.
Award Expenditures
We a judgmental sample of expenditures to determine if

they were allowable and supported. To determine if expenditures were
allowa we compared the expenditures to the award budget and
perm uses of funds oullin in the OJP Fi I uide and
incorporated in the terms a conditions of the awa To determine if
itures were supported, we reviewed pu docu invoices,
and accompanying accounting system data. We also tested personnel
expend res cha to awards by reviewing accounting for two
non-consecutive pay periods.
In most recent Federal nancial Reports for the qua ending in

December EDC reported I expenditures $776,668 and
$1,460,990 for the 2006 and 2007 awards, respectively. 7 For both awa
E expended $2, on awa related related indirect
ministrative conferences, person ,travel, and outside
consu
EDC officials told us that created a unique project code within

r accounting system seg and Ily track expenditures
made under the awards. Using the unique project codes, EDC officials
provided us with a tra list awa -funded expend res totaling
604 2006 grant and $1 5,004 for the 2007 agreement. The
7 In October 2009, the was from the Financial

Status Report to the Financial Because most of the forms we reviewed were
Financial Status Reports, that is how we refer to them in our
-7
primary nsactions included itures for travel, consu and

EDC-sponsored conferences. We tested a judgmental sample of
100 invoices Ii $220, or 28 percent, of the 2006 funds, and
125 invoices totaling $780,487, or 54 percent, of 2007 funds expended
the time of our on-site field work.
We initially sampled 25 detai expenditures from the each of the two

awards. However, we noted a trend concerning potentially excessive
conference food and expenditu we nded our sam to
include a 100 expenditures for the 2006 award and 1 expenditures
for the 2007 awa use the 2007 award included a la number of
food and beve itu we sampled more nsactions from
2007 award.
After sampling 225 transactions for both awards, we found unallowable

expenditures related food, beverage, and room expenditures
totaling $47,980, unsupported for consultant expenditures totaling
$111,381, unsupported travel nditures totaling $991 and other
unallowable itures totaling $1,3 . Collectively, expenditures
totaled $161,
Food, Beverage, and Room Expenditures
We tested the expenditures made in support of 11 conferences with

nificant food and expenditures 3 from the 2006 award and 8
from the 2007 award. To determine the allowable food and beverage
for conference, we on guidance outlined in OJP Financial
Guide. We calculated meal rates based on the General
Administration's (GSA) Travel u covering Is and Incidental
(M&IE) in effect the time and location of each conference. 8
Because OJP n that the cost of meals consumed during

conferences may exceed the normal GSA allowable meal costs, the nan
Guide permits meals consumed during a conference to exceed normal rates
by up to 50 percent per meal when all hotel service charges are included.
The Financial Guide also provides an allowance for light refreshments of up
23 percent above the normal daily meal charges. We calcu a
value for each conference-provided meal that included the normal meal rate
plus an additional 50 We a included an additional 23 percent
above the normal daily meal rate for light refreshments. We multiplied our
8 According to GSA travel regulations, approximately nine percent of a locations

total M&IE is allocated to incidental expenses.
-8
meal rates by the number of attendees for each day of the conference to
determine the total allowable conference food and beverage expenditures.
We compared allowable food and beverage expenditures to the

invoiced conference expenditures we received from EDC. We found actual
food and beverage expenditures exceeded allowable expenditures in 10 of
the 11 conferences tested resulting in questioned costs totaling $46,149.
We summarized the results of our conference food and beverage testing in
the following table.
Conference Food and Beverage Testing
Allowable Actual
Food & Food & Questioned
Location Date Attendees Beverage Beverage Costs
New Orleans LA Dec 2006 24 $2,690 $6814 $4 124
New Orleans LA Sept 2008 24 4,609 14 230 9,620
Newton MA Nov 2009 23 3359 8252 4893
Total 2006 71 j;10,658 $29J 296 $18,637
Santa Fe NM Jan 2008 47 $3,910 $5 121 $1 211

Squamish WA Feb 2008 53 2 157 1 120 0
New Orleans LA April 2008 29 2 019 5952 3933
Minneap_olis MN July 2008 69 ~151 7 526 3 375
Albuquerque MN Jan 2009 95 6,564 9493 2929
San Diego CA Mar 2009 0 4,211 5903 1 692
Oklahoma City, OK April 2009 65 5 180 6091 911
Crystal City, VA Nov 2009 117 15,991 29452 13,461
Total 2007 545 $44 183 $70,658 $27,512
Total Both Awards 616 $54841 $99,954 $46,149
Source: EDC accounting records and OIG Analysis.
For a 3-day conference held in New Orleans, LA, during September

2008, which was attended by 24 people, we determined actual food and
beverage expenditures exceeded allowable expenditures by $9,620, or $401
per person. The conference schedule included light refreshment breaks each
day totaling $3,386, or $47 per day per person. During the first day of the
conference, light refreshment cost averaged $64 per person. On the date
the conference was held, the GSA rate for IVI&IE in New Orleans totaled only
$59. Based on the GSA M&IE rate of $59, we calculated light refreshment
rates equal to $14 per day per person. The following table provides a
summary of both the dollar and the percent that actual light refreshment
expenditures exceeded allowable for the 3-day conference.
-9
September 2008 New Orleans, LA Conference

Actual Light Refreshment Compared to Allowable For 24 Attendees
Actual Actual Allowable Allowable Actual

Break Cost Per Break Cost Per Exceeds
Session Cost Person Cost Person Allowable
Day - 1 $1 526 $64 $336 $14 457%
Day - 2 1 128 47 336 14 336%
Day - 3 732 31 336 14 221 %
Total/Avg $3,386 $47 $336 $14 336%
.
Sources: EDC Accounting Records and GSA Travel Regulations.
In 10 of the 11 cases tested, we found conference food and beverage

expenditures exceeded allowable rates for either conference provided meals
or light refreshments. We asked EDC officials about the excessive food and
beverage charges in New Orleans and they told us OJP's Program Manager
approved a large conference in New Orleans totaling 450 rooms and $25,000
in food and beverage costs. However, when we questioned EDC officials
further on this issue, they were not able to provide us with any
documentation supporting their position that OJP gave specific approval for
this conference. EDC officials told us that after they signed a binding
contract with the hotel, OJP's Program Manager cancelled the conference .
However, the hotel held EDC liable for the original 450 contracted rooms and
the $25,000 committed to food and beverage expenditures. EDC officials
said they had to conduct numerous conferences at the New Orleans hotel to
meet the terms of the original contract.
We asked both EDC and OJP officials to document the circumstances

surrounding commitments to the hotel in New Orleans. However, neither
EDC nor OJP provided an explanation to support the original commitment for
such a large amount of award funding or the excessive food and beverage
expenditures we found at each succeeding conference in New Orleans. We
were unable to discuss the matter with the EDC and OJP Program Managers
who we were told made the initial decisions related to the cancelled
conference because the program managers were no longer employed by
their respective organizations. We were also told in our discussions with
EDC and OJP that there was no supporting documentation in writing that
would have explained the basis for the decisions.
For each conference tested, we found EDC entered into contracts

describing services the hotels would provide. We examined the contracts
and found evidence of management review in each contract tested.
- 10
However, in five we found unallowable room charges

totaling $1,831. Four of the conferences included no-show room
charges or unallowable alcoholic charges $831 and in one case
we found a dupl bill paid to a hotel totaling $1,000.
Un a traveler can demonstrate exceptional circumstances,

ment travel ulations place responsibility for no-show room
with traveler. As rt our review, we found no evidence that
followed up with the travelers determine causes for no-show
room charges.
Because we found ma for most of the

we tested and
q ned $47,980 in
Consultant
For both awards, E officials frequently provided n I assistance

using outside consulta functioning as independent contractors.
2006 grant, our review showed EDC's consu nts had experience
Ii with troubled youth. For the 2007 award/ we in that
employed individuals with related to Native American youth and
sensitivity to Native American culture. We found of management
review in many of the consultant nsactions we tested. Additionally I we
confirmed that consu nts provided iled descriptions of their Iized
and included vendor agreements that were reviewed by EDC
management a signed. However, our ng also disclosed
officials did not always have supporting documentation the work
performed and invoiced by award-fu consulta and the consultants
did always com their work. a result, we q ed unsupported
award-fu nt expenditures of $111, 1 in total.
During our testing, we found 15 cases where consultants documented

work with only an incom sentence ng they worked
on a project for a specific number of hours or days. In addition, in 3 cases
we nd incom consulta work. work was incom
because the consultants provided the work in a draft format and we did not
find final work. our view/ consultants should have completed
all required projects and submitted detai invoices with supporti
documentation specifyi days and hours worked on each
Moreover, because of the limited evidence supporting contracted consultant
work/ we could not ine level of techn I nce provided by
EDC officials to its consultants. As we d report, EDC
- 11
receives an indirect cost reimbursement to manage the work completed by

its consultants.
Our unsupported consultant expenditures also included one $79,000

contractor payment with limited supporting documentation and no evidence
a signed contract. The payment involved consulta in support of
a national conference for Native American youth. September 2009, the
consu nt submitted an incomplete invoice that EDC's accounting officials
correctly questioned. However, EDC paid the invoice based on a one
document bing services provided in only I Moreover! we
found no documentation of the work performed by the consultant in the
progress report submitted for the period, and no of
management's ht of consultant's work.
Travel Expenditures
Most of the travel vouchers we demonstrated sign nt

management scrutiny by EDC officials. Travelers submitted authorizations
to EDC officia for approval and EDC officials reviewed the authorizations,
insured the non conformed to government travel
ulations! and documented supporting invoices for award-funded travel
payments. However, from our sample testing l we a single travel
expenditure totaling $991 because of incom supporting documentation.
incomplete travel documentation concerned a trip made by an

employee who drove 1,708 mi between Min and Oklahoma
attend a 2007 award-funded meeting. The mileage expenditure totaled
$991 1 but we found no that Is conducted a
analysis to determine the most method of travel.
Documentation supporting trip did not uately explain the reasons
for the long auto trip or the total costs incurred.
Other Unallowable Expenditures
We questioned as unallowable two 2006 award-funded expenditures

totaling $904 because the project codes were i officia did not
provide supporting documentation for an additional 2006 award-funded
expenditure ling $471, and we questioned it as unallowa
Our review of 2 expenditures resulted in $161, in questioned

Our results are summarized in the following table.
- 12
Expenditure Testing Results
Total
Expenditure Unallowable Unsupported Questioned
Category Cost Cost Costs
Food & BeverafJe $46,149 - $46 149
Conference Hotel 1 831 - 1 831
Consultant & - $111,381 111,381
Contractor
Travel - 991 991
Other 1 375 - 1,375
Total $49,355 $112,372 $161,727
Source: EDC accounting records and OIG analysis.
Personnel Expenditures
For both awards, we tested a judgmental sample of personnel

expenditures during two non-consecutive pay periods. For the 2006 award,
we sampled salaries for four employees totaling $3,721 of $218,328, or
2 percent of the award's personnel expenditures. For the 2007 award we
sampled salaries for six employees totaling $6,596 of $203,348, or 3 percent
of the award's personnel expenditures.
We tested personnel transactions to determine if salary and benefit

expenditures were computed correctly, properly authorized, and accurately
recorded in EDC's accounting system. To determine if the expenditures
were computed correctly we compared the payments made to EDC
employees to their hourly rate and verified the payments matched the
number of hours worked on award funded projects. To determine if the
expenditures were properly authorized, we reviewed them for evidence of
supervisory approval. To determine if the transactions were properly
recorded, we verified that EDC officials accurately recorded each personnel
transaction in their accounting system. We determined that EDC correctly
computed, properly authorized, and properly recorded each personnel
transaction tested.
Reporting
Financial Status Reports
The financial aspects of OJP agreements are monitored through

Financial Status Reports (FSR). According to the OJP Financial Guide, FSRs
are designed to describe the status of the program's funds and should be
- 13
submitted within of the of the most recent quarterly ng

period. For periods when have been no program outlays, a report
that effect m submitted. for current award or future awards
may withheld if reports are not submitted or are late.
E officials told us they complete the FSR using a

Report (PSR). based on a project
ns award and expenditures in
accounting system ng the project's ned code. To determine each
expenditures for a period, produces a R
summarizing the expenditures by the date ra specified for each
We tested the four most subm
prior to our field work for both awards. We concluded each of the eight
reports were accu because each total expenditures
reported in the FSR agreed with the totals reported in EDC's accounting
records PSR.
We also tested R for timeliness using the criteria noted a

and we found EDC submitted seven of eight FSR's within time period
specified by OJP. We found one report was subm two days late but we
considered th rdy fili im I. use FSR's we
was accurate and submitted in a timely mannerl we concluded met
OJ fina I reporting nda
Progress reports provide information relevant to the performance of an

award-funded program and the accomplishment of objectives as set forth in
approved award application. According to the OJP I
reports m be submitted twice yearly, within 30 days after the end of
reporting periods of June 30 and ber 31, for I of the award.
an award recipient does not provide or include full details of the
funded ram implementation, OJ ability to monitor award activity is
impaired and there an increased risk that a project will be delayed or not
completed as intended. Additionally, is may cause funds to be wasted or
for unallowable purnr",.:u
both awards, we tested the timeliness of the four most recent

progress According to OJP's nt Ma System M
submitted four of the eight required reports on time. However, because
four reports subm ranged from only 1 to 18 days late, we
did not consider the lateness a material finding.
- 14
measure the accuracy and com the progress reports

both awa we each report to determine if the reports contained
I data, included accomplishments to program's
and accurately reported the data.
the 2006 Monitoring Involved Youth grant we found each

report included statistical d that related to the program objectives and
accurately repo the . For example in report endi
Decem 31 1 2009, EDC reported progress on the following objectives:
• EDC completed at
nded mentoring program;
•
developing a national d on survey
responses from over 400 organizations serving system-involved
youth; a
•
published a monthly
ng cross-cu in mentoring relationshi and
evaluation and ration site and d
individuals including all rgeted grantees.
For the 2007 Tribal Youth Program reement we found each report
included statistical that to the program's objectives and
accurately reported the data. For example in its report ending June 30,
reported:
• program ma
that incl tribal cultural
by 88 pa pa ng 21
rated positively;
•
and i that
by experts n Indian and
n cultures, was by partici nts ng
tribes, and 89 percent of the attendees rated positively;
• EDC
officials planned and coordi regional training that i uded
ining suicide prevention and Tribal Youth Program Video
- 15
ing, was attended by 40 partici nting bes,

of the positively; and
From our of the progress we EDC

Is generally subm in a timely manner. considered
reports nically because they accurately bed work
accompl to program's objectives, and rts a
included statistical describing EDC's progress towards meeting the
program objectives. However, for 2006 award we noted several key
program objectives that were either incomplete or We
d these concerns in Program Performance and ADcorn
section of report.
Drawdowns
Drawdown a term used by P to descri when a pient

funding for expenditures associated with an award program. The OJP
Fina I ide the methods by which DOJ makes payments to
awa . The methods and procedures for payment are desig to
minimize the time between transfer funds by government and the
d rsement of funds by the awa . Awa may id in nce,
provided maintain procedures the time between the
transfer nds by govern disbu of fu by the
The nancial Gu recom that drawdowns completed in
nce of expenditures expended immediately or within 10 days of
drawdown
At the time of our field work, EDC had drawn down $748,354 for the
2006 award a $1,348,697 for the 2007 award, for a total of ,097,051.
An official told us that had not requested any advances duri
award periods and we found no ce of nce payments. Th same
official said drawdowns were calculated for period on the
expenditures found in a nsaction detail rt i from
accounting system. The transaction II report provided a summary of
award-funded expenditures by project e for award. e resu of
the drawdown calcu were provided to an accounting manager who
prepared invoice to req funds for each EDC project
Award-funded expenditures were reimbu by OJP through ic fund
tra to E account desig financial institution.
- 16
Because we found had adeq procedures in place to calculate

requi amount of the drawdown, and use procedures were
working as intended and minimized that the time between the drawdown
and d ursement of funds, we concluded that met OJP's drawdown
sta rds. However, we did find an inconsistency drawdown
amounts and its compliance with the award's special conditions. We d
issue later in the report.
Budget Management and Control
The OJP Financial uide resses budget controls surround the

financial management of awa reci Accordi to
nancial Guide, awa are permitted to make nges to their approved
b to unantici program uirements. However, the
movement funds between approved budget in excess of
10 percent the I award m be approved in nce by OJP. In
addition, Financial Guide uires all award reci esta and
maintain program accounts which will enable sepa identification and
accounting funds appl to each budget included in the
approved award.
In making each award, OJP provided EDC with an approved itemized

budget r both awa OJP approved budgets
providing additional funding through two supplements for each award.
Is told us that the budgets they maintained in their accounting system
were not on the appl submitted OJP. a EDC could
not provide a report on the OJP approved budget for award
would allow for a budg versus actual expenditure comparison by individual
budget category. E officials told us they believed that their method of
accounting for award funding on application was more
compreh use it included more budget categories than OJ
approved budget, and in their view was a more meaningful management
tool. After completing our field work, EDC officials reed to provide us with
a budget ma supported by detai expenditu based on
OJ approved budget categories for each award. Our intention was use
th report expenditure testing pu and to ma an independent
budget versus actual expenditure com rison. However, after completing
our field work, E never provided a budget management report we
could reconci to the expenditures reported in EDC's accounting system.
As rt of our audit we compared the total expenditures by the

approved bud category to award funded expenditures nd in the
grantee's accounting system. However, because EDC did n ma n
- 17
financial records based on OJ approved budget categories, we could not

ine if E budget management were uate. In our
judgment, when pients do not track expenditures by approved budget
or monitor the budget verses actual, awa management
is potentially undermined and the ability to adequately uard award
funds is compromised.
Indirect Costs
Indi are of an orga are not readily

assignable to a rticu r project, but are necessary to the operation of the
nization and performance of project. The of operating and
maintaining facil depreciation, and administrative salaries are examples
of the types of costs that are usually as indi OJP nancial
Guide stipulates that recipient's may use current indirect cost rates approved
by another I agency.
provided us with current app indirect from the

Agency International Development (USAID). USAID approved
EDC's indirect costs for overhead indi ( . 5 percent) and sub-awa or
contractor indi (5.0 percent) cost
officials told us they report from r

accounting system to calculate total indirect cost expenditures for
award on a quarterly basis. To verify E indi calculations for
both awards, we selected the five fiscal quarters ending between December
2008 and ber 2009 1 and computed the I ind cost expenditures
for both the overhead and sub-award cost categories. For each quarter
rucrLC>rl, we calculated indirect expenditures that with
calculated indi cost expenditures.
use used an indirect approved by another federal

use we determined methodology for calculating
met the indirect cost
ui
Campi with Award Special Conditions
Award I cond are included in terms and conditions r

each award and are provided in the accompanying award documentation.
The I conditions maya include I provisions unique to the
award. We reviewed the special conditions found in the award documents
and accompanying adjustment for both awards. Whi we
determined from our review that E met the special condition requirements
18
for the 2007 award, we also identified several instances where did not
all of the I condition requi for the 2006 award. use
officials made funding req (drawdowns) during a period when they
were not in compliance with all mandated I conditions, we question
$1 971 as unallowable award-funded expenditures.
Our independent review of OJP's Grant Management System (GMS)

showed that did not comply with I conditions included in
2006 grant award documentation. We summarized those instances of
noncompliance with award special conditions below:
.. The recipient II submit one copy to OJJDP, including an

electronic copy, of any final reports, publications, video, compact
disk (CD), or d ital video d (DVD) developed with funds
awarded by OJJDP;
.. Deviations from the project's approved timeline must receive prior

approval from OJJDP;
.. pient to submit , on performance

measurements approved by OJJDP 1 to OJJDP's Performance
Measures Website;
.. Prior to publication, the reCipient m submit all reports and

written products developed from award funding to OJJDP for review
and comment;
.. The reCipient agrees to comply with all confidentiality and privacy

requirements noted in the Consolidated i Regulations, Part
; and
.. The reCipient agrees to uti! OJJDP Protocols as minimum

standards in developing curricula, delivery of technical aSSistance,
and evaluation of training.
We officials and OJP's Program manager to provide

complied with the special conditions noted above but we
received no to our req information.
did not to our inquiries, we concluded that
comply with six award I conditions.
We additional award special conditions for the 2006 and

2007 awards that restricted ability to drawdown award funding.
Those special conditions related to two : (1) final OJP approval of
19
budget, and (2) submission of implementation plans or milestones to

OJP. prior audit we seen OJP generally provides
a Grant Adjustment Notice (GAl\!) to remove the funding restrictions once
the award pient the terms of the I conditions.
In ng compl nce with I conditions for award, we

determined th funding req (drawdowns) were made only after
ng a GAN from OJP that removed all funding restrictions use E
had satisfied all of the terms of special conditions. In reviewing the
2006 grant, we under su I award funding
to Special Condition 16, EDC was required by OJP to submit a strategic
implementation plan making any funding uests (drawdowns).
However we found
j made funding requests beginning in April 2009 even
though OJP had not issued a GAN removing all funding until
September 2009. Moreover, during the period between initial April
2009 funding uest until it received and OJP approved GAN removing all
funding restrictions, a total of $124,971 in award funding was requested. As
a result we question this amount as unallowable award-funded expenditures.
told us they believed they had submitted their

implementation plan before making any award funding requests.
rthermore, these officials believed they met all of the award
conditions because OJ financial management system allowed them to
continue making funding req without imposing any restrictions. In
reviewing the award documentation we determined that failure to comply
with the award I conditions can lead to in the award.
Noncompliance with this requirement not only places award funds at risk for
misspending but also the possibility that the achievement of
award-funded goals and objectives will be compromised.
Monitoring Contractors and Subgrantees
According to the OJP nancial Guide, award recipients should monitor

organizations under contract in a manner that ensures compliance with the
awa overall financial management requirements. As noted ea in
the under expenditure testing, we i that officia did
not adequately document the work performed by their consultants and that
award-funded expenditures for food a beverages
conferences did not always conform the terms and conditions of awards.
Duri our review of for under both awa we found
evidence that officials completed detailed contracts for award-
funded event and EDC's consultant's completed contracts describing both the
payments to be made to contractors and the of contractor's work.
- 20
We 10 executed contracts supporting award-funded events and

found that each of contracts included i information bing the
support provided by hosting facility (hotel) that
included a lodging rate equal to the I Services Administration
approved per diem rate for time period the event occurred and
geograph location of the facility. However, because our award-funded
expenditure transaction testi bed earlier in the report revealed
weaknesses in both contractor work- monitoring and unallowable food
and expenditures, we determined monitoring of its
contracted work needs improvement.
Program Performance and Accomplishments
EDC received award funding to provide Training and Technical

nce Monitoring Involved Youth and Tribal Youth
Program Training and Technical Assistance Agreement. The MSIY award
supported the enhancement and implementation of mentoring organizations
to serve youth involved in the juveni justice system and foster care
system. The TYP award objectives included ing American Ind n
and Alaska Native programs critical to OJJDP's mission of reducing juvenile
delinquency, violence, child victimization, and increasing in tribal
commun We found evidence made adequate progress towards
achieving program and OJJDP's program manager told us
was satisfied with the award progress. However, because EDC did not
complete all delivera identified in the MSIY award we nded our
testing and found incomplete program objectives.
Tribal Youth Program Training and Technical "..:J.71..:J<'
Between July 2007 and August 2010, received

provide technical assistance to federally recognized Indian tri
nce included grant management training for new grantees, grant
management training for existing grantees, and program monitoring training
for both new and gra OJJDP program manager
reviewed specific examples of technical assistance provided to the Indian
tribes including: (1) planning, ( regional training, and
(3) individual visits. She noted that received positive feedback
from users for all of n I nce provided. Based on our review
of the progress reports and tile feedback provided by the OJJDP program
manager, we concluded that EDC was making satisfactory progress towards
achieving TYP program objectives.
- 21
Training and Technical Assistance Program for Monitoring System Involved

Youth
Between October 2006 and September 2008, EDC received $947,433

to provide training and technical assistance to the four mentoring sites that
received OJJDP funded mentoring program awards. 9 The MSIY award
included 13 deliverables designed to measure program progress. We
verified the deliverables listed in the award against to those contained in the
Progress Report for the period ending December 31, 2009, and found no
discrepancies.
We judgmentally selected 4 of the 13 deliverables for expanded testing

and we asked EDC officials to provide evidence to support the completion of
those deliverables. We analyzed the supporting documentation obtained and
compared the content to the deliverable requirement. We found EDC did not
meet each deliverable requirement and we summarized the four deficiencies
below.
MSIY AWARD PROGRESS
As of June 2010
Deliverable Deliverable
Description Results Achieved
Conduct not less than Six of eight onsite
eight onsite technical technical assistance No
assista nce visits visits conducted
Write, edit, print, and Three TA bulletins
disseminate three TA and three TA briefs
No
bulletins and three TA remained in draft
briefs
Conduct two regional No regional training
No
traininq sessions conducted
Conduct not less than Three of the eight
eight cross site training cross site training No
visits visits conducted
Source: EDC Program Support and OIG analysis.
EDC officials told us they did not meet the award's deliverables
because:
9 The four sites include Chicago, Illinois; Oakland, California; Richmond, Virginia;
and Portland, Oregon.
- 22
• Budget shortfalls and layoffs of site ma taking place two

caused delays in the required technical assistance visits, and
official were waiting for OJJ to approve the revised visit
schedule;
• Officials completed three draft copies of Technical Assistance

I ns and n I nce and were wa ng for OJJDP
to approve the draft documents;
• EDC revised the deliverable schedule and they conducted one

national instead of two ional training
noted in the award;
• Officials modified the cross site visit program to substitute two

conferences five uired visits;
We Is document their correspondence with OJJDP

regarding these An official told us they could not document the
correspondence because followi events during award
period:
• EDC's original OJJDP Program Manager no longer worked at OJJDP,
• The next OJJDP m Manager revised the MSIY program initial

objectives,
• Project Director unexpectedly away and was replaced

by a new Project Director, and
• The project's limited resources made it difficult to accomplish the

program's
We asked an OJJDP official to comment on progress. The OJJDP

official told us EDC was uired to: (1) perform an assessment of each site
to ine its requi (2) develop a nical nce Plan (TAP)
to meet each site's requirements, and (3) conduct follow-up with each site to
determine
OJJDP official told us that although developed a for each

site, they d not com a to determine each site's
unique prior to completing the TAP. In our view, to successfully
accomplish the award's terms and conditions, should have completed
the site prior to developing the TAP.
- 23
The OJ] official also told us that the four mentori sites were
selected because the exhibited complex problems related to system
involved youth, and the found it was difficult to blish DP gra
funded mentoring programs. We were told that EDC should have provided
the with the required ish mentoring programs.
Moreover, EDC's visit reports did not provide any new information about
any of the four mentoring sites th would help the address r
complex mentoring O]JDP official said EDC focused on a more
national or global approach to mentoring when they should have focused on
the four identified in the award.
We found that site visit reports contained well documented

rvations made during the two However, our opinion the
reports did not any recommendations or solutions the problems
documented in site visit reports. could provide no documentary
support ims OJ] a the site visit,
conference, or training schedu changes nor did we receive evidence
indicating developed all uired reports in the final format.
believed that OJJDP approved all program changes and officials told us they
provided d to O]JDP approval.
In summary, we found no evidence to ind conducted the

initial of the four mentoring sites and we could not document
the schedule changes and substitutions officials claimed OJJDP
approved. Moreover, visit did not in
recommendations or solutions to identified in the reports.
As a result, we determined that EDC did not the MSIY award
delivera we a pient materially fai to comply with the
terms and conditions an award, OJJDP may ta action including
terminating the current award or withholding future awards.
Conclusions
We determined EDC did not fully comply with award requirements in

the areas we . We found wea in EDC's im of its
internal control procedures resulting in questioned for food
and travel, and consu nt expenditures. We found that
whi a comprehensive financial management and
accounting system, they could not track award expenditures by of the
approved budget as required by OJ Financial Guide. EDC
officia blished procedures for calculating award drawdowns; however,
ures were incomplete use ey did not always consider
funding restrictions imposed by the awards' I conditions. We also
- 24
could not determine if officia complied with all of the I cond

noted in the award.
nts executed iled vendor agreements

describing the work performed, but E officia d not
always effectively monitor the consultant's time charges to the award-
fund projects. We fou several key performance related to
award-funded publications, techn I assistance, and the number of site
visits provided to gra remam mcomp . As a result of
deficiencies, we question $112,3 in unsupported expenditures and
$1 in unallowa expenditures. I dollar- findings of
$286,698 represent about 9 percent of all funding under the awards.
Recommendations
We recommend that OJP:
1. Remedy the $46,149 in questioned resulting from unallowable

conference food and expenditures.
2. Remedy the $1,831 in questioned costs resulting from unallowable

conference lodging charges.
3. Remedy $111,381 in q resulting from unsupported

consultant charges.
4. Remedy the $991 in unsupported travel costs and the $1,375 in

unallowable for other m laneous res.
5. re EDC Is blish adequate internal controls for budget

management to include the design and implementation of procedures
that enable sepa identification and accounting for budget
category described in the award, and allow for an ongoing budget
versus I comparison.
6. re compl with all of the ining and Techn

Program for Monitoring System Involved Youth grant award
conditions.
7. edy $124,971 in unallowable costs from

drawdown of Monitoring System Involved Youth grant funds during a
of non-compliance with the award special conditions.
- 25
8. Ensure EDC officia develop i I control procedures to adequately

monitor work performed by consultants.
9. officials n performance measures and collect data to

Training and Technical Assistance Program for Monitoring
Involved Youth program objectives.
10. re EDC completes each ned deliverables and meets all of

the bl by Training and Techn I nce
Program for Monitoring System Involved Youth award.
- 26
APPENDIX I
OBJECTIVES, SCOPE, AND METHODOLOGY
The objective of the audit was to determine whether reimbursements

claimed under the awards were allowable, supported, and in
accordance with applicable laws, regulations, guidelines, and the terms and
cond of the awards, and to determine program performance and
accomplishments. The objective of our audit was to review performance in
the following areas: (1) internal controls, (2) awa expenditures,
(3) progress and financial reporting, (4) drawdowns, (5) budget
management and control, (6) indi (7) compliance with special
conditions, (8) monitoring contractors and ra and (9) program
performance and accompl ments.
We conducted th performance audit in accordance with lIy

accepted government auditing ndards. standards require that we
plan and perform audit to obtain sufficient, appropriate evidence to
provide a reasonable for our findings and conclusions based on our
audit objectives. We believe that obtained provides a
reasonable for our findings and concl based on our audit
objectives.
We audited a I of $3,093,400 in Tribal Youth Program Training and

Technical nce grant nding and Training and Technical nce
Program for Monitoring System Involved Youth grant funding awarded to the
ucation Development Inc. Our audit concentrated on, but was not
limited to, the initial award of the 2006 grant in July 2007, through the end
of our additional field work in June 10.
We compliance with what we consider to be most important

conditions of the awards. Un otherwise stated in our report, the criteria
we audited nst are contained in the Office of Justice Programs Fina I
Guide, the GSA Travel Regulations, and the award documents.
In conducting our audit, we tested award in the

following areas: award expenditures, progress and financial reporting,
drawdowns, indirect costs, budget management and control, compliance
witl1 award special conditions, monitoring contractors and subgrantees, and
program performance and accomplish . In addition, we reviewed the
internal controls of financial management system specific to the
management of DOJ funds during the award period under review. However,
we did not the reliability of the financial management system as a
whole. We also performed limited of source documents assess the
accuracy and completeness of reimbursement and financial
reports. These were expanded when conditions warranted.

APPENDIX II
SCHEDULE OF DOLLAR-RELATED FINDINGS
QUESTIONED COSTS AMOUNT PAGE
Unallowable itures - Travel and Other 13
Unsupported Expenditures 11 372 13
Unallowable itures - Noncompliance with

Special Conditions 19
Total Dollar Related Findings $286,698
Questioned Costs are expenditures that do not comply with legal, regulatory, or
contractual requirements, or are not supported by documentation at the time of
the audit, or are unnecessary or costs may be remedied
waiver, recovery of funds, or the provision of documentation.
- 28
REDACTED - PUBLIC RELEASE
APPENDIX III
EDUCATION DEVELOPMENT CORPORATION, INC.

RESPONSE TO THE DRAFT AUDIT REPORT
11111 Education Development Center,
October 29. 2010
Mr. Thomas Puerzer
Office of tile Inspector General
Philadelphia Regional Audit Office
701 Market St.. Suite 201
PA 19106
VfuFedEx
Dear Mr. Puerzer,
Enclosed find the hard of EDC's response to the Audit of the

Office of Justice Office Justice and Delinquency
Prevention Awards to Education )eVlelO1Dmlent Center, Inc. These
mateliaJs were also scnt to you via Please let me know If you have
any
Sincerely.
\r::[{Z~J{il &~~
Ch~H~~~ay
Vice President and Chief anetal Officer
'j') eh.pd Sir"'" • MA 02458 • Tel: 617"969-7100 • Pax: 6l7·%9-5979 • wwwcdc.org
Education Development Center, Inc.
Response to Draft Audit Report for Grants 2006-JU-FX-OI61
and 2007-MU-FX-K002
Office of the Inspector General of the U.S. Department of Justice (DOJ) recently conducted
an audit of two projects funded by the DOJ's Office Juvenile Justice and Delinquency
Prevention (OJJDP) and conducted by Education Development Inc. (EDC). two
awards are a 2006 grant (the Technical and Program for Mentoring System-
Involved Youth-MSIY: 2006-JU-FX-0161) and a 2007 agreement (the
Youth Program Training and Technical 2007-MU-FX-K002).
received the draft audit report on September 30,2010. In some instances we agree with the
auditor's findings and recommendations. However, are inaccuracies the audit
report which would to clarify and have corrected.
A recurring theme of audit is that did not prior approvals.

closely with the OJJDP Project approvals
when we were required to do so, but not in writing. We the importance
of and frequent contact between the OJJDP and EDC.
communication required in a Cooperative Agreement is frequently done in the form of
telephone and emaiL We have been particularly attentive to special condition 12 the
cooperative agreement, which " ... OJJDP's participatory role in project is as
follows:
approve major work plans, changes to plans, and

to operations.
b) ... Provide guidance in significant project planning meetings, and participate in
project sponsored training events or conferences."
believes that it was following proper protocol by working in such a collaborative

manner.
The following the Following to

ten recommendations, we have noted other ""'''ClV'A'' the report should be removed
or
EDC's responses to the ten recommendations contained in the draft report follow.
~~!.!!!!~~!..!;!.!;:~~
Remedy the $46,149 in questioned costs resulting from unallowable
conference food and beverage expenditures.
EDC Management Response: Of the $46,1 in questioned costs related to conference good
and 12 is associated with meetings that the 2006 (Le., the Tribal Youth
- 30
Program and Technical carried out with OJJDP approval.

For almost all of the meetings, OJJDP's process did not enable EDC to select meeting
locations or foods and beverages that were most cost The following describes the
standard process by which the meeting and foods and beverages were selected for
• The OJJDP Tribal Youth Coordinator decided and informed of the and the
city in which an upcoming meeting was to be held. grantee meetings are rotated
from to region). EDC followed the instruction given in special condition 12, as
noted above, that states, "OJJDP is to provide III project planning
"
project director contacted a wide variety of hotels that city to determine which
had suitable meeting room and sleeping room accommodations the meeting. In many
instances, including the meetings indicated below, there was only one hotel in the city that
had sufficient meeting and sleeping rooms available on the required dates. no
choice but to schedule the at that location,
• OJJDP required that provide all participants with a continental breakfast,
beverages, and snacks for every day every meeting. None of the hotels in question
would allow to provide food through an external thus, we were obliged to
pay what the hotel's catering charged for continental breakfast, beverages, and
following to snacks at the TYP also bear noting:
American Indians TYP staff know that in order to earn the trust of
American Indian grantees and to engage them in the content of a training event-essential
components of providing effective TTA-it was crucial to provide participants with a
reasonable breakfast. At no point did staff order or food or
beverages for the TYP Breakfast was generally continental and at times included
other breakfast items like fruit, granola bars.
Ali of the participants at the TYP were Indian.
people suffer from disproportionately high rates of diabetes, EDC took care to serve
vegetables and fruit at meeting rather than sugar-laden, high-fat foods. Hotels
charge much more and vegetables than they do for cookies, brownies, and other
such dessert foods served at meeting breaks.
The $18, in questioned food and costs are associated with

meetings that the 2007 grant (Mentoring System-Involved Youth-MSIY) conducted. The
majority of questioned food and beverage costs MSIY are associated with a that the
project conducted in September 2008 at the Hotel Monteleone in New Orleans. We explained the
circumstances behind this meeting to the auditors. The foliowing describes the
that contributed to the food and costs at this meeting:
- 31
The first OJJDP Program Manager (PM) assigned to the MSIY instructed staff to
carry out a national meeting for 100 or more mentoring practitioners from across the U.S. rather
than small the four OJJDP-funded MSIY grantees that committed to
carrying out in application. The PM required that national
practitioners that were not funded by OJJDP and that held in
September 2007 New Orleans at a hotel that PM selected-the Hotel Monteleone.
March 2007, we were informed by OJJDP that a new PM had been to MSIY. We had
several with the new PM over the next several months. In December 2007, the new
PM conducted a two-day to to learn more about MSIY and to discuss the budget,
timelines, deliverables, etc. At that the new PM and it would be
inappropriate to move ahead with the first PM had. Additionally,
the new PM that should focus on four OJJDP-funded
mentoring grantees that our application was designed to serve, and not a national audience of
EDC consulted with General Counsel and the Hotel Monteleone to explore
cancelling contract that the PM had required us to Both parties confirmed that
was liable for entire amount of contract. Then:
• The new OJJDP PM with PMto if original PM

another that could hold a assume the costs
associated with contract. answer was no.
• OJJDP Training and Coordinator contacted to whether there might any
other OJJDP-funded projects that could hold a at the hotel and assume the costs
associated with the contract. There were none.
• The new PM encouraged staff to identity other groups willing to hold a large meeting
at the hotel and willing to assume the costs with contract. As a result of
much hard work on the of staft: we were able to the originally proposed
national meeting for 100 participants with the following four at
Monteleone:
,; A Tribal Youth held May 2008
(the was supported with OJJDP TYP funds)
,; Two Schools/Healthy Students held in

April 2008 (the meetings were supported with HHS/SAMHSA
funds).
,; A small four MSIY through the

MSIY (the was supported with OJJDP
MSIY grant funds)

contract with hotel, four replacement meetings had to use

guest room and $25,000 in costs (amounts the
determined). The that were or was
on food and EDC would be EDe presented
this plan to our OJJDP Program Manager, who verbally agreed that replacing the one
large meeting with four small meetings (three of which were not associated with the MSIY
project) was the available option.
to meet contract's required 450 guest room across four meetings.

prior to final (the MSIY September 2008 there was
approximately $14,000 in food and beverage costs remaining that to be spent at that
meeting or the hotel would simply charge EDe that amount. Given the the
September MSIY participants), we would not met minimum
food and beverage cost requirement without providing full meals and plentiful snacks
throughout the meeting. We do not dispute the tact that EOC exceeded allowable food costs
this Our doing so was an effort to the that
would have had we reneged on this contract-which our first OJJOP PM
required that even though it was not with the and
objectives. This explains why the and costs September 2008 MSIY
at the Hotel Monteleone were significantly higher than customary.
It should noted that the auditors' calculations of conference food

expenditures. On draft audit report, is a table outlining a of
conference food ....F,''''u,'''' allowable costs.
calculations same accounting that we provided to the
established daily meal Financial Guide guidance on allowable
conference meal costs. Our calculations Exhibit 1) reflect $38,515 in questioned costs, not
the $46,149 stated the report.
For the reasons cited above, EDC requests that the $46,149 in questioned conference food
and beverage costs allowed and that the charts that appear on 10 and 11 be
removed from the audit report.
~~~~~~!!!...;:!::'..Remedy the $1,831 in questioned costs resulting from unallowable

conference lodging charges.
EDe Management Response: It is EDC policy that all costs charged to a project must be
allowable and documented. with auditors' assessment related to
$1,831 following reasons:
1) $499.29 is associated with a sponsored by 2006

the Indigo in October 2009. When the hotel invoiced for meeting,
they mistakenly charged an additional $499.29. We notified the hotel about
overcharge. In August 2010, and deposited a from
In amount of$499.29. credited the 2006 award for this amount,
- 33
thereby completely eliminating the $499.29 overcharge. A copy of the check and
a printout of ledger are attached as 2a and 2b
remainder with "no

shows," participants who registered a meeting by did
not at the last due to or a medical condition. We
been able to identify two instances no-shows, totaling $705.90. we
the events surrounding two
. of a lastminute health
to
second case involved a participant who is partially

crutches to This individual was booked on a flight that up not having a seat
available to accommodate physical He was rebooked onto flight later
that same day, Because arrived at hotel very at night, the considered him a
"no show" and a no-show for his lodging that day, fact he was
Please see Exhibit 4.
As stated in "Unless a traveler can demonstrate exceptional

circumstances, GSA travel place responsibility no-
show room charges with traveler." two situations
as exceptional circumstances.
F'or the reasons cited above, EDC requests that the $1,831 in questioned costs be allowed.
======:.:..:::.::. Remedy the $111,381 in costs from

consultant
EDC Management Response: In EDC's judgment, all $111,381 in consultant costs

are allowable, supported, and well-documented. EDC the following m to
if the received are accurate processmg
- 34
When a consultant submits an invoice, EDC Project Director reviews it to determine It lS

consistent with the work consultant was engaged in. PDs and consultants are in constant
contact and the PO is always aware the work consultant is performing. If Project
the consultant completed the work in the invoice, or she
Financial Manager to forwards it to
Accounting department. EDe's Accounting checks
the funds on consultant's contract. If funds are not currently available,
the invoice is held and not processed until an amendment to the consultant's contract is fully
and in EDe's vendor consultant agreement ""f<"'Pt'Yl
Below we address each questioned consultant
2006 Grant:
• : questioned amollnt: $4,725. (a

consultant) to a draft MSIY products. completed
all three draft documents submitted documents were reviewed by
the EDC Project Director found completely Copies products were
provided to the auditors.
2007 Grant:
(mentioned below) is documented

implemented a customized
database amount of on each
the Project signing any
consultants are also paid to participate in weekly
services carried out and future ITA services to be
provided. For amount in for each of these consultants, we have attached
from the databases that detail the that the consultant performed prior to invoicing
EDC. of the EDC is confident that payments were
with has a system in place to
are accurate. However, the not be
to an auditor. We plan to modify our procedures so that in the it will
for an auditor to
: two questioned invoices total' in Exhibits 5 and 6 the

the that detail work during the period
• 7
work during the time In
question.
- 35
• questioned invoices 8,9 and 10

the documents from the database detail time period
• .50 . in Exhibits 10 11 the

work during the period in
• one uestioned invoice totaling $1,800.00. See in 12 the memo

from documenting his work the time period question.
: one questioned invoice~75. in Exhibit 13
document from the that ___ during the III
question. National Youth Project: one questioned totaling
$79,000. see Exhibits 1 15 and 16 which document the work out by the
NIYLP (in form of the subcontract agreement, NIYLP evaluations, and the
report.
In addition, on Draft Audit Report it states NIYLP was paid and
there "was no a signed contract." This is not true. The contract was fully
executed on 7,2009. was not the contract was signed
by both EDC has in place to ensure contractors are not paid before a
contract is fully signed. On 22,2010 auditors hard copy
a copy of EDC and
EDe requests, as a result of the documentation we have provided, that the $111,381 in
questioned consultant costs be considered allowable.
$991 unsupported costs
Management Response: EDC that all travel costs should be adequately supported
documented. $991 in travel costs were associated with round-trip automobile travel for
an employee between Minnesota Oklahoma an authorized visit. Prior to
the site visit, staff carried out a cost-benefit of the most method
making trip and that travelling by automobile rather by airplane would
result in a of over $600 for the 2006
Although the audit report states that travel costs were by a consultant, were, in
fact, incurred by an EDC employee. Also to clarify, 13 of the draft audit report states that
the travel costs were for "a 2007 award funding conference," but the travel costs were
actually the project of the 2006 (TYP) to travel to from an on site visit
to Ponca Tribe of Oklahoma, one of
Minnesota
and gnn.tTIr.> airport and
City (a two-hour roundtrip was $1,200 and cost of the car

rental the three-day visit was $420, in total costs of $1 by contrast,
the project director determined that driving her own car to and from the visit would cost
than $1,000 (in fact it cost $991). Thus, by driving over 1,700 miles flying, this
staff member 2006 more than $600. Please see the documentation of the visit
in Exhibit 17.
EDC that the $991 be considered allowable, supported costs.
======"'--= Ensure officials establish adequate internal controls for budget

management to include the design and implementation procedures that enable separate
identification and accounting each budget category In award, and allow for an
versus actual cost comparison.
EDC Management Response: report address

and control. strongly with the auditor's misunderstanding that the
maintained the were not applications to
OJP. EDC tracks its expenditures by approved OJP budget EDC monitors the
budget versus actual In we provided auditors with testimony and
confirming that EDC is compliant in both areas.
displays the exact same information as the OJP-approved budget but

format. When EDC an we upload
which allows for careful
this point, the detailed line
that appear in the OJJDP-approved budget
Supplies, Consultants/Contacts, Other Costs, Indirect Costs),
face meeting with the auditors in the of 10, we explained detail how the
corresponds to the OJJDP budget. Additionally, on April 10, 2010, provided
with an example in writing of how we roll-up detailed expenses from the accounting
system into OJJDP budget categories. Exhibit 18 shows a sample of the available and
the and rollup versions. Exhibit 19 is an email string evidencing the difficulty the auditors
had with reading spreadsheets into which the financial information was uploaded for
their review. data was and would be to information once
more, in person. to
Page 18 of audit implies that allows awardees to make changes to their budgets
without complying with the 10 approval requirement. is fully aware that OJJDP
requires prior approval before moving funds between approved budget in excess of 10
of the total award. Our project and accounting staff monitor OJJDP budgets with that
understanding; if a line item is overspent or several line items in a are the
project's Financial Manager reviews the entire roll-up to determine if is a to
contact OJJDP to request a budget modification. ensure compliance, the project's Financial
Manager reviews the budget with the Project Director once month.
- 37
Page 19 the audit report states never provided a

that we could reconcile to expenditures EDe's accounting "",,,,pm
incorrect. noted above, provided the auditors with a clear
how we monitor ongoing expenditures against the budget on April 1
EDe requests that this recommendation be removed and pages 18 and 19 be corrected.
Recommendation 6. Ensure EDe complies with aU of the Training and Technical

Assistance for Mentoring System Involved Youth grant awards' special conditions.
EDe Management Response: and 21 of the audit report state that EDC did
not comply with special conditions included in the 2006 (MSIY) grant award. EDC
disagrees with this we did comply with all of the MSIY special conditions. Below
we list each of the and how when met
EDe's application to OJJDP indicated that we would produce eight products with MSIY grant
three 12 bulletins ( 1 each), one describing
the of the 4 MSIY grantees and best system-involved youth,
and one inventory listing contact infolmation for U.S. programs that serve
involved youth. We delivered final copies (including an electronic copy) five the eight
products on or before June 15,2010 (the project was funded through June 30, 2010). Below we
describe the time line by which the remaining three products were completed:
• On April 21, 2010, we submitted text the third brief (on youth in foster
care) to the OJJDP Program Manager (PM) for review and comments. The final version of
brief was submitted to OJJDP on July 6,20 10-less than one week the conclusion of the
• One June 16,2010, we submitted the text for the mentoring monograph to the OJJDP PM.
The PM shared his feedback on the monograph with our on June 29, 2010. We submitted
the final version monograph to OJJDP on August] 0,2010.
• In our report submitted in July 2009, we included a document that
contained all ofthe text to be included in the mentoring inventory_ On September 29,2010, we
submitted the final version the inventory to OJJOP.
It is important to note although our application indicated we would only
we to our OJJDP PM that we would like to develop an additional brief
on mentoring youth reentering the community following detention. Our PM approved the
development this brief. We submitted the text to him on June 30, 2010, and the final version
of brief on July 2010, than one after the conclusion of the grant.
- 38
Thus, all eight required products-and one additional product-have heen completed and
submitted to OJJDP.
does not deviate from a project's approved timeline without prior approval from
funding agency, At point where a modification to the project's approved timeline was
needed, MSIY project staff telephoned the OJJDP PM and received approval before
moving ahead with any changes. always works closely with funders when it is
necessary to adjust a project timeline or amend scope and/or nature a project deliverable.
out and follow the Project at
response to audit recommendation #9 below, which addresses the same
OJJDP PM for review and comment

our response to Special Condition 1,
three bulletins, one monograph, and one
inventory that serve system-involved youth. We submitted products
to the OJJDP PM for his rp",pu[ and comment on the following
April ,2010: Submitted three draft briefs and three bulletins to the OJJDP PM
review and comment,
17,2010: Submitted monograph to OJJDP PM for and comment.
July 2009: In our semi-annual progress to OJJDP, we included a document that contained
all of the draft text to be included in mentoring inventory.
EDC met this special condition by submitting all the reports products to
OJJDP prior to publication.
- 39
Consolidated Federal Regulations 22 requires protection of confidentiality and privacy

in that involves youth. JJ'-',",U'';''''' MSIY collected no data on or about youth, Part
does not apply to our work.
OJJDP standards and technical providers appear in the 1998 publication

"Training, Technical Assistance, and Evaluation Protocols: A Primer for OJJDP Training and
Technical Assistance Providers." introduction to this document states:
"These protocols are intended to guide and contractors to develop protocols

OJJDP and as well as to provide training andlor
technical assistance. OJJDP further acknowledges that many and contractors have
already developed and implemented protocols in these areas. should be used to
assess protocols against professional best practice, which may enhance already established
protocols" (p.
10 EDC, an internationally renowned nonprofit and development has

as a training and technical assistance (TTA) provider in U.S. and internationally for
most of 50+ We currently operate dozens of national centers, many of which are
supported by Federal funding; we have served thousands of federally funded grantees that
operate at the local pioneer in the field, EDC has developed its own uniquely
approach to providing TT A, which is based on research and Our application to
OJJDP for the MSfY summarized approach for implementing the
approach. We have consulted OJJOP to np"~rrn
standards and protocols align with those of OJJDP. Not
protocols align spirit and specifics to those contained
EOC's TTA standards and practices exceed the expectations set forth in
Correction requested on page 21: The draft audit report states (on page 21): "We asked EDC
officials and OJP's Program to provide that complied with special
conditions noted above but we received no to our requests for information."
This statement is and we ask that it removed. The auditors for
documentation related only to the first fourth condition (related to MSIY publications
EDC provided this documentation a timely manner, but the auditors to
have overlooked documentation. At no did the auditors ask documentation
to the other four special conditions.
EDC requests that this recommendation be removed and pages 20 through 22 be corrected.
- 40
Recommendation 7. Remedy the $124, 971 in unallowable costs resulting from EDe's
drawdown of Tribal Youth Program Training and Technical grant funds during
a period of non-compliance with the award's special conditions.
EDe Management Response: clarify, the questioned drawdown was for Mentoring
Involved Youth award, not Tribal Youth Program award.
21 of the draft audit report states "In reviewing .~'''A''':A.l was required to
implementation plan (drawdowns).
we found that funding April 2009 even though OJP
a GAN removing all restrictions September 2009."
EDC's original Project Director for MSIY was terminally ill and eventually passed away in
2008. We cannot recreate what happened the Director's illness. When the new
Director took over she had a with the Program Officer to oriented to the
project was not told of any outstanding issues related to the plan. We were
unaware that the not met until notice was received 2009.
Although, did not submit an official GAN to OJJDP until September 2009,
provided the strategic plan to the Program Manager in July 2009 via email Exhibit 20) as
soon as we were told it was missing. In this email we Program Manager where he would
like us to upload the plan and we did not a response for some time. Even
we submitted the plan in July of2009, the recommendation is to disallow the entire
drawdown which includes August and which is the date we submitted plan
email. addition, during period in question (April through 2009),
staff were in communication with OJJDP about all of the project, including the
strategic implementation plan. No changes were made to project activities or the timeline
without explicit approval OJJDP. The recommendation to disallow $124,971 is
unreasonable and excessively punitive as costs were legitimately incurred out
required project tasks. it is determined that the funds were drawn too early, and without
cause, there should be an interest for were drawn too not a complete
disallowance of otherwise allowable costs which were reasonable, allocable and necessary to
the terms of the grant.
The recommendation to disallow the $124,971 in legitimate project costs is highly

disproportionate. EDe respectfully requests that the funds be considered allowabJe costs.
Recommendation 8. Ensure EDe officials develop internal control procedures to

adequately monitor the work performed by its consultants.
==-=-==~.:--'="-'-"-'==== EDC internal control are necessary

to monitor work performed by consultants. draft audit report states that "The
of an adequate and functioning internal control environment places award
funds at risk and the ability of the recipient to ensure that federal funds are being
- 41
adequately safeguarded and spent accurately properly in accordance objectives."

disagree with the implication that IS case at
provides project staff and managers with guidelines related to consultants

developing consultant In addition, the 2006 and 2007 OJJDP awards at
have numerous of this is evidenced
response to recommendation # 3 above.) Project both
not daily-contact with consultant, making them very well informed about
2007 award utilized most its consultants as technical
T ASs contact every they are
about contact with a
lJ"f'''',,~T Director reviews the T A U(.HM.lI''''''-'
follows up with the consultants as needed. addition, consultants meet
phone with EDC Project to grantee any challenges
to plan for future TTA
When a consultant submits an invoice, the Project Director reviews it to determine if it is

with In database about the consultant's work. When a consultant is
in additional activities facilitating or at a face-to-face
EDC Project is always to monitor the If the
Project Director that consultant has completed the work noted in invoice, he or
signs invoice forwards it to Accounting department. Before processing a
consultant invoice, EDC's Accounting staff check the funds on the consultant's
contract. If funds are not currently available, the invoice is held and not paid until an
to the consultant's contract is fully and updated consultant
system.
======~;;;..:. Ensure EDC officials design performance measures and collect to

achieve the Training and Technical Assistance Program for Monitoring System Involved
Youth program objectives.
EDC Management Response: performance measures for MSIY project were included
our original application to Tracking of measures for OJJDP grantees is
carried out through DCTA T (Data Collection and Technical Assistance system.
Unfortunately, DCT AT not contain any performance measures that are relevant training
and centers such as MSIY; it only contains measures appropriate for provide
direct services to youth.
the times period; at

it was not possible to enter performance by our
OJJDP PM, EDC outreach times to responsible for
measures to discuss performance measures should report on
and where we should report the Our outreach was to no the of performance
measures MSIY was never resolved.

until they met OJJDP's expectations for depth, breadth, scope, and
All relevant performance measures are already in place for MSIY. EDC had collected data
for the measures and reported the data in its progress reports to OJJDP. Thus, we request
that this recommendation be removed.
=..;;;...::;;.;====;..;..;;..;~
Ensure EDC completes each of its assigned deliverables and meets aU
of the objectives established by the Training and Technical Assistance Program for
Monitoring System Involved Youth award.
EDC Management Response: EDC has completed all of its assigned deliverables and has met
all. of the established the MSIY project. The audit report identifies (on
specific deliverables that the auditors did not meet. chart is not
correct. Our description of of these four deliverables is as follows:
======~~==_~~==~c====~~~========~,~==·
MSIY conducted six of the
T A visits by January 2010. we were planning the final two site visits (to OJJDP
<un...... '" in Portland, OR and Richmond, V A), we learned that the OJJDP-funded project
directors both grant sites been-or were about to be-laid off of budget shortfalls.
We with the OJJDP PM about the possibility conducting site visits with the
remaining OJJDP-funded staff at the two grant We with his assessment that such
site visits would accomplish little, only very junior were in place in both locations.
Thus, with the approval of OJJDP PM, did not conduct additional site beyond
the that were completed by January 201 O.
described in the
response to Recommendation 6, delivered three bulletins and two final briefs to OJJDP on
June 15,2010. We delivered the final third brief to OJJDP on July 6,201
the of MS IY project period. All six written products have
delivered to OJJDP.
by OJJDP. As described in our response to Recommendation 1,

replace multiple training for the four MSIY
with one large national meeting 100 mentoring practitioners not funded by OJJDP.
PM did not document this significant change in writing to EDC nor did inform us that we
should request a Grant Adjustment Notification complying with his instructions. EDC
staff followed the PM's directions and a contract with the hotel in New Orleans that
PM selected.
In March 2007, we were informed by OJJDP that a new PM had

several discussions with the new PM over the next months. new
- 44
PM conducted a two-day site visit to EDC to more about MSIY to the budget,
timelines, deliverables, etc. This meeting and several follow-up calls with new
PM over the next three months resulted in the following additional change to the MSIY meeting
deliverables: Instead of conducting the large national meeting that the PM had required or
the remaining small trainings" and two small regional meetings described in
EDC's application, would conduct two small working meetings for the four
OJJDP-funded MSIY to be held in the fall of2008 another in 2009.
As the OJJD P PM staff agreed at our meeting in December 2007,

working meetings involve many more than the small
and regional training events outlined EDC's application, fewer total events would be
conducted than delineated in EDe's application. expenses for the cross-site working
meetings remained in the travel line of our budget (where the expenses for the and
trainings had originally been included). Thus, we did not need to make changes to the
budget to accommodate the working no point did the second PM inform
that we to request that he create a GAN to finalize these changes to MSIY
noted the in our July 2008 report to
Therefore, the MSIY deliverables depicted in the chart on page 24 of the draft audit report
are out-of-date and inaccurate because they do not reflect the changes in deliverables that
were agreed upon with OJJDP in December 2007.EDC submits a semi-annual progress
report in outlining completed activities for proceeding period of These activities are always
discussed and agreed upon on an ongoing with the Program Manager. The Program
Manager then approves these reports in GMS which confirms Program Manager is aware
of the progress of the approved deliverables. The number and types of meetings that EDC
ultimately carried out were in complete accord with our agreements our second OJJDP
PM. Indeed, EDC has met all of the project's objectives and completed all project
deliverables.
We request that the text on and 25 revised to the facts stated above. In particular, we
take exception to the following four statements on pages and 25 and request that be
removed or significantly revised:
.. the deliverable schedule and they conducted one national conference
instead the two regional training sessions noted in the award implies that
made this change its own accord, without the approval OJJDP, which is not true.
• "[EDC] officials modified cross program to substitute two for five
required (page 24). this statement implies that did not have approval
modification, which is false.
"An official told us that they could not document the correspondence [re:
MSIY deliverables] because ... "The project's limited resources made it difficult to accomplish
program's objectives This statement is untrue is not something an
...."'.."'A" would have
could provide no documentary evidence to that OJJDP approved VISIt,
conference, or training schedule changes ... " As explained above, we secured the OJJDP PM's
verbal approval making any changes to project deliverables~~including the schedule of
- 45
conferences, and no point did either PM inform us that we to

request that they submit a GAN to to the project's deliverables.
Many of the inaccuracies and clarifications are addressed above. However there are some
sections of audit that should be corrected. We respectfully request that the audit
report modified to incorporate following clarifications or corrections:
Under and Recommendations, on page 7 of the audit it states

"budget controls were inadequate because EDC's accounting system
could not track award expenditures based on approved budget categories."
statement is EDC's Deltek Cost Point is a comprehensive, fully
and grant accounting system which allows
actual to budget at all levels and categories, including approved
categories. Please see Exhibit 18 for an example vs. budget
the system.
Under Internal Control the report states identified

in some the areas we "EDC officials told us they believed
an adequate system internal controls was in place and ofTered no further
explanation." It is inaccurate to state that EDC officials offered no further
explanation. provided the auditors with significant amount and
procedures which make up its Internal Control System. disagrees with the
specific findings the internal control mentioned in the audit report
and addressed the to recommendations
2 11, paragraph: neither EDC nor OJP provided an explanation

to support original commitment for such a large amount of award funding or for
the food and beverage expenditures we at succeeding
conference in New Orleans." multiple points the EDC staff
provided the auditors verbal explanations of-and written documentation
supporting-the costs associated with meetings conducted at the Monteleone
New Orleans. This issue is under to #1.
that this statement
3 12 and 13 of the contain depictions practices

regarding consultant monitoring payment, including a statement that reimburses
consultants who have insufficiently documented work performed or not completed
the work they were to do. All of these statements are incorrect The supporting
- 46
evidence is provided under to Recommendation #3. this section

be removed accordingly.
4 that did not complete four

mour to Recommendation 10 below
the audit report" .... they did not complete a assessment to rI",l''''r.YI
unique needs prior to completing TAP". This is incorrect. completed a
assessment of of the four MSIY in December 2006 and submitted it to
OJJOP PM at that time. Exhibit 21 Site
possible that current PM is unaware
completed before he was correct
6 were [by that should have provided sites with the

required to establish mentoring Moreover, VISIt
did not provide new information about of four mentoring sites that would help
sites address their mentoring The OJJDP official focused on
a more national or global approach to mentoring when should have focused on
sites identified the " statements are the MSIY site visit
reports (see 22 Sample MSIY Visit Reports), at every visit, MSIY
staff provided four with abundant new information and to help them
establish and improve their And, as reflected above in EDC's desire to conduct
training events for the four grantees rather than for a national audience-which was directed
by OJJDP's first PM-the MSIY staffs uppermost concern and have always
to supporting the four MSIY by OJJDP.
We detailed review by the auditors understand nature some

their findings recommendations. However it is critical that the misunderstandings and
inaccurate conclusions contained in the draft be corrected. For more than 50 years,
has known as a responsible partner with federal government, a partner that always
meets-and customarily expectations.
47
APPENDIX IV
OFFICE OF JUSTICE PROGRAMS
RESPONSE TO THE DRAFT AUDIT REPORT
U.S. Department of J ustice
Office ofJustice Programs
Office ofAudit, Assessment, and Management
Washington , D. C 2053 1
October 28, 2010
MEMORANDUM TO : Thomas o. Puerzer

Regional Audit Manager
Office of the Inspector General
Philadelphia Regional Audit Office
/s/
FROM: Maureen A. Henneberg
Director
SUBJECT: Response to the Draft Audit Report, Office of Justice Programs, Office of
Juvenile Justice and Delinquency Prevention Awards to the Education
Development Center, Inc., Newton, MA
This memorandum is in response to your correspondence, dated September 30, 2010,

transmitting the subject draft audit report for the Education Development Center, Inc. (EDC).
We consider the subject report resolved and request written acceptance of this action from
your office.
The report contains 10 recommendations and $286,698 in questioned costs. The following is
the Office of Justice Programs' (OJP) analysis of the draft audit report recommendations . For
ease of review, the recommendations are restated in bold and are followed by our response.
1. We recommend that OJP remedy the $46,149 in questioned costs resulting from
unallowable conference food and beverage expenditures.
- 48
We with recommendation. We will coordinate with EOC to remedy the

$46,149 in questioned costs resulting from unallowable food and
expenditures.
unallowable conference lodging charges.
We agree with recommendation. We will coordinate with EOC to remedy the

in questioned costs resulting from unallowable conference lodging
unsupported consultant charges.
We agree with the recommendation. We will coordinate with EOC to remedy the
$111,381 in costs resulting from unsupported consultant
4. We recommend that OJP remedy the $991 in unsupported travel costs and the $1,375
in unallowable costs for miscellaneous expenditures.
We agree with the recommendation. We will coordinate with EOC to remedy the $991
in unsupported travel costs and the $ in unallowable costs for other miscellaneous
res.
5. We recommend that OJP ensure Eoe officials establish adequate internal controls for
budget management to include the design and implementation of procedures that
enable identification accounting for each budget category described in
the award, and allow for an ongoing budget versus actual cost comparison.
We agree with the recommendation. We will coordinate with to obtain a copy of

implemented procedures to ensure that establish
controls for budget management to include the design and implementation of
- 49
procedures that enable separate identification and accounting for each budget
described in the award, and allow for an ongoing budget versus cost comparison.
6. We recommend that OJP ensure EDC complies with all of the Training and Technical
Assistance Program for Monitoring System Involved Youth grant award's special
conditions.
We agree with the recommendation. We will coordinate with EDC to obtain a copy of
implemented procedures to ensure that complies with all of the Training and
Program for Monitoring Involved Youth award's
special conditions.
7. We recommend that OJP remedy the $124,971 in unallowable costs resulting from
EDC's drawdown of Tribal Youth Program Training and grant
funds during a period of non-compliance with the award's special conditions.
We agree with recommendation. We will coordinate with EDC to remedy the

$124,971 in unallowable costs resulting from EDC's drawdown of Tribal Youth Program
Training and Technical Assistance grant funds during a period of non-compliance with
the special conditions.
8. We recommend that OJP ensure EDC officials develop internal control procedures to
adequately monitor the work performed by its consultants.
We agree with the recommendation. We will coordinate with EDC to obtain a copy of
implemented procedures to ensure that EDC officials adequately monitor the work
performed by its consultants.
We recommend that OJP ensure EDC officials design performance measures and
collect to achieve the Training and Technical Program for Monitoring
System Involved Youth program objectives.
- 50
We agree with the recommendation. We will coordinate with EDe to obtain a copy of
implemented procedures to ensure that EDe officials design performance measures
collect to Training and Technical Program for Monitoring
System Involved Youth program objectives.
10. We recommend that OJP ensure EDC completes of its deliverables

meets all of the objectives established by the Training and Technical Assistance
We agree with the recommendation. We will coordinate with EDe to obtain a copy of
implemented procedures to ensure that completes of its
and meets all ofthe objectives established by the Training and Technical Assistance
We appreciate opportunity to review and comment on draft audit If you have

any questions or require additional information} please contact Jeffery A. Haley, Deputy
Audit and Review Division, on (202)
cc: Jeffery A. Haley

Deputy Director, Audit and Review Division
of Audit, and Management
Jeffrey W. Siowikowski
Acting Administrator
Office of Juvenile Justice and Delinquency Prevention
Marilyn Roberts
Deputy Administrator
Eric Stansbury
Program Manager
- 51
cc: Laura Ansera

Program Manager
Office of Juvenile and Delinquency
Richard P. Theis
Audit Liaison Group

Justice Management Division
OJP Executive Secretariat

Control Number 20101958
- 52
APPENDIX V
OIG, AUDIT DIVISION, ANALYSIS AND SUMMARY OF ACTIONS
NECESSARY TO CLOSE THE REPORT
We p the d report to Educational lopment Center

(EDC) and the Office of Justice rams (OJP) for review and comment.
response i uded as Appendix III this a OJP's
is included as Appendix IV.
Analysis of EDC and OlP Responses
EDC disag with all 10 recommendations and also

req sections of the audit report be removed or amended use
of inaccu and necessary rifications. req that we:
(1) delete food and beverage tables in report because they were
i (2) remove or findi from report because they
were based on misunderstandings and inaccurate conclusions, and
(3) remove or reduce questioned for grant-fu itures that
were identified as unallowable and unsupported. In addition, EDC
said that a recurring theme the report was that did not
approvals from the Office of Juveni Justice and Delinquency
Prevention (OJJDP) within OJP. The response further stated EDC
did prior OJJDP approvals, although not a in writi and that it
did follow the proper protocol and maintained close and frequent contact
with OJJDP.
We reviewed and fully considered each of the issues by in

its response to our report. conducting our analysis, we determined
report was ally accurate a the were clearly
without the need for any cha to final except for ree ed
Specifically, on 12 the I report, we "unallowable alcoholic
beverage charges" clarify that one of the unallowa cha was
to alcohol served a grant-funded meal. On page 13, we changed
consultant to employee to that an EDC employee, not a consultant,
incurred unsupported while travelli to a grant-funded ng.
on page we recommendation number 7 to refer the
Monitoring System Involved Youth grant.
response to our report, OJP

consider all 10 recommendations on P'S
status and actions necessary close recommendation, along with a
discussion the from and are provided below.
- 53
1. Resolved. Remedy the $46,149 in questioned resulting from

unallowa conference food and beverage expenditures.
In response, EDC that we modify our rted food and

expenditures for three primary reasons: (1) use of EDC's
knowledge of n culture that officia to
procure higher low-fat and low-sugar foods, particularly for breakfast
and between meeting brea (2) use OJJDP ram Ma
di officia conduct conferences that far exceeded OJP's own
rds for food and beverage expenditu and
(3) use we incorrectly calculated food and beverage
expenditures.
During our fieldwork and follow-up discussions, we found no evidence

uested an to OJP's blished food and beverage
standa The do not, and in our judgment should not,
blish meal based upon race or nic background. Any
exception OJP nda food and beverage itures would
require that have prior written approval from the responsi OJ]
Program Ma and that approval documentation should be ily
availa for our review.
EDC noted in its response that the excessive conference food and
beverage nd res resu from guidance provided by OJJDP
. However, during our audit, officia provided no evidence to
document its m, such as Grant Adjustment (GAN), e-mails, or
letters demonstrating OJJDP's involvement. Throughout our audit, EDC
Is repeatedly aSSigned responsibility to DP Program Managers
when questioned about I of noncompl nce with grant
terms and conditions. Moreover, we interviewed OJJDP program officia
and did not support EDC's position and, as in our report, no
documentary evidence was provided to us va that OJJDP Is
directed or approved EDC's decision allowable food a
beverage ndards.
EDC also stated in its response that our food and beverage calculations
were incorrect. this, provided an example a
conference held at r location in Newton, Massachusetts, where EDC
uded th our calculations were incorrect because we undervalued
allowa meal costs, thus increaSing our reported questioned
costs. We com red our food and calculations to the
calculations EDC provided to us. We confirmed our calculations were
correct. We found EDC's food and beverage calcu were not rr..· ... o'~t"
because EDC calculated food and beverage expenditures based upon the
54
full I and Incidental Expense (M&IE) for Newton,

Massachusetts. However, footnote 7 of our report rly states that the
General Administration (GSA) al approximately 9
of a location's full M&IE incidental Therefore l we based our
per meal calculations on the M&IE rate approximately 9 for
incidental further that we incorrectly
conference participation rates and we incorrectly included
costs in our calculations. We num of co
rticipa on provided to us by EDC and, wherever possible, we
verified number of rticipa to conference hotel pts for both
the number of mea pu and the number rooms provided.
Additionally, OJP nancial Guide considers expenditures such as
rges and meeting room up as pa of the food and
expenditure.
In its response, OJP agreed with our recommendation and said that it will
coordi with EDC remedy the $46,149 in unallowa conference
food and beverage expenditures.
Th recommendation is resolved based on OJ concurrence and

agreement to coordinate with EDC to remedy the unallowable conference
food a beverage expenditures. recommendation can be
when we receive documentation demonstrati that OJP has remedied
$46,149 in unallowable expenditures.
2. Resolved. Remedy the $1 1 in questioned ,",U ...H .. J resulting from

unallowable conference hotel cha
In its response, EDC said they have collected overcha fees we

identified during our fieldwork a provi an expla documenti
exceptiona I rcu nces two of the no-show cha we identified in
our report.
the time of our audit, EDC officials were unaware the hotel
overcha paid with grant fun . From our we found
at five conferences that included grant no-show charges or unallowable
hotel rges id with grant funds. At three grant-funded
conferences in Minneapolis, Minnesota (July 2008), New Orlea
isiana (April 2008), and Squamish, Washington ( ruary 2008), we
fou evidence of no-show room charges totaling $694. Because we
found alcoholic rges included in the hotel charges a fourth
conference in New nSf Louisiana (December 2006), we questioned
$137 in grant expenditures. a fifth co in Newton,
Massachusetts (Novem 2009), we found a $1,000 unsupported hotel
- 55
bill. However, in response E officials onstrated th it

recovered $499 in hotel overcha and provided support the
remammg 1 of unsupported $1,000 hotel bill. Officia also
provided an explanation to document exceptional circumstances for
no-show room cha at a in Los les, lifornia.
However, we did not the Angeles conference. Therefore, $831 of
our questioned for unallowable charges four
remains unallowable.
In its response, OJP with our recommendation and said that it will
coordi with to remedy the $1 1 in unallowable conference
hotel cha
recommendation resolved on OJP's concurrence and

reement to coordi with EDC to remedy the unallowable conference
ng expenditures. is recommendation can closed when we
documentation ng that OJP has remedied the
remaining $831 in unallowable expenditures.
3. Resolved. Remedy $111 / 381 in questioned costs resulting from

unsupported consultant cha
In EDC it bel consulta costs are allowable,

supported, and well documented. However, EDC also acknowledged that
it plans modify its procedures to allow for reconciliation of
consulta charges.
The response provided a detailed lanation of the procedures in

place were used monitor work
consultants. To support one consu nt we questioned ling
$79,000, provided a contract with a start date on July 1/ 2009.
However, we determined the was u I October 9,
2009. Moreover, we found that the consultant invoiced EDC for the full
amount of the contract on ber, 09, more than a week before
the contract had been executed. We found no evidence to demonstrate
provided ght of the consu nt's work, nor did we find any
mention in progress report document the project the consultant
worked on. we note in our report, we found the remaining $3 381 in
questioned consultant cha to supported by only a short and
incompl nce did not uately document work
performed.
OJP ag with our recommendation and said it will

remedy $111,381 in questioned
from unsupported consu nt cha
Th recomm n is based on OJP's concurrence and

reement coordinate with EDC to remedy the $111 1 in questioned
costs resulting from unsupported consultant Th
recommendation can closed when we docu
demonstrating OJP has rem ied the $111,381 in unsupported
4. Resolved. Remedy $991 in unsupported costs and the $1,

in unallowable costs other m laneous expenditures.
In its response, EDC said that before incurring travel costs associated
with the gra nded trip in question, it ucted a analysis
to ensure the most method for making the trip.
docu the sup benefit analysis, EDC provided a
requ for nce from American group uesting
not a iled cost analysis. Additionally, the EDC
was silent on $1,3 in unallowable costs for other miscellaneous
expenditures.
At the time of our audit fieldwork, EDC could not provide a cost
analysis to us. cost analysis E provided with its
that it conducted the analysis. The support for
the ana included with the EDC response was a request for
from a Native American group included no evidence to
Moreover, docu provid us during fieldwork
the costs incurred by employee were to be
offset a sa ry advance.
reed with our recommendation and said that it will

coordinate with E remedy $991 in unsupported travel costs a
the $1,375 in unallowable m Ilaneous nditures.
This recommendation concurrence and

ag to coordi with E remedy $991 in unsupported
travel costs and $1,375 in unallowable laneous expenditures.
Th recommendation can when we receive documentation
demonstrati that OJP remedied $991 in unsupported
and the $1, in unal ble expenditures.
- 57
5. Resolved. adequate i I controls

ma n and implementation of
procedures enable identification and accounting for each
budget described in the award, and allow for an ongoing budget
versus I cost comparison.
In its EDC disag with our assessment r budget

management procedures. E lieved their budget management
OJP standa but they acknowledge it does SOl'" ..
htly different format."
position, EDC inclu with its of e-mai

on April 12, 2010, and which describe the d we
encou reconciling the provided to us. However, the series of
e-mails continued until April 14, 2010. In our last e-mail to EDC we
ackn opening the b ments provided us. We found
that documented bud not equal OJP's a budgets,
and I expenditure d not reconcile budget or
other iture data provided us in support ncial Status
Reports submitted by EDC.
agreed with our recommendation. Th

recom is resolved on OJP's concurrence agreement
to work with EDC to ensure it blishes appropriate
management controls. The controls should include
im of procedures enab separate
accounti for each budget category described in the award. The revised
budget should allow budget versus I
recom can be closed we
demonstrating developed and implemented
management
6. Resolved. Ensure that EDC compl with all of the ining and
Technical Assistance Program Monitoring System Involved Youth grant
award I conditions.
In its EDC said that it did comply with all gra required
special In add said it was never by us for
information to four I conditions we in the
report.
EDC's noted that it com some of I conditions

months our audit fieldwork was completed. to special
condition number two, that ui all deviations from project's
REDACTED - BLIC RELEASE
DACTED - FOR PUBLIC RELEASE
approved timeline to have prior OJJDP approval, E said it

OJ] lover the telephone, but EDC provided no documentary
support their claim.
E said in response that the audit team never provided it with

I conditions that were cited as incom
m provided copies of the incomplete special conditions
duri fieldwork and e-mai
Program Manager.
claim
lIy use EDC officia
support r im that the special conditions were
mod our finding.
reed with our recommendation.

is resolved based on OJP's concurrence and
with EDC to ensure it compl with all of ining and
nce Program for Monitoring Youth grant
I conditions. This recommendation can when we
mentation demonstrating that EDC com with all grant
award I conditions.
7. Resolved. Remedy the $124,971 in unallowable resulting from

drawdown of Tribal Youth Program Training and n I
nce grant funds during a period of non-compl nce with the
I conditions.
said that a personnel ca some confusion

funding restrictions placed on the gra award by OJJDP.
that it grant to the
removal
OJP agreed with our recom and said it will

with to remedy the $1 1 in unallowa costs
from non-compliance with awa I conditions.
recommendation is resolved based on OJ concurrence and

coordinate with EDC to remedy $1 1 in
unallowable costs resulting from EDC's drawdown of grant funds during a
non-compl nce with the award I conditions. This
recommendation can be closed when we documentation
ng that OJP has remedied the $1 1 in unallowable costs.
- 59
8. Resolved. Ensure EDC officia develop internal control ures to

uately monitor the by its consu
response, EDC ures for monitori consulta

work. However, as we in our report and based on what we
encountered during our fieldwork, we found that EDC officia provided
I or no oversight of work consultants performed.
OJP response agreed with our recommendation. Th

recommendation is resolved on OJP's concurrence and reement
coordinate with EDC ensure that EDC officials adeq monitor
work performed by consu nts. This recommendation can be
when we receive documentation demonstrating that E
ures monitor consultant work.
9. Resolved. Ensure EDC design performance measures and collect

d ieve the ini and I Assistance
itoring System Involved Youth (MSIY) program
In response, EDC said that it MSIY's stated program

E noted that in their view OJJDP performance measu
m was not compatible with the grant's objectives and
provided adequate performance measures in their period progress
of our fieldwork, Is were unable provide

performance measu required as a of
ng the grant award. said, as part of that it
guidance from rding the
measurements to report and where to report them. EDC did
not provide any docu ry evidence to support
OJJDP Program Ma told us that although
progress reports, OJJDP was not satisfied with
use it did not properly support the four mentoring
grant funding.
OJP response ag
recommendation on OJP's concurrence and agreement
coordinate with ensure that EDC officials n performance
measures and col ieve ini I
nce Program System Involved Youth program
This recom can be closed we
- 60 -
REDACrED - fOR PUBLIC
documentation demonstrating that EDC developed and implemented

procedures designed to ensure grant objectives are achieved.
10. Resolved. Ensure EDC completes each of its assigned deliverables and
meets all of the objectives established by the Training and Technical
Assistance Program for Monitoring System Involved Youth award.
In its response, EDC said that it completed all of their assigned

deliverables and met all of the objectives established for the MSIY
project. EDC said its response was supported by a meeting it had with
OJJDP in December 2007 when the deliverables for the project were
changed.
At the time of our fieldwork, EDC officials were unable to provide any
evidence to support its claim that the deliverables for the project had
changed. Moreover, EDC's response to the draft report included no
evidence to support changes to the deliverables. As previously noted, the
OJJDP Program Manager was not satisfied with EDC's performance
because it did not properly support the four mentoring sites. Because the
Program Manager did not support EDC's claim that the deliverables were
changed and EDC provided no evidence to support its claim of program
changes, we did not modify our finding.
The OJP response agreed with our recommendation. This

recommendation is resolved based on OJP's concurrence and agreement
to coordinate with EDC to ensure that EDC completes each of its assigned
deliverables and meets all of the objectives established by the Training
and Technical Assistance Program for Monitoring System Involved Youth
award. This recommendation can be closed when we receive
documentation demonstrating that EDC developed and implemented
procedures designed to ensure all deliverables have been completed.
- 61

Audit of The Office of Justice Programs Office of Juvenile Justice and Delinquency Prevention Awards To The Education Development Center, Inc., Newton, Massachusetts

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Audit of The Office of Justice Programs Office of Juvenile Justice and Delinquency Prevention Awards To The Education Development Center, Inc., Newton, Massachusetts

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