Dr. Felipe Alanis

Commissioner of Education

Texas Education Agency

William B. Travis Building

1701 North Congress Avenue

Austin, Texas 78701-1494

Dear Dr. Alanis:

This **Final Audit Report** (Control Number ED-OIG/A06-C0030) presents
the results of our audit of the Migrant Education Program at the Texas
Education Agency (TEA). The objectives of our audit were to determine
whether TEA and its sub-grantees (1) established and implemented
appropriate procedures to identify and target services to migratory
children who are failing or most at risk of failing to meet state
standards and whose education has been interrupted during the regular
school year, and (2) established procedures to report to the Department
the number of "Priority for Services" migratory children in Texas. Our
audit focused on the period July 1, 2000, through July 31, 2002.

A draft to this report was provided to the Texas Education Agency. In
its response, Texas concurred with our recommendations. Texas' comments
are summarized in the section that follows the Recommendations. A copy
of the complete response is enclosed with this report.

The Elementary and Secondary Education Act (ESEA) of 1965, as amended,
authorizes federal funding of programs of education for migratory
children. In Fiscal Year 2001, Texas received approximately \$53 million
in Migrant Education Program funds. A migratory child is a child who is,
or whose parent, spouse, or guardian is, a migratory agricultural
worker, including a migratory dairy worker or a migratory fisher. The No
Child Left Behind Act of 2001 and the Improving America's Schools Act of
1994 further specify that children who are failing, or most at risk of
failing, to meet the State\'s challenging content standards and
challenging student performance standards, and whose education has been
interrupted during the regular school year shall receive "Priority for
Services."

In Texas, students who meet the definition of failing, or most at risk
of failing, can be identified using several factors---students who are
not passing the state assessment, failing or making low grades, or have
been retained in the same grade more than one year. An interruption of
education is defined as a student moving from one school to another
during the regular school year. Priority for Services means students who
meet both criteria will receive Migrant Education Program funded
services before services are provided to other migratory children.

Table C-6 of the Consolidated State Performance Report, which is
submitted to the Department's Office of Migrant Education for every
award year, requires that States indicate the "count of students served
who have a priority for services under Section 1304 (d) of the ESEA
(those whose schooling has been interrupted and who are failing or at
risk of failing to meet state standards)."

On November 26, 2002, the Department issued final regulations for the No
Child Left Behind Act of 2001 governing the Migrant Education Program
to, among other changes, require that each State Education Agency
determine the effectiveness of its program, particularly for those
students who have Priority for Services. These regulations are in
response to the *President's Management Agenda* for Fiscal Year 2002 and
the Department of Education's *Blueprint For Management Excellence*
released October 30, 2001. One of the expected long-term results in the
*President's Management Agenda* is better control over resources used
and accountability for results by program managers. The Department's
*Blueprint* describes one of the Department's commitments to management
improvement as achieving an "Accountability for Results" culture.
Through the *Blueprint,* the recipients of Department funds will be held
responsible for their performance in relation to the goals and
objectives.

TEA did not comply with Section 1304(d) of the Elementary and Secondary
Education Act of 1965, as amended. Specifically, TEA did not establish
and implement appropriate procedures to identify and target Priority for
Services to migratory children who are failing, or most at risk of
failing, to meet State standards, and whose education was interrupted
during the regular school year. As a result, TEA's procedures did not
provide assurance that migrant education funds were allocated to
sub-grantees based on the school's population of migratory students with
Priority for Services; TEA was unable to report the number of Priority
for Services migratory children served in the Consolidated State
Performance Report to the Department's Office of Migrant Education; and
the U.S. Department of Education was unable to determine if Texas used
the \$53 million in Migrant Education Program funds it received for
Fiscal Year 2001 for Priority for Services migratory children before
providing services to other migratory children.

TEA migrant education funding allocation procedures to its sub-grantees
were not based on identified Priority for Services migratory children to
be served. TEA provided additional migrant education funds to
sub-grantees for migratory students who were overage students in grades
7 through 12 and additional funds for migratory children with a
qualified migratory move during the preceding 12 months. TEA did not
require that migratory students meet both Priority for Services criteria
in order for the sub-grantee to receive additional migrant education
funding.

Even though TEA funding decisions were not based on accurate
identification of the Priority for Services children, we visited four
sub-grantees and found that three of the four had procedures in place to
properly identify and target migratory children for Priority for
Services. Two sub-grantees used state test scores and an interruption in
the child's education during the preceding 12 months to identify
students as Priority for Services. Another sub-grantee reviewed the most
recent mobile report (moved in the last 12 months) and also considered
those students' grades. The fourth sub-grantee only used the most recent
mobile report to identify migratory students for Priority for Services.

Additionally, we found that neither TEA nor its sub-grantees established
procedures to report to the Department the number of Priority for
Services migratory children in Texas. Table C-6 of the Consolidated
State Performance Report, which is submitted to the Department's Office
of Migrant Education for every award year, requires that States indicate
the "count of students served who have a priority for services under
Section 1304 (d) of the ESEA (those whose schooling has been interrupted
and who are failing or at risk of failing to meet state standards)." In
its most recent Consolidated State Performance Report, TEA reported to
the Department that, "this count is not collected at the state level by
the MEP (Migrant Education Program) and therefore cannot be submitted.
Migrant funded districts are required to collect and maintain this data
at the local level for program planning purposes."

These conditions occurred because TEA (1) relied upon its sub-grantees'
assurances that they were providing services to Priority for Services
children first before other migratory children, and did not perform
independent monitoring of the sub-grantees to ensure services were
provided; (2) did not provide clear guidance to the sub-grantees as to
the definition of at risk of failing State standards and whose education
has been interrupted during the regular school year; and (3) did not
require the schools, school districts, or sub-grantees to report the
number of Priority for Services migratory students for 2000 and 2001.
Although TEA required the sub-grantees to maintain this information for
program planning purposes, they did not require the sub-grantees to
submit the information. We also determined that the sub-grantees did not
maintain the detailed information on the number of Priority for Services
migratory children. Neither TEA nor sub-grantees could obtain this
information from any individual source in a manner that would avoid
possible duplicate student counts.

We recommend that the Assistant Secretary for the Office of Elementary
and Secondary Education require TEA to:

1.1 Monitor sub-grantees to ensure funds are used for Priority for
Services migratory children before funds are used for other migratory
children.

2.  Provide a clear definition to all sub-grantees of what constitutes
    at risk of failing State standards and whose education has been
    interrupted during the regular school year.

3.  Establish procedures to identify and report to the Department the
    number of Priority for Services migratory children served in Texas
    schools.

Texas officials agreed with our findings and recommendations. They
stated that the report identifies areas of improvement and that they
will diligently pursue implementing the recommendations.

The objectives of our audit were to determine whether TEA and its
sub-grantees (1) established and implemented appropriate procedures to
identify and target services to migratory children who are failing or
most at risk of failing to meet state standards and whose education has
been interrupted during the regular school year, and (2) established
procedures to report to the Department the number of Priority for
Services migratory children in Texas.

To accomplish our objectives, we:

-   Reviewed TEA's and its sub-grantees' policies and procedures for
    providing services to migratory children.

-   Interviewed TEA and sub-grantee officials regarding their procedures
    for providing Priority for Services to migratory children.

-   Reviewed the Texas State Single Audit Report for 2001 and other
    reviews performed.

-   Reviewed applicable laws, regulations, and other guidance.

-   Reviewed the sub-grantees' documentation regarding the Priority for
    Services provided to migratory children.

-   Reviewed TEA's and the sub-grantees' decision-making process for
    allocating migrant education funds.

Computer-processed data from the Department of Education's Office of
Migrant Education was used to select Texas to visit. Computer-processed
data was also obtained from TEA and analyzed for sub-grantees to visit.
This information was not used for projection, or to make any
determinations. There was no need for a reliability assessment of the
computer-processed data.

Our audit of Texas' Migrant Education Program covered the period July 1,
2000, through July 31, 2002. We performed on-site fieldwork from July
15-19, 2002, at TEA's office in Austin, and at four sub-grantees from
July 26-31, 2002. We selected two of the largest sub-grantees in Texas
at the request of the Office of Migrant Education. We also selected two
other sub-grantees in the Dallas area. The sub-grantees visited were
Region X Educational Service Center, Richardson, Texas; Dallas
Independent School District; Weslaco Independent School District; and
Brownsville Independent School District. We discussed our results with
Texas officials on July 19, 2002, and September 10, 2002. An exit
conference was held with Texas officials on October 16, 2002. Our work
was performed in accordance with generally accepted government auditing
standards appropriate to the scope of the audit described above.

As part of our review, we assessed the system of management controls,
policies, procedures, and practices applicable to TEA's administration
of the Priority for Services portion of the Migrant Education Program.
Our assessment was performed to determine whether TEA had management
controls established to ensure Priority for Services migratory children
received services before services were provided to other migratory
children.

Because of inherent limitations, a study and evaluation made for the
limited purpose described above would not necessarily disclose all
material weaknesses in the management controls. However, our assessment
disclosed that TEA had not developed and implemented written procedures
to ensure that sub-grantees identified, targeted, and counted migratory
children that should be served first through the Migrant Education
Program. As a result, we concluded that TEA did not have sufficient
management controls to ensure that sub-grantees complied with the
requirements of Section 1304(d) of the Elementary and Secondary
Education Act of 1965, as amended. The AUDIT RESULTS section of the
report provides details on our finding.

If you have any additional comments or information that you believe may
have a bearing on the resolution of this audit, you should send them
directly to the following U.S. Department of Education official, who
will consider them before taking final Departmental action on the audit:

U.S. Department of Education

Office of Elementary and Secondary Education

400 Maryland Avenue, SW

Room 3W315, FB6 Building

Washington, D.C. 20202

Office of Management and Budget Circular A-50 directs Federal agencies
to expedite the resolution of audits by initiating timely action on the
findings and recommendations contained therein. Therefore, we request
receipt of your comments within 30 days.

In accordance with the Freedom of Information Act (5 U.S.C. §552),
reports issued by the Office of Inspector General are available, if
requested, to members of the press and general public to the extent
information contained therein is not subject to exemptions in the Act.

If you have any questions or wish to discuss the contents of this
report, please contact me at 214-880-3031. Please refer to the control
number in all correspondence related to this report.

Sincerely,

Sherri L. Demmel

Regional Inspector General

for Audit Services

Attachment

**REPORT DISTRIBUTION LIST**

**CONTROL NO. ED-OIG/A06-C0030**

**[Auditee]{.underline} [ED Action Official]{.underline}**

Dr. Felipe Alanis Assistant Secretary

Commissioner of Education Office of Elementary and

Texas Education Agency Secondary Education

William B. Travis Building

1701 North Congress Avenue

Austin, Texas 78701-1494

**[Other ED Officials/Staff]{.underline}** (electronic copy)

Delores Warner

Audit Liaison Officer

Philip H. Rosenfelt

Office of General Counsel

William D. Hansen

Deputy Secretary

John Danielson

Chief of Staff

Eugene Hickok

Under Secretary

John Gibbons

Director, Communications

Jack Martin

Chief Financial Officer

Clay Boothby, Acting DAS

Legislation and Congressional Affairs

Laurie M. Rich, AS

Intergovernmental and Interagency Affairs

Michelle Douglas and Carolyn Adams

OGC (Correspondence Control)

L'Wanda Rosemond

General Operations Team, OIG

Charles Miller

Post Audit Group, OCFO

Headquarters and Regional Audit Managers