DISTRICT OF 

COLUMBIA 

OPPORTUNITY 

SCHOLARSHIP 

PROGRAM

Actions Needed to 

Address Weaknesses 

in Administration and 

Oversight

Report to the Chairman, Subcommittee 

on Financial Services and General 

Government, Committee on 

Appropriations, U.S. Senate

September 2013

GAO-13-805

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-805, a report to the 

Chairman, Subcommittee on Financial 

Services and General Government, 

Committee on Appropriations, U. S. Senate

September 2013

DISTRICT OF COLUMBIA OPPORTUNITY 

SCHOLARSHIP PROGRAM

Actions Needed to Address Weaknesses in 

Administration and Oversight

Why GAO Did This Study

School vouchers, a school choice 

program designed to provide students 

with public funds to attend private 

schools, feature prominently in policy 

discussions about education reform. 

The OSP was reauthorized by 

Congress in 2011 by the Scholarships 

for Opportunity and Results Act, and 

has garnered national attention as the 

first federally-funded voucher program. 

Since the program’s inception in 2004, 

Congress has provided almost $152 

million for the program benefitting 

almost 5,000 students, currently 

providing scholarships of about $8,000 

for grades K-8 and about $12,000 for 

grades 9-12. As requested, GAO

examined (1) the extent to which the 

Trust provides information that enables 

families to make informed school 

choices, (2) whether the Trust’s 

internal controls ensure accountability 

for OSP, and (3) how Education and 

District agencies responsible for 

overseeing OSP have performed their 

stated roles and responsibilities.

To conduct this work, GAO visited 10 

participating schools; interviewed 

school officials; conducted discussion 

groups with 14 parents of scholarship 

students; analyzed key program 

documents; reviewed generally 

accepted guiding documents for 

internal controls; and interviewed 

officials at Education, relevant District 

agencies, and the Trust. 

What GAO Recommends

GAO is making 10 recommendations 

to Education to improve OSP, such as 

ensuring that the Trust publishes a

more complete school directory and 

updates key aspects of its policies and 

procedures. Education did not indicate 

agreement or disagreement with our 

recommendations. The Trust 

disagreed with some findings and both

provided additional information.

What GAO Found

The DC Children and Youth Investment Trust Corporation (the Trust) provides 

information to prospective and current families of children participating in the 

District of Columbia (the District) Opportunity Scholarship Program (OSP) 

through a variety of outreach activities. To reach prospective OSP families, the 

Trust advertises through print, radio, and bus ads, as well as in newspapers and 

flyers posted in neighborhood libraries, recreation centers, and local government 

service centers. However, the Trust provides incomplete and untimely 

information about participating schools to OSP families. The participating school 

directory, which is published by the Trust, lacks key information about tuition, 

fees, and accreditation. The Trust published the directory 9 months after the start 

of the 2012-13 school year, too late to assist families in selecting a school for that 

year. Without such information, parents cannot make fully informed school 

choices. Additionally, the Trust awarded scholarships to students several months 

after many schools completed their admissions and enrollment processes, limiting the amount of time and choice in selecting schools. Most families GAO 

spoke with were generally happy with OSP but some were concerned about the 

availability of program information.

The Trust’s internal controls do not ensure effective implementation and 

oversight of OSP. Adequate policies and procedures can provide reasonable 

assurance of effective, efficient operations, reliable financial reporting, and 

compliance with applicable laws. However, the Trust’s policies and procedures 

do not include a process for verifying eligibility information that schools self- report. As a result, the Trust cannot ensure that schools are eligible to participate 

in the program and, therefore, risks providing federal dollars to students to attend 

schools that do not meet standards required by law. Furthermore, the Trust’s 

database is not well structured and hampers the effectiveness of program 

implementation. For example, the Trust lacks written documentation for the 

database, and staff must rely on institutional memory to ensure processes such 

as data entry are conducted properly, which could contribute to errors in the 

database. As required by law, the Trust groups eligible applicants into three 

priority categories by which scholarships are then awarded by lottery; however, weaknesses in the database’s structure puts into question the Trust’s ability to 

provide accurate priority categories. Additionally, the Trust has not submitted its 

mandatory financial reports on time, despite a legal requirement that these 

reports be filed within 9 months of the end of the entity’s fiscal year. The Trust’s 

fiscal year 2010 financial report was almost 2 years late, and the Trust’s fiscal 

year 2011 and 2012 reports had not yet been submitted as of August 2013. In 

August 2013, the Trust also made amendments to its policies and procedures in 

three areas GAO identified. However, these amendments do not address all 

weaknesses identified in this report, and have not yet been fully implemented.

The Department of Education (Education) has provided limited assistance to the 

Trust in certain areas outlined in the memorandum of understanding (MOU) with 

the District and in the cooperative agreement with the Trust. Specifically, 

Education is responsible for helping the Trust make improvements to its financial 

system, enhance its site visit policies and procedures, and improve the accuracy 

of information provided to parents. Trust officials acknowledged that Education 

has provided general assistance regarding administrative and operational 

functions, but it has not assisted with specific improvements in these areas. Although the MOU is a written agreement between Education and the District, it 

holds the Trust, as the grantee, responsible for notifying District agencies to 

conduct required building, zoning, health, and safety inspections of participating 

schools—a requirement that is not detailed in the cooperative agreement signed 

by Education and the Trust—but would assist the Trust in providing continued 

oversight of schools participating in OSP. As a result, Trust officials were not 

acutely aware of this responsibility, and required inspections were not being 

conducted in the manner described in the MOU between Education and the 

District. 

View GAO-13-805. For more information, 

contact George A. Scott at (202) 512-7215 or 

scottg@gao.gov.
Page i GAO-13-805 District of Columbia Opportunity Scholarship Program

Letter 1 

Background 4

The Trust Provides Untimely Information and Scholarship Awards 12

The Trust Has Not Developed Effective Internal Controls to 

Safeguard Program Funds 19

Agencies Have Not Fully Executed Responsibilities Outlined in 

Governing Documents 30

Conclusions 35

Recommendations for Executive Action 36

Agency Comments and Our Evaluation 38

Appendix I Scope and Methodology 42

Appendix II Schools That Agreed to Accept Students in the District’s 

Opportunity Scholarship Program in School Years 2010-2011 

and 2011-2012 (“Participating Schools”) 50

Appendix III Total School and OSP Enrollment, School Year 2011-2012 52

Appendix IV Internal Control Frameworks 54

Appendix V Comments from the Department of Education 61

Appendix VI Comments from the District of Columbia Children and 

Youth Investment Trust Corporation 69

Appendix VII Contact and Staff Acknowledgments 74

Contents 
Page ii GAO-13-805 District of Columbia Opportunity Scholarship Program

Tables

Table 1: COSO Internal Control—Integrated Framework 20

Table 2: GAO Site Visit Priorities Based on Student Enrollment 

Criteria, School Year 2011-2012 46

Figures

Figure 1: Federal Appropriations for the Opportunity Scholarship 

Program, FY 2004 – 2013 7

Figure 2: Location and Enrollment of OSP Participating Schools in 

the District, School Year 2011-2012 10

Figure 3: OSP Scholarship Timeframes and Application Deadlines 

at Participating Schools with Highest and Lowest OSP 

Enrollment, School Year 2012-2013 17

Figure 4: The Trust’s FY 2010-2012 Timeline of Mandatory 

Reporting Deadlines and Report Publication for OSP, as 

of August 9, 2013 29

Figure 5: Responsibilities of Education and District Agencies as 

Stated in the June 2012 Memorandum of Understanding 31
Page iii GAO-13-805 District of Columbia Opportunity Scholarship Program

Abbreviations

COSO Committee of Sponsoring Organizations of the Treadway 

Commission

D.C./District District of Columbia

DCRA Department of Consumer and Regulatory Affairs

Directory Participating School Directory

Education Department of Education

EMS Emergency Medical Services

MOU Memorandum of Understanding 

OSP Opportunity Scholarship Program

OSSE Office of the State Superintendent for Education

SOAR Act Scholarships for Opportunity and Results Act

Trust DC Children and Youth Investment Trust Corporation

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Page 1 GAO-13-805 District of Columbia Opportunity Scholarship Program

441 G St. N.W.

Washington, DC 20548

September 30, 2013

The Honorable Tom Udall

Chairman

Subcommittee on Financial Services 

 and General Government

Committee on Appropriations

United States Senate

Dear Chairman Udall:

In 2004, Congress passed the D.C. School Choice Incentive Act of 

2003—the first federally-funded private school voucher program in the 

United States—in an effort to provide low-income parents residing in the 

District of Columbia (the District) with “expanded opportunities for 

enrolling their children in higher-performing schools.”1 Specifically, the Act 

authorized the Secretary of Education to award grants to eligible entities 

to provide eligible students with scholarships to attend private elementary 

and secondary schools in the District. The District’s program is known as 

the D.C. Opportunity Scholarship Program (OSP), and it was reauthorized 

in 2011 for 5 years under new legislation, the Scholarships for 

Opportunity and Results Act (SOAR Act).2

 

1 Pub. L. No. 108-199, Div. C, Title III, 118 Stat. 3, 127 (2004).

Since the program’s inception, 

Congress has provided more than $152 million for OSP, which has, in 

turn, provided expanded school choice to low-income students by 

awarding almost 5,000 scholarships to students who would unlikely have 

otherwise been able to attend private school. Questions have been 

raised, however, about whether students have as broad a choice as 

intended. In the 2011-2012 school year, for example, over half of OSP 

students were enrolled in only 15 percent of private schools that have 

agreed to accept students from this program (participating schools).

2 Pub. L. No. 112-10, Div. C, 125 Stat. 38, 199 (2011). The Act states that the 

reauthorization of OSP is part of a 3-part funding arrangement for the District’s public, 

charter, and private schools. Congress reported that the intent of this approach is to 

ensure that progress would continue to be made to improve public schools in the District 

and that resources would be available for a variety of educational options for District 

families. Id., § 3002.

 
 

Page 2 GAO-13-805 District of Columbia Opportunity Scholarship Program

In 2007, we reviewed OSP and found a need for increased accountability 

from the program administrator.3 Specifically, we found that the 

administrator at the time of our review—the Washington Scholarship 

Fund—did not have the capacity to oversee participating private schools 

and administer a growing scholarship program funded with federal 

dollars. We also found that because of inadequate accountability 

mechanisms, the program administrator could not provide key information 

to low-income families about school performance, quality indicators,4

In 2010, the Washington Scholarship Fund withdrew as the administrator 

of OSP and the Department of Education (Education) transferred the 

grant to run the program to the DC Children and Youth Investment Trust 

Corporation (the Trust). The Trust was initially created to link public and 

private resources to address the needs of children, youth, and families in 

the District. Its activities are primarily funded by grants from the District 

government.

or 

conformance with local safety and health regulations.

At the request of the committee, we assessed the extent to which the 

Trust is meeting its stated goals and properly managing federally 

appropriated funds. More specifically, our objectives were to determine:

1. the extent to which the Trust provides information that enables 

families to make informed school choices;

2. whether the Trust’s internal controls ensure accountability for OSP; 

and

3. how agencies responsible for implementing and overseeing OSP 

have performed their stated roles and responsibilities.

To address these objectives we used multiple strategies. To assess the 

extent to which scholarship recipients are able to make informed school 

choices, we analyzed key documents regarding participating schools and 

the OSP program that are available to parents. We also conducted site 

visits to 10 participating schools and interviewed key school officials. In 

 

3 GAO, District of Columbia Opportunity Scholarship Program: Additional Policies and 

Procedures Would Improve Internal Controls and Program Operations, GAO-08-9 

(Washington, D.C.: Nov. 1, 2007). 

4 That is, information about a school’s accreditation status, credentials held by teachers, 

and the financial stability for schools.
 

Page 3 GAO-13-805 District of Columbia Opportunity Scholarship Program

selecting the schools we visited, we chose the 5 schools with the highest 

absolute number of OSP students and the 5 schools with the highest 

concentration of OSP students given the total enrollment at the school in 

the 2011-2012 school year. In addition, we used information from the 

2011-2012 OSP Participating School Directory (the Directory) as well as 

OSP enrollment information for the 2011-2012 school year from the 

Trust’s database to better understand the characteristics of participating 

schools. We also interviewed officials at the Trust and Education. To 

assess the reliability of the enrollment data from school year 2004-2005 

to school year 2011- 2012 from the Trust’s database, we performed 

electronic testing for obvious errors in accuracy and completeness and 

interviewed agency officials knowledgeable about the data. We found 

substantial problems with the data, including missing fields or partially 

entered applications. However, we determined that the data were 

sufficiently reliable for the purpose of determining characteristics of OSP 

schools and students in school year 2011-2012. Lastly, to obtain 

information about the experiences of families in the program, we 

conducted two discussion groups—one in English and one in Spanish—

with parents and guardians of students who received and used an OSP 

scholarship in the 2012-2013 school year.

To assess the extent to which the Trust’s internal controls ensure 

accountability for OSP, we reviewed relevant laws and regulations, 

internal documents such as the Trust’s policies and procedures manual, 

as well as generally accepted guiding documents for internal controls 

including those published by GAO and the Committee of Sponsoring 

Organizations of the Treadway Commission (COSO).5

To assess the extent to which agencies responsible for overseeing OSP 

performed their stated roles and responsibilities, we reviewed relevant 

federal laws and regulations, guiding documents such as the June 2012 

memorandum of understanding (MOU) between Education and the 

We also analyzed 

the Trust’s database for administering OSP. In addition, we interviewed 

officials at the Trust and Education, and the Trust’s contractor in charge 

of creating and maintaining the database.

 

5 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999) and Committee of Sponsoring Organizations of the 

Treadway Commission, Internal Control—Integrated Framework (1992). We used the 

COSO standards to assess the Trust’s internal controls because the COSO framework 

applies to non-profit entities.
 

Page 4 GAO-13-805 District of Columbia Opportunity Scholarship Program

District of Columbia Government. We also interviewed key officials at the 

Trust, Education, and select agencies in the District. A more detailed 

discussion of our scope and methodology appears in appendix I.

We conducted this performance audit from May 2012 through September 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

Congress passed the D.C. School Choice Incentive Act of 2003 in 

January 2004, which directed the Secretary of Education to award a grant 

on a competitive basis for up to 5 years to an entity or entities to use to 

make scholarship payments to parents of eligible students to be used for

private school tuition, fees, and transportation expenses.6

In April 2011, Congress reauthorized OSP for 5 years under the 

Scholarships for Opportunity and Results Act (SOAR Act).

This Act 

created the program known as the District of Columbia Opportunity 

Scholarship Program (OSP), the first private kindergarten-through-grade12 school choice program supported by federal funds. The purpose of the 

Act was to provide low-income parents of students in the District, 

particularly parents of students who attend public schools identified as in 

need of improvement under the Elementary and Secondary Education Act 

of 1965, as amended, “with expanded opportunities for enrolling their 

children in higher performing schools in the District” by providing annual 

scholarships to attend the private elementary or secondary schools of 

their choice.

7

 

6 Pub. L. No. 108-196, Div. C, Title III, §§ 304, 307, 118 Stat. 3, 127, 129 (2004). 

Appropriations for the program were authorized through fiscal year 2008.

 The Act sets 

7 Pub. L. No. 112-10, Div. C, 125 Stat. 38, 199 (2011). Although the program was not 

reauthorized until April 2011, Congress provided appropriations for the program in the 

Omnibus Appropriations Act, 2009, Pub. L. No. 111-8, 123 Stat. 524, 653, and the 

Consolidated Appropriations Act, 2010, Pub. L. No. 111-117, 123 Stat. 3034, 3181. 

Background 

Laws Governing the 

Opportunity Scholarship 

Program
 

Page 5 GAO-13-805 District of Columbia Opportunity Scholarship Program

forth requirements for participating private schools.8

1. has and maintains a valid certificate of occupancy issued by the 

District of Columbia;

Specifically, the law 

provides that none of the funds may be used by an eligible student to 

enroll in a participating private school unless the participating school

2. makes readily available to all prospective students information on its 

school accreditation;

3. if operating for 5 years or less, submits to the eligible entity 

administering the program proof of adequate financial resources and 

the ability to maintain operations throughout the school year;

4. agrees to submit to site visits as determined to be necessary;

5. has financial systems, controls, policies, and procedures to ensure 

that funds are used according to the statute; and

6. ensures that each teacher of core subject matter in the school has a 

baccalaureate degree or its equivalent, regardless of whether the 

degree was awarded in or outside of the United States.9

Education’s Office of Innovation and Improvement, which is charged with 

the management of the program and oversight of the program 

administrator, awards scholarship funds to a grantee and provides 

programmatic guidance and technical assistance. Soon after the D.C. 

School Choice Incentive Act passed in 2004, Education awarded the 

grant to operate the OSP to the Washington Scholarship Fund, a 

nonprofit organization in the District of Columbia that had experience 

providing privately funded scholarships to low-income students. In May 

2010, Washington Scholarship Fund withdrew as the grantee and 

Education transferred the grant for administration of OSP to the DC 

Children and Youth Investment Trust Corporation (the Trust), a non-profit 

organization.10

 

8 Pub. L. No. 112-10, § 3007(a)(4), 125 Stat. 38, 203. 

As the program administrator, the Trust recruits new 

students and schools, receives and processes applications, and awards 

9 Id., § 3007(a)(4).

10 Established in 1999 by a charter from the District of Columbia, the DC Children and 

Youth Investment Trust Corporation partners with public schools, city agencies, and forprofit and nonprofit entities, to provide grants, technical assistance, youth training, and 

other support for children and youth in the District of Columbia.

Administration and 

Oversight of OSP
 

Page 6 GAO-13-805 District of Columbia Opportunity Scholarship Program

scholarship funds to program participants. The Trust is also responsible 

for providing oversight to participating private schools.

The SOAR Act, which was enacted about 11 months after the Trust 

assumed responsibility for administering the OSP grant, states that the 

grantee (the Trust) must ensure that scholarships be awarded through a 

random selection process if more eligible applicants seek admission to 

the program than the program can accommodate, or if more eligible 

applicants seek admission to a participating school than the school can 

accommodate, and the Trust has implemented this requirement through a 

lottery process. The groups of applicants that have a priority status as 

defined in the SOAR Act are (1) applicants who are currently attending a 

school that has been identified for improvement, corrective action, or 

restructuring under the Elementary and Secondary Education Act of 

1965, as amended; (2) applicants who have a sibling currently 

participating in OSP; and (3) applicants who received an OSP scholarship 

award in a previous year but did not use it. At the time of our review, the 

lottery process was carried out by Westat, a contractor.

In addition, the SOAR Act updates the responsibilities for implementing 

OSP for the District and Education. It directs the Secretary of Education 

and the Mayor of the District to revise the MOU regarding the 

implementation of OSP that was required pursuant to the D.C. School 

Choice Incentive Act. The MOU governs the program for fiscal year 2011 

and all subsequent years. It is intended to help ensure the efficient and 

effective continued implementation of the OSP in a manner that 

incorporates and is consistent with the roles and responsibilities of both 

Education and the District. According to the MOU, Education is 

responsible for overseeing the Trust11 as a recipient of federal funds and 

working with the Trust to ensure that it makes improvements to various 

aspects of program administration. The District also has a role in the 

administration of OSP. The MOU states that District agencies are directly 

responsible for conducting required building, health, and safety 

inspections of participating schools when notified by the Trust.

 

11 The Trust is not a party to the MOU, nor is it identified by name in the MOU. Instead, 

the MOU refers to the OSP grantee. However, for ease of reference, in this report, we 

refer to the MOU as though it does specifically identify the Trust as the OSP grantee.
 

Page 7 GAO-13-805 District of Columbia Opportunity Scholarship Program

According to Education, from fiscal years 2004-2010, Congress 

appropriated between $13.2 and $14.8 million per year for OSP, as 

shown in figure 1. For fiscal year 2011, the appropriated amount 

increased to about $15.5 million, and in fiscal year 2012, the appropriated 

amount increased to $20 million. Most recently, Congress appropriated 

about $19 million for the program for fiscal year 2013. Since OSP’s 

creation, about $152 million has been appropriated in total.

Figure 1: Federal Appropriations for the Opportunity Scholarship Program, FY 2004 

– 2013

The SOAR Act permits 11 percent of the grant funds each year to be 

used for certain administrative and other purposes as follows—with the 

remainder of the funds going towards student scholarships:

Federal Funding for OSP 

and Use of Funds
 

Page 8 GAO-13-805 District of Columbia Opportunity Scholarship Program

• Education:

• 5 percent for the program’s evaluation,12

• The grantee (the Trust):

• 3 percent for administrative costs,13

• 2 percent for parental assistance,14

• 1 percent for student academic support services.

and

15

The law provides for an increase in the amount of the scholarship for 

eligible students. Specifically, it provides up to $8,000 for grades K-8 and 

$12,000 for grades 9-12 starting in school year 2011-2012.16 While tuition 

is paid first, any leftover scholarship funds can be used to pay for school 

fees—including uniforms, field trips, before and after care—and 

transportation expenses.17

OSP is open to residents of the District who meet income eligibility 

guidelines. Specifically, students must come from households that have a 

combined income at or below 185 percent of the federal poverty 

 

12 Pub. L. No. 112-10, § 3009(d). Under the SOAR Act, Education’s Institute of Education 

Sciences has been tasked with the annual evaluation of the performance of students who 

received program scholarships. These evaluations are required to include a comparison of 

academic growth and achievement between students who received program scholarships 

and eligible students who applied but did not receive scholarships and a comparison of 

retention, high school graduation, and college admission rates of participating students 

and those who did not participate. Id., § 3009(a)(3). However, we do not discuss the 

program evaluation within the scope of this report because our focus was on the Trust’s 

administration of the program.

13 Pub. L. No. 112-10, § 3007(b).

14 Id., § 3007(c).

15 Id., § 3007(d).

16 The law allows for scholarship amounts to be adjusted for inflation beginning in school 

year 2012-2013. As a result, the maximum scholarship amounts for the 2012-2013 school 

year were $8,256 for grades K-8 and $12,385 for grades 9-12. Under the D.C. School 

Choice Incentive Act of 2003, the scholarship amount for all students was $7,500.

17 Expenses not covered by the program may include parent participation and/or 

fundraising fees, select uniform items such as undergarments or sneakers, basic school 

supplies, personal transportation, or other items not related to academic success.

Student Eligibility and 

Enrollment in OSP
 

Page 9 GAO-13-805 District of Columbia Opportunity Scholarship Program

threshold18

In the 2011-2012 school year, there were 53 participating schools in OSP 

(see fig. 2). These schools represent a wide range of grades, sizes, 

sectors, and tuition levels.

or that receive Supplemental Nutrition Assistance Program 

benefits (known as SNAP benefits) issued within the District. The student 

must also be at least 5 years old by September 30th of the school year. 

 

18 This threshold is increased to 300 percent of the federal poverty threshold for 

continuing students. The higher income limit for continuing students may remove any 

program disincentives for families who are able to increase their incomes. 
 

Page 10 GAO-13-805 District of Columbia Opportunity Scholarship Program

Figure 2: Location and Enrollment of OSP Participating Schools in the District, 

School Year 2011-2012
 

Page 11 GAO-13-805 District of Columbia Opportunity Scholarship Program

These schools are located throughout all eight wards of the District, with 

the greatest number of schools located in Ward 3. In accordance with 

District regulations for all private schools operating in the District, these 

schools must be accredited by, or be in the process of being accredited 

by, at least one of seven recognized accrediting organizations or any 

other approved accrediting body. Schools that are unaccredited must 

submit documentation to demonstrate satisfactory evidence of instruction.

Internal control is broadly defined as a process—affected by an entity’s 

board of directors, management, and other personnel—designed to 

provide reasonable assurance that the following objectives are being 

achieved: (1) effectiveness and efficiency of operations, (2) reliability of 

financial reporting, and (3) compliance with applicable laws and 

regulations. Internal controls include management and program policies, 

procedures, and guidance that help ensure effective and efficient use of 

resources; compliance with laws and regulations; prevention and 

detection of fraud, waste, and abuse; and the reliability of financial 

reporting. Effective internal control is a major part of managing any 

organization to achieve desired outcomes and manage risk.

Standards for Internal Control in the Federal Government presents five 

standards that define the minimum level of quality acceptable for internal 

control in government and provide the basis against which internal control 

is to be evaluated.19

 

19

These standards—control environment, risk 

assessment, control activities, information and communication, and 

monitoring—apply to all aspects of an agency’s operations and should be 

an integral part of a system that managers use to regulate and guide an 

agency’s operations. The private sector also recognizes the importance of 

internal controls for executives to better manage their business 

enterprises. The Committee of Sponsoring Organizations of the Treadway 

GAO/AIMD-00-21.3.1.

Internal Controls Relevant 

to Implementation and 

Oversight of OSP
 

Page 12 GAO-13-805 District of Columbia Opportunity Scholarship Program

Commission’s (COSO)20 Internal Control—Integrated Framework includes 

the same five key elements stated previously, which are intended to 

promote efficiency, reduce risk of asset loss, and help ensure the 

reliability of financial reports and compliance with laws and regulations.

The Trust provides program information to prospective and current OSP 

families through a variety of outreach activities. To reach prospective 

OSP families, the Trust advertises through print, radio, and bus ads, as 

well as in newspapers and flyers posted in neighborhood libraries, 

recreation centers, and local government service centers. For example, 

one OSP parent told us she found out about OSP through a local 

Spanish-language newspaper. The Trust conducts several application 

events throughout the District where interested families can apply for the 

program. The Trust also holds a participating school fair in which OSP 

families can obtain additional information about participating schools. In 

addition, the Trust works with families directly, offering frequent personal 

contact to assist families through the scholarship application and renewal 

processes, according to Trust officials. The Trust provides this assistance 

via phone, e-mail, and through one-on-one interactions, and employs 

Spanish and Amharic speakers to assist non-English speaking families.21

 

20 Committee of Sponsoring Organizations of the Treadway Commission, Internal 

Control—Integrated Framework (1992). COSO was formed in 1985 to sponsor the 

National Commission on Fraudulent Financial Reporting, an independent, private-sector 

initiative that studied the causal factors that can lead to fraudulent financial reporting and 

developed recommendations for public companies and their independent auditors; the 

U.S. Securities and Exchange Commission and other regulators; and educational 

institutions. In 1992, COSO issued Internal Control—Integrated Framework to help 

businesses and other entities assess and enhance their internal control. Since that time, 

COSO’s internal control framework has been recognized by regulatory standards setters 

and others as a comprehensive framework for evaluating internal control, including 

internal control over financial reporting.

Lastly, the Trust holds events to assist current OSP families, such as a 

21 Amharic is a language spoken in Ethiopia.

The Trust Provides 

Untimely Information 

and Scholarship 

Awards 

The Trust Provides 

Information to Families 

through Many Channels, 

but Its Participating School 

Directory Provides 

Incomplete and Untimely 

Information 
 

Page 13 GAO-13-805 District of Columbia Opportunity Scholarship Program

workshop for students transitioning from 8th grade to high school. Most 

families we spoke with were generally happy with their children’s 

participation in the program, citing increased safety and security at their 

children’s OSP schools and improved quality of education.

The SOAR Act requires all OSP grantee applicants to describe how 

parents of eligible students will be notified of the expanded choice 

opportunities each year, and the Directory is a key source of information 

about schools in the program. The Trust publishes the Directory for each 

school year in both English and Spanish, and it is designed to provide 

families with basic information on each participating school. The Directory 

also includes guidance on how to apply to private schools and 

worksheets to help families in their school search. In addition, the 

Directory provides information on tuition, accreditation, admissions, and 

facilities for each school participating in OSP for a given school year. 

The 2011-2012 Directory was used to assist families with selecting 

schools for 2012-2013. We found that this Directory lacked key 

information about schools’ tuition, fees, and accreditation that could help 

families make more informed school choices:

• Tuition: The 2011-2012 Directory listed one tuition amount for each 

school. According to Trust officials, the published tuition amount is the 

tuition applicable to each student unless the student is in a category to 

receive a discount on tuition. Whether a school offered different tuition 

levels, however, was not noted in the Directory. We found that many 

schools have different tuition levels, varying by grade level and 

religious affiliation.

• Grade level: Nine of the 53 participating schools in school year 

2011-2012 offered different tuition levels for students in grades K8 versus students in grades 9-12. In addition, 10 of the 53 

participating schools had tuition levels that differed within grades 

K-8.

• Religious affiliation: Some religious schools also offered lowered 

or discounted tuition rates for their members. For example, in 

school year 2011-2012, 6 Catholic schools offered lowered tuition 

rates for Catholic families, but the Directory only listed the higher, 

non-Catholic tuition rate. In addition, a Seventh-day Adventist 

school offered three different tuition levels, with the lowest rates 

offered to families belonging to their church and the highest rate 

offered to families who were not affiliated with this denomination. 
 

Page 14 GAO-13-805 District of Columbia Opportunity Scholarship Program

Only the highest tuition rate, however, was published in the 

Directory.

• Fees: The Directory offers parents limited information about fees. For 

example, the Directory excluded the cost of commonly required fees 

at schools, such as registration and book fees. In addition, many OSP 

families may need services such as before and after care, and hot 

lunches. The Directory listed the availability of such services but did 

not include their cost. The Directory also excluded information about 

parental involvement or fundraising fees. Some schools can 

reimburse at least part of these fees if parents volunteer a certain 

number of hours, according to four school officials. If a family cannot 

fulfill these volunteer hours, then it must pay these fees out of pocket 

because these fees are not covered under the OSP scholarship. Most 

OSP students attend schools where the maximum OSP scholarship 

amount would cover the estimated total cost of attendance (see 

sidebar). But without having this information, it is difficult for families to 

know the full cost of attendance, and they may be responsible for 

paying fees that they were unaware of. This may be difficult, given this 

program’s target population.

• Accreditation: The Directory also offers families incomplete 

information about schools’ accreditation status. According to 

representatives of accreditation organizations, school accreditation is 

important because it serves as a means of accountability and 

oversight. The Directory indicates which accrediting organizations are 

recognized by the District. However, the Directory lists some schools’ 

affiliated memberships as an accreditation organization. For example, 

one school was listed as having the National Association of Episcopal 

Schools as an accrediting organization, but this organization does not 

accredit schools. Three schools were listed as being accredited by 

Nativity Miguel, which is a network of schools serving low-income 

communities, not an accrediting organization.

Some families we spoke with told us that they did not receive the 

Directory or tuition information, and therefore, they were not aware of 

which costs would not be covered by OSP or which schools were 

participating in the program. Instead, they communicated directly with 

schools about whether they were participating in the program. Although 

the Directory is publicly available on the Trust’s website, not all program 

participants may have computer or Internet access. In addition, even if 

families have Internet access through smart phones, this does not 

necessarily mean that program participants can use them to access 

everything they need, according to one school official. Trust officials told 
 

Page 15 GAO-13-805 District of Columbia Opportunity Scholarship Program

us they provide direct assistance to families to help them select schools 

and discern their total cost of attendance, but not all families may be 

receiving this assistance.

In addition to having incomplete information, the Directory has also been 

published too late to truly assist families in selecting a school. Families 

need to select schools for their students before the school year starts in 

August or September. However, the Trust published the Directory for the 

2012-2013 school year in May 2013, about 9 months after the start of that 

school year. According to Trust officials, the Directory was published late 

because the school site visits—during which Trust officials confirm and 

update key school data for the Directory—occurred later in the year than 

in previous years due to substantial staff changes. Trust officials also told 

us that these directories are primarily meant to inform families selecting 

schools for the upcoming school year. While the 2012-2013 Directory was 

issued too late to assist families for that same school year, it can assist 

families for the upcoming 2013-2014 school year. Trust officials stated 

that in the future they plan to publish the Directory by December of the 

current school year. The Trust plans for future Directories to include more 

accurate notation of the school accrediting bodies and a general notation 

about applicable discounts and/or additional fees. 

According to Trust officials, they issued a list of participating schools in 

the fall for the 2012-2013 school year to assist families with school 

selection. This list of participating schools was intended to be a 

companion piece to the 2011-2012 Directory and included schools’ 

addresses and grades served, but it did not include key information such 

as updated tuition information and admissions requirements. According to 

Trust officials, the participating school list is updated as needed to reflect 

any school changes that may have occurred between the publication of 

the previous year’s Directory and the start of the school year. For 

example, the 2012-2013 list of participating schools excluded a school 

that had closed, even though this school was listed in the 2011-2012 

Directory. While some families may have been able to fill any gaps 

between these two sources of information through the guidance and 

hands-on assistance provided by the Trust, the extent to which all families 

had access to this direct assistance is unclear.
 

Page 16 GAO-13-805 District of Columbia Opportunity Scholarship Program

For both the 2012-2013 and the 2013-2014 school years, the Trust 

awarded scholarships several months after many schools’ application 

deadlines had passed. For the 2012-2013 school year, the Trust 

conducted its scholarship lottery in July 2012, about 1 month before 

classes started for many schools. In addition, the Trust did not hold its 

school placement and welcome fair, which it uses to assist families with 

school selection, until August 2012, the same month that classes began 

for 6 of the 10 schools we visited, as shown in figure 3. By that time, 

many of the schools in OSP had already completed their admissions and 

enrollment processes. We found that 9 of the 10 schools we visited did 

not have an application deadline or were still accepting applications after 

students had been notified that they had received a scholarship.22

 

22 We visited schools that had the highest concentration and enrollment of OSP students 

in the 2011-2012 school year. See appendix I for additional details about the selection of 

these schools.

The Timeframes for 

Awarding Scholarships Do 

Not Align with Many 

Schools’ Admissions and 

Enrollment Schedules
 

Page 17 GAO-13-805 District of Columbia Opportunity Scholarship Program

Figure 3: OSP Scholarship Timeframes and Application Deadlines at Participating Schools with Highest and Lowest OSP 

Enrollment, School Year 2012-2013

For the 2013-2014 school year, the Trust moved up its timeframes, giving 

families more time to select schools than in the previous year. First, the 

Trust awarded scholarships in late May 2013 and held its school 

placement and welcome fair in early June rather than August, as was 

done in 2012, according to Trust officials. Still, as in school year 2012-

2013, many schools had already completed their admissions and 

enrollment processes by that time. In addition, according to some schools 
 

Page 18 GAO-13-805 District of Columbia Opportunity Scholarship Program

we visited, awarding scholarships so close to the start of the school year 

can affect their ability to adequately plan for the coming school year. For 

example, officials at two schools we visited told us that as a result of the 

scholarship lottery and school fair being held in July and August 2012, 

respectively, they did not know how many students would be enrolled at 

their schools until just a few weeks before the school year started in 

August. This made it difficult to discern class sizes and plan for the 

number of teachers needed.

Officials at schools we visited told us that they have found ways to work 

around the scholarship time frame and accommodate OSP students. For 

example, one school held an additional open house and another school 

accepted applications as late as the first week of school, according to two 

school officials. However, several parents we spoke with mentioned that 

they only had about a month to find a school and enroll their students, at 

which time many schools were no longer accepting students, and three 

school officials told us that the scholarship timeframes do not give 

families enough time to research school options. Since the application 

and financial aid deadlines for some of the program’s most costly schools 

occur much earlier than the OSP scholarship timeframes, by the time a 

student is awarded a scholarship, there are neither financial aid dollars 

from the school nor space available for that student.23

According to Trust officials, Education’s requirement to verify family 

income using the most recent complete year of income information delays 

scholarship awards. To verify income information, the Trust also told us 

they have to wait until after the April 15th tax filing deadline. Trust officials 

noted that some schools use prior year income information to determine 

provisional financial aid awards, reconcile these awards with the current 

year’s tax information once that is available, and rescind financial aid 

awards if the incomes exceed a certain level. Trust officials expressed 

concerns about having to potentially rescind any scholarships, even 

though the chance that incomes will change so substantially among 

program participants is low. Trust officials are currently exploring ways to

use prior year income information to determine eligibility earlier in the 

year and enable them to award scholarships earlier. Education officials 

 

23 These schools generally have tuition levels that far exceed the OSP scholarship limit, 

but they also have the capacity to finance the remainder of the student’s cost of 

attendance through their own financial aid programs, which can include grants and 

scholarships.
 

Page 19 GAO-13-805 District of Columbia Opportunity Scholarship Program

told us if the Trust wants to consider using a different year’s income for 

the purpose of making preliminary determinations regarding students’ 

eligibility, it would have to submit its proposal to Education for evaluation.

The Trust’s policies and procedures lack detail in several areas related to 

school compliance and financial accounting, which may result in little 

overall accountability for program funds. The absence of detailed policies 

and procedures also reflect weak internal control in the areas of risk 

assessment, control activities, information and communication, and 

control environment. Internal control is broadly defined as a process 

designed to provide reasonable assurance that an organization can 

achieve its objectives with effective, efficient operations, reliable financial 

reporting, and compliance with laws and regulations. The Committee of 

Sponsoring Organizations of the Treadway Commission’s (COSO) 

Internal Control—Integrated Framework,

24

 

24 Committee of Sponsoring Organizations of the Treadway Commission, Internal 

Control—Integrated Framework (1992). COSO was formed in 1985 to sponsor the 

National Commission on Fraudulent Financial Reporting, an independent, private-sector 

initiative that studied the causal factors that can lead to fraudulent financial reporting and 

developed recommendations for public companies and their independent auditors; the 

U.S. Securities and Exchange Commission and other regulators; and educational 

institutions. In 1992, COSO issued Internal Control—Integrated Framework to help 

businesses and other entities assess and enhance their internal control. Since that time, 

COSO’s internal control framework has been recognized by regulatory standards setters 

and others as a comprehensive framework for evaluating internal control, including 

internal control over financial reporting. In May 2013, COSO issued an updated Internal 

Control—Integrated Framework. 

includes five key elements or 

components, as shown in table 1. COSO is applicable to the Trust 

because it is a non-governmental entity.

The Trust Has Not 

Developed Effective 

Internal Controls to 

Safeguard Program 

Funds 

The Trust Has Not 

Developed Effective 

Policies and Procedures 

for Implementing and 

Overseeing the Program
 

Page 20 GAO-13-805 District of Columbia Opportunity Scholarship Program

Table 1: COSO Internal Control—Integrated Framework

Control environment The Control Environment sets the tone of an organization, influencing the control consciousness of its 

people. It is the foundation for all other components of internal control, providing discipline and 

structure. 

Risk assessment Risk Assessment is the identification and analysis of relevant risks to achievement of the objectives, 

forming a basis for determining how the risks should be managed. 

Control activities Control Activities are the policies and procedures that help ensure management directives are carried 

out. Control Activities include a range of activities as diverse as approvals, authorizations, verifications, 

reconciliations, reviews of operating performance, security of assets and segregation of duties.

Information and 

communication

Information and Communication relates to the idea that pertinent information must be identified, 

captured, and communicated in a form and timeframe that enables people to carry out their 

responsibilities. Information systems produce reports, containing operational, financial, and compliancerelated information, that make it possible to run and control the business. There also needs to be 

effective communication with external parties, such as customers and regulators.

Monitoring Internal control systems need to be monitored—a process that assesses the quality of the system’s 

performance over time. This is accomplished through ongoing monitoring activities, separate 

evaluations or a combination of the two.

Source: COSO.

Policies and procedures are a central part of control activities and help 

ensure necessary actions are taken to address risks to achievement of 

the entity’s objectives. In August 2013, the Trust made amendments to its 

policies and procedures to address the financial review performed on 

schools, administrative expenses, and bank reconciliations. However, 

these amendments do not address all weaknesses identified in this 

report, and they have not yet been fully implemented.

The Trust, as administrator of OSP, is responsible for ensuring that 

participating schools comply with the reporting and program requirements 

that are outlined in the SOAR Act. The Trust, however, does not have a 

process for independently verifying the information that schools submit as 

evidence of compliance, reflecting weaknesses in the Trust’s risk 

assessment process and internal control activities.

The SOAR Act requires a potential OSP grantee to demonstrate how it 

will ensure that participating schools meet certain reporting and program 

requirements specified in the Act. In addition, the SOAR Act requires the 

grantee applicants to ensure that participating schools report to parents at 

least once during the school year on students’ academic achievement, as 

well as the safety and accreditation status of the school. The Act also 

requires schools to meet certain standards, such as building occupancy 

and teacher credentialing requirements. The Trust’s policies and 

procedures state that participating schools must self-certify whether they 

have met several of these requirements.

Self-Reported Information for 

School Compliance
 

Page 21 GAO-13-805 District of Columbia Opportunity Scholarship Program

Participating schools complete a School Participation Verification Form 

that is submitted to the Trust each year to attest to student academic 

performance, school safety, and all of the applicable requirements in the 

SOAR Act, including status of accreditation. According to District 

regulation, if a private school in the District is not accredited, the school 

can provide evidence of acceptable instruction to the District’s Office of 

the State Superintendent for Education (OSSE) by submitting information 

regarding teacher credentials and curriculum documentation. However, 

during our interview, officials from OSSE stated that they do not regularly 

ensure that schools have an acceptable curriculum. Officials we spoke 

with said that they are revisiting this policy, but they did not provide a 

timeline for whether and when any changes will occur. According to 

OSSE officials, the last time the Trust requested an accreditation review 

of participating OSP schools was before the start of the 2010-2011 school 

year.

The SOAR Act states that participating schools must maintain a valid 

certificate of occupancy. The Trust collects and reviews copies of the 

certificates of occupancy. However, if the validity of the certificate of 

occupancy changes, the Trust may not know of the change. We obtained 

and reviewed the certificates of occupancy for the 10 schools we selected 

for site visits. In 5 of the 10 schools, we could not discern the validity of 

their certificates of occupancy. For example, one school’s certificate of 

occupancy did not list “school” or “private school” for the use, but rather 

“child development center and infant preschool.” Enrollment at three other 

schools, as shown in the Directory, appeared to exceed the listed 

capacity, and one additional school’s certificate did not list a capacity so it 

is not known if the school has exceeded its current capacity. Additional 

follow-up is needed to determine if these certificates of occupancy are, in 

fact, valid, but the Trust does not make any inquiries with the District 

agency responsible for issuing certificates of occupancy, nor does the 

Trust follow up with the schools.

In addition, the Trust conducts site visits at participating schools but does 

not verify the documents or activities to which the schools attest. 

Participating schools complete a School Review Form to document each 

site visit. This form is also used by schools to attest to meeting reporting 

and program requirements and is not independently verified by the Trust.

As the program administrator, the Trust is responsible for mitigating 

potential program risks. Verifying the information reported by participating 

schools is important to ensuring that scholarships are awarded only to 

students to attend participating schools that are in compliance with the 
 

Page 22 GAO-13-805 District of Columbia Opportunity Scholarship Program

SOAR Act’s requirements and that the program is administered 

effectively. Without a mechanism or procedures for verifying the accuracy 

of the information provided by participating schools, the Trust cannot 

ensure that schools are eligible to participate in OSP and, therefore, risks 

providing federal dollars to students to attend schools that do not meet 

the educational and health and safety standards required by the District.

The Trust’s policies and procedures lack sufficient detail to ensure each 

participating school in OSP has the financial systems, controls, policies, 

and procedures in place to ensure federal funds are used according to 

the law, a requirement of the SOAR Act.

The Trust’s policies and procedures require the financial Controller of the 

Trust to review documentation that demonstrates the adequacy of each 

participating schools’ financial resources. Based on this financial review, 

the Trust has identified two schools as “high risk,” one for issues that 

occurred during the 2010-2011 school year, and the other for financial 

struggles in 2011. However, the policies and procedures for this financial 

stability review do not identify the specific risk factors that should be 

considered when assessing schools’ financial sustainability information.25

According to the risk assessment and control activities components of 

COSO’s internal control framework, it is important that management 

carefully considers factors that contribute to or increase risk and that 

management creates policies and procedures that help ensure that 

necessary actions are taken to address these risks. For OSP, factors that 

contribute to or increase risk include whether a school can continue to 

reasonably meet its financial obligations as they become due, and how 

dependent a school is on OSP funds. If a school cannot reasonably meet 

its financial obligations, it could be monitored more closely before and 

after being accepted into the program. If a school is overly reliant on OSP 

In addition, it is unclear what risk factors were considered during the prior 

Controller’s review of the schools’ documentation demonstrating 

adequate financial resources since the policies and procedures did not 

specify factors to consider and, according to current Trust officials, there 

was no documentation about the review.

 

25 In August 2013, the Trust made amendments to the policies and procedures manual 

regarding the financial review performed on schools, administrative expenses, and bank 

reconciliations. However, these amendments do not address all weaknesses identified in 

this report, and they have not yet been fully implemented.

Financial Stability Review of 

Schools
 

Page 23 GAO-13-805 District of Columbia Opportunity Scholarship Program

funds, which would be determined by the Trust, further review or 

increased monitoring could be warranted. As a result of certain risk 

factors not being considered in assessing schools’ financial sustainability, 

schools that are not financially sustainable may be participating in the 

program.

Based on documents provided by the Trust, several schools we visited 

that participated in OSP during the 2010-2011 and 2011-2012 school 

years did not provide detailed financial statements necessary to assess 

their financial stability, and during this time, the Trust did not have a 

practice of documenting its financial review of schools.26

The Trust does not have detailed policies and procedures for dealing with 

schools that are not in compliance with program rules. For example, if the 

Trust discovers that a school no longer possesses a valid certificate of 

occupancy or is not accredited and did not meet the District’s educational 

standards, the Trust lacks policies and procedures dictating what is to be 

The financial 

information submitted by 6 of the 10 schools we visited did not include 

detailed financial information required by the Trust’s policies and 

procedures. There was not any documentation or guidance completed by 

the previous Controller on these financial reviews. Officials from 

participating OSP schools we visited also confirmed that the Trust did not 

ask for additional information or support for the financial condition of the 

schools. Despite the policies and procedures that exist for OSP financial 

review of schools, there is little documentation detailing the analyses 

performed or the conclusions reached by the Trust. In addition, 

exceptions to the policy, such as where schools submitted information 

that did not adhere to the policies and procedures, was not documented. 

As stated earlier, the Trust amended their policies and procedures in 

August 2013 to include more detail regarding the financial review of 

participating schools; however, these amendments have not yet been 

fully implemented.

 

26 According to the Trust’s policies and procedures, the finance resource documentation 

submitted by schools is used by the Trust’s administrator to make an informed judgment 

as to whether there is proof of adequate financial resources reflecting the financial 

sustainability of the school, in addition to the school’s ability to be in operation throughout 

the school year. The Controller reviews documents submitted by the school. Documents 

accepted for finance resources include audited financial statements, financial statements 

accompanied by a letter from a Certified Public Accountant, letter signed by a Certified 

Public Accountant indicating the school is operating according to generally accepted 

accounting principles, or other documentation.

Addressing Non-Compliant 

Participating Schools
 

Page 24 GAO-13-805 District of Columbia Opportunity Scholarship Program

done at what time in the school year to ensure all schools participating in 

the program meet program rules and all students in OSP are attending 

schools that comply with these standards of safety, educational quality, 

and financial stability. The Trust’s policies and procedures provide only 

one example of a policy directed at a school not meeting standards 

required by the SOAR Act: if a school is unable to provide supporting 

documentation for financial sustainability, the Trust’s policy is that 

scholarship payments to the school will be distributed on a month-tomonth basis, as opposed to three times per year. It is a weakness in the 

Trust’s control activities that there is not a clearly defined, comprehensive 

written policy addressing schools out of compliance with program rules. 

Trust officials told us that they were not clear on what actions they could 

take to address non-compliant schools. However, Education officials told 

us that under certain circumstances the Trust can remove a school from 

participating in OSP.

The Trust’s policies and procedures for fiscal years 2010, 2011, and 2012 

did not specify how to track administrative expenses, including what 

expenses should be included, and the Trust has little documentation to 

support administrative expenses incurred during the fiscal years 2010, 

2011, and 2012. In addition, the Trust does not have detailed policies and 

procedures outlining the monthly bank reconciliation process, where staff 

review accounting system records and compare them to bank records.

27

The SOAR Act limits the Trust’s administrative expenses to 3 percent of 

the annual grant amount. The Trust’s policies and procedures state that 

they may only draw down federal funds from Education on a 

reimbursement basis after such expenses have been incurred and paid.

While the Trust’s policy manual does provide guidance for tracking 

employee time that should be billed to the program, it does not provide 

guidance for other expenses such as rent, telephone, printing, or office 

As stated earlier, it is important that an entity’s management have policies 

and procedures in place that address risks to achieving an entity’s 

objectives. Control activities include a range of activities such as 

verifications, reconciliations, as well as reviews of operating performance 

and security of assets.

 

27 In August 2013, the Trust made amendments to its policies and procedures manual 

regarding the financial review performed on schools, administrative expenses, and bank 

reconciliations. However, these amendments do not address all weaknesses identified in 

this report, and they have not yet been fully implemented.

Administrative Expenses and 

Bank Reconciliations
 

Page 25 GAO-13-805 District of Columbia Opportunity Scholarship Program

supplies, which could possibly be counted as administrative expenses for 

purposes of seeking reimbursement. The cost of administering OSP could 

be higher or lower than the 3 percent designated for administrative costs.

Because these expenses were not tracked prior to October 2012, the true 

cost of administering the OSP program is unknown. In part due to the 

outcome of their fiscal year 2010 financial audit, the Trust has begun to 

track administrative expenses more closely.

The Trust did not draw down federal reimbursement from Education for 

administrative expenses for fiscal years 2010, 2011, and 2012.28

In addition, as part of the finance department’s monthly bank 

reconciliation process, the Trust’s policies and procedures also refer to 

scholarship payment reconciliation as well as administrative expense 

drawdown reconciliation. However, the Trust’s policies and procedures do 

not specify certain aspects of the reconciliation, such as when the 

reconciliations should be completed, how exceptions should be identified 

and dispossessed, how the process should be documented, and when 

the reconciliation should be reviewed—and by whom.

In 

addition, the Trust did not document the decision or approval as to why it 

did not follow its policies and procedures or did not request 

reimbursement from Education for its administrative expenses. According 

to Education officials, grantees do not typically document why they have 

not drawn down funds. In addition, they explained that Education’s grants 

management system automatically flags funds that have not been drawn 

down within a particular time frame and the system has not flagged the 

Trust since funds had been drawn for the scholarships. Education officials 

also stated that the Trust classifies its obligations and expenditures in 

reports such as their monthly expense reports, which is sufficient for the 

department’s purposes.

Without the specific guidance in the policies and procedures, it will be 

difficult for the Trust to ensure that items are being appropriately and 

consistently tracked and recorded, as administrative expenses may be 

included that should not be (or not included that should be). In addition, 

without specificity in the policies and procedures regarding bank 

reconciliations, these reconciliations may not be completed in a 

 

28 Due to the transfer of the OSP grant to the Trust in May 2010, the fiscal year 2010 

draw-down would only reflect administrative expenses incurred for OSP administration 

from May 2010 through September 2010.
 

Page 26 GAO-13-805 District of Columbia Opportunity Scholarship Program

consistent or timely manner and increases the potential for errors, and 

likelihood that errors will not be identified and corrected in a timely 

manner.

The Online Reports and Invoicing System (the database), which is used 

by the Trust to manage the OSP program, is not structured well enough 

for effective program implementation and oversight. Information contained 

in the database includes current and past application information for 

students and guardians, school placement information for each student 

who received a scholarship award, payment information, and information 

on participating schools.

According to COSO’s Integrated Framework, information should be 

communicated to management and within the entity in a form and time 

frame that enables officials to carry out their responsibilities and 

determine whether they are meeting their stated objectives. For example, 

in OSP, it is important that Trust officials have access to accurate, up-todate student application information in order to meet program objectives, 

such as determining eligibility and awarding OSP scholarships in an 

efficient and timely manner. Similarly, families of OSP scholarship award 

recipients, as consumers, need complete and timely information about 

participating schools to make informed decisions about what school is 

best for the student. The Trust’s database has several deficiencies 

including a lack of documentation and automated checks, and a deficient 

structure, which leaves the database open to errors and slows the Trust’s 

ability to manage the program on a day-to-day basis, and communicate 

information about the program to families and Education.

The Trust (including the contractor that created and maintains the 

database) does not have any documentation for this database. For 

example, there is no user guide or data dictionary, and potential users of 

the database must rely on the institutional memory of select users who 

have had more experience with the database to understand how to 

properly use the database or the definitions of key data fields. When we 

attempted to follow various verbal or informal written instructions for using 

the database, we found flaws in these instructions that necessitated 

several rounds of follow-up to successfully perform key functions and 

basic data manipulation. It is not known what specifically caused this 

condition, but Trust officials have noted financial constraints in requesting 

more support from the contractor.

The Trust’s Database Is 

Not Efficiently Structured

Lack of Documentation
 

Page 27 GAO-13-805 District of Columbia Opportunity Scholarship Program

In addition to lacking documentation, the database does not have key 

automated checks built into the system to ensure accuracy and efficient 

data entry. Automated checks help maintain integrity in a database 

reducing the risk that a significant mistake could occur and remain 

undetected and uncorrected. For example, the Trust’s database does not 

have checks to determine if a student’s application information has 

already been entered. When a student submits an application, before his 

or her information is entered into the system, a Trust staff person must 

run searches in the database for his or her name, the guardian’s name, 

both persons’ Social Security numbers and address to ensure the 

applicant is not already in the system. These checks are necessary 

because the system allows duplicate entry of the same student 

information, potentially rendering the data unreliable, even with the 

searches described above. To ensure data are accurate given the lack of 

automated checks, the Trust stated that one of their officials runs several 

queries and creates tables in Microsoft Excel to check for errors by hand 

on a weekly or more frequent basis during key periods for the program.

The database’s current structure hampers an administrator’s ability to 

look at historical trends and use them as an effective management tool. 

When the Trust inherited the database from the Washington Scholarship 

Fund, the older data in the system were not cleaned, and thus there are 

many records in the database with missing fields, or applications that are 

only partially entered, suggesting they are not valid records. The Trust 

has stated they cannot attest to the accuracy of these older data. Yet, the 

Trust is using these older data in reports without an explanation of the 

potential issues of inaccuracy.

The weaknesses in the database’s structure also affect key activities for 

the Trust, such as determining the priority groups of applications for the 

OSP lottery. As stated earlier in this report, the SOAR Act states that if 

more students apply to OSP than the program can accommodate, the 

grantee (the Trust) must ensure that applicants are selected for awards 

through a random selection process that gives weight to three priority 

groups (which the Trust has implemented through a lottery). The groups 

of applicants that have a priority status as defined in the SOAR Act are: 

(1) applicants who are currently attending a school that has been 

identified for improvement, corrective action, or restructuring under the 

Elementary and Secondary Act of 1965, as amended; (2) applicants who 

have a sibling currently participating in OSP; and (3) applicants who 

received an OSP scholarship award in a previous year but did not use it. 

Using the Trust’s database, we employed our own methodology to 

replicate the process to determine the number of students in each 

Lack of Automated Checks

Weaknesses in Structure 
 

Page 28 GAO-13-805 District of Columbia Opportunity Scholarship Program

applicant priority group for the 2011-2012 school year because no 

documentation exists for these queries. However, we were unable to 

determine which students belonged in the third priority category of 

students for the 2011-2012 school year because a key variable necessary 

for this calculation appears to be unreliably populated. In other words, it 

does not appear possible to use the Trust’s database to derive this 

priority category and puts in question the Trust’s ability to provide 

accurate priority categories for the OSP lottery.

Lastly, data entry of application information is also problematic. In 

addition to basic eligibility information, OSP applications also include 

important information needed for the third-party evaluation of the OSP 

program. According to Education officials, the evaluation timelines have 

been negatively affected for the 2011-2012 and 2012-2013 school years 

because data entry was not completed in a timely manner. In one 

instance the Trust had to retrieve hard copies of the applications from 

storage and send relevant application data to the officials involved in the 

evaluation because they were so behind in data entry. Education officials 

stated that there may have been a lack of clarity regarding the specific 

information the Trust was supposed to enter into the database and that 

delays resulting from untimely data entry should not be an issue going 

forward.

The Single Audit Act requires that recipients submit their Single Audit 

reports to the federal government no later than 9 months after the end of 

the period being audited, which would be June 30th for an entity with a 

September 30th fiscal year end, such as the Trust. The Trust’s Financial 

Statements, Schedule of Expenditures of Federal Awards, and 

Independent Auditors’ Reports Required by Government Auditing 

Standards and OMB Circular A-133 for the Year Ended September 30, 

2010, were issued on January 31, 2013—more than 2 years after the end 

of its 2010 fiscal year. Until this report was issued, Education did not have 

the financial reports required to properly account for the federal funds 

expended for OSP under the Trust’s administration. According to Trust 

officials, the 2010 audit was delayed because of a need to change audit 

firms and ongoing investigations regarding its finances related to other 

grants.

The issue of delayed reports has not been resolved. As of August 2013, 

the Trust’s audited financial statements for fiscal year ending September 

30, 2011, and 2012 have not been issued yet (see fig. 4). On August 9, 

2013, Trust officials told us that the final fiscal year 2011 audit is expected 

to be completed by the end of August 2013 and the fiscal year 2012 audit 

Weaknesses in Data Entry 

Process 

The Trust Has Not Filed Its 

Mandatory Financial 

Reports on Time
 

Page 29 GAO-13-805 District of Columbia Opportunity Scholarship Program

will not be completed before September 2013.29

Figure 4: The Trust’s FY 2010-2012 Timeline of Mandatory Reporting Deadlines and Report Publication for OSP, as of August 

9, 2013

As a result of the Trust’s 

delay in submitting mandatory financial reports there was no opportunity 

for formal oversight of federal dollars spent on OSP for almost 2 years 

under the Trust’s administration. In addition, the continued delay in the 

audit reports means the Trust has not taken actions on deficiencies found 

in each audit in a timely manner to mitigate further issues.

 

29 In their written comments on a draft of this report in September 2013, the Trust and 

Education officials stated that the Trust had submitted its fiscal year 2011 mandatory 

financial reports.
 

Page 30 GAO-13-805 District of Columbia Opportunity Scholarship Program

The SOAR Act requires that the Secretary of Education and the Mayor of 

the District of Columbia enter into a memorandum of understanding 

(MOU) that addresses how OSP will be implemented. The MOU, which 

was agreed upon by Education and the District in June 2012, is intended 

to help ensure the efficient and effective implementation of OSP in a 

manner that incorporates and is consistent with the roles and 

responsibilities of Education and the District. It describes, for example, 

offices and officials within Education and the District that have lead 

responsibility for implementing OSP, issues and areas on which 

Education and the District will collaborate, and specific activities that 

Education and District agencies, such as the Department of Consumer 

and Regulatory Affairs (DCRA), Fire and Emergency Medical Services 

(EMS), and the Department of Health will carry out. According to the 

MOU, Education is responsible for working with the Trust to improve 

certain aspects of the administration of OSP. The District is responsible 

for conducting regulatory inspections of participating schools—upon 

notification by the Trust—and providing the Trust with the results of those 

inspections (see fig. 5).30

 

30 As noted previously, the Trust is not a party to the MOU, nor is it identified by name in 

the MOU. Instead, the MOU refers to the OSP grantee. However, for ease of reference, in 

this report, we refer to the MOU as though it does specifically identify the Trust as the 

OSP grantee.

Agencies Have Not 

Fully Executed 

Responsibilities 

Outlined in Governing 

Documents 
 

Page 31 GAO-13-805 District of Columbia Opportunity Scholarship Program

Figure 5: Responsibilities of Education and District Agencies as Stated in the June 2012 Memorandum of Understanding

In addition, Education entered into a cooperative agreement with the 

Trust to set forth the responsibilities of each entity for implementing OSP 

as required by the SOAR Act and the Education Department General 

Administrative Regulations. Education and Trust officials signed the 

cooperative agreement in June 2013, 3 years after the grant for OSP had 

been transferred to the Trust. Education officials stated that, among other 

reasons, the cooperative agreement had not been developed any earlier 

because of substantial turnover in staff at the Trust. Education officials 

stated they wanted to wait to implement the agreement until the Trust’s 

staff had stabilized. Trust officials stated that the cooperative agreement 

was an opportunity to codify the various ways in which Education and the 

Trust would assist each other in implementing the program. Through the 
 

Page 32 GAO-13-805 District of Columbia Opportunity Scholarship Program

cooperative agreement, Education also agreed to assist the Trust in the 

same four areas stated in the MOU.

Education has provided limited assistance to the Trust as agreed upon in 

the MOU and cooperative agreement governing OSP. Trust officials 

acknowledged that they have not proactively sought Education’s 

assistance in these areas. They told us that although they have had 

several discussions with Education regarding the general administration 

of the program and operational issues, they have not had opportunities to 

discuss lessons learned or making improvements in certain areas of 

program administration.

Through the MOU and cooperative agreement, Education is responsible 

for helping the Trust ensure that it implements appropriate improvements 

to its financial system. However, according to Trust officials, Education 

has not undertaken any activity to help improve its financial systems and 

the Trust has not had any conversations with Education about doing so. 

Education officials told us that the Trust’s financial systems were an 

improvement over the previous administrator’s financial system and that 

they have not had to closely manage the Trust in this area. However, as 

previously discussed, the Trust’s policies and procedures do not provide 

specific guidance on allocating certain administrative expenses and the 

Trust does not have detailed policies and procedures outlining the bank 

reconciliation process. Further, as a result of the Trust’s tardiness in 

submitting mandatory financial reports, the Trust was unable to account 

for federal dollars spent on OSP for about 2 years after the end of fiscal 

year 2010.

Education has not assisted the Trust in developing, implementing, or 

updating its policies and procedures for conducting site visits, as specified 

in the MOU and cooperative agreement. According to Education officials, 

as long as the Trust maintained the procedures used by the previous 

administrator, there was no need to revise its site visit procedures. When 

we spoke to Trust officials, however, we were told that although 

Education has not assisted with its site visit policies and procedures, the 

Trust updates its procedures every year and provides them to Education

for review. Additionally, Education told us that it did not have any 

concerns with the timing of the Trust’s site visits, even though the Trust 

did not conduct site visits for the 2012-2013 school year until February 

2013—the second semester of the school year.

Education Has Provided 

Limited Assistance to the 

Trust

Improvements to Financial 

Systems

Site Visit Policies and 

Procedures 
 

Page 33 GAO-13-805 District of Columbia Opportunity Scholarship Program

According to the MOU and cooperative agreement, Education agreed to 

assist the Trust in developing procedures to improve the accuracy of 

information provided to families before they choose a participating school 

and encourage schools to make such information available on an annual 

basis to families of enrolled students. Education officials stated that they 

meet with the Trust at the start of each school year to discuss marketing 

and recruitment, the participating school fair, and how to engage with 

families, and to provide feedback on these aspects of OSP as needed. 

For example, Education worked with the Trust to publish the school 

Directory for the 2012-2013 school year. Education did not have any 

concerns with the accuracy of the information provided to families for the 

purpose of selecting a school to attend. According to the Trust, Education 

relies on it to verify that schools are providing parents with such 

information. However, as discussed earlier, the school Directory does not 

include complete information about schools’ tuition, fees, and 

accreditation that families need to make informed school choices.

In addition to the responsibilities described above, Education is also 

responsible for providing oversight of the Trust as a recipient of federal 

funds. According to Education officials, its role is to identify a grantee to 

administer OSP and ensure that the grantee adheres to applicable federal 

law and regulations. Education monitors the Trust with regard to (1) 

progress in implementing OSP; (2) financial records; and (3) data 

records, including records on student placements and numbers of 

scholarship awards. The activities that Education conducts as part of its 

oversight of the Trust are documented in the cooperative agreement 

between Education and the Trust and it conducts ongoing reviews of the 

Trust’s activities to ensure satisfactory performance under the 

cooperative agreement. Education officials stated that the cooperative 

agreement was developed, in part, to increase its oversight of the Trust. 

For example, Education used the cooperative agreement to institute 

reporting requirements and clarify program rules. Officials said they also 

recognized the need for a closer partnership with the Trust and stated 

that the cooperative agreement was an opportunity to clearly describe the 

Trust’s expectations.

Education officials also told us that they provide guidance and technical 

assistance to the Trust. For example, Education officials told us they 

participate in conference calls with Trust officials, review the Trust’s 

annual performance report and monitoring plans, and provide ongoing 

technical assistance. Education officials also stated that they conduct 

regular, ongoing desk monitoring of the Trust, and will also conduct 

biannual site visits with the Trust beginning in the fall of 2013. If there 

Information Provided to 

Families

Oversight 
 

Page 34 GAO-13-805 District of Columbia Opportunity Scholarship Program

were any problems with safeguarding OSP funds, Education officials 

stated they would work with the Trust to correct the problem or, if 

necessary, they could penalize the Trust through actions such as freezing 

and withholding funds, recovering funds, and ensuring that the grant 

cannot be renewed.

The MOU requires that the District conduct inspections necessary for

schools to participate in OSP “upon notification by the grantee (the 

Trust),” but required inspections are often not being conducted. For 

example, the MOU requires the District Government, upon notification by 

the Trust, to conduct regulatory inspections of all program schools to 

determine whether they have a current certificate of occupancy. The 

District’s DCRA issues certificates of occupancy and conducts 

inspections based on the types of building or trade permits that schools 

have. A DCRA official, however, stated that it relies on the permit holder 

to make requests for all required inspections. Also, the District’s Fire and 

EMS Department is responsible for conducting biennial inspections or 

otherwise determining whether participating schools comply with 

applicable District health and safety requirements, as required by the 

MOU. However, a Fire and EMS official stated that private schools are 

not subject to regular inspections. Trust officials told us they did not know 

whether participating schools had been inspected by the District 

agencies. Lastly, officials at schools we visited told us that certain District 

agencies had conducted some inspections but not specifically for OSP. 

Rather, they occurred for other reasons, such as general inspections for 

schools that offer special education or early childhood services.

The MOU also states that the District should provide information to the 

Trust regarding whether participating schools are in conformance with 

District requirements. The Trust’s understanding of this requirement is 

that the District should be providing the inspection results on a regular 

basis without being specifically asked by the Trust. However, Trust 

officials told us they do not receive any information from the District as a 

result of any inspections that may have been conducted at participating 

schools. And according to the Trust, it does not follow up with District 

agencies to inquire about the results of any of the inspections.

Although the MOU is a written agreement between Education and the 

District, it includes a responsibility for the Trust. Specifically, the MOU 

states that the Trust—as the grantee—is responsible for notifying District 

agencies to conduct these required inspections of participating private 

schools. Given that the Trust is responsible for ensuring that participating 

Requirements Under the 

MOU Are Not Being Met
 

Page 35 GAO-13-805 District of Columbia Opportunity Scholarship Program

schools continue to be eligible to receive federal dollars through OSP, 

notifying the District agencies can be important in ensuring appropriate 

oversight of participating schools. This activity can be especially important 

for agencies like the District’s Fire and EMS department that do not 

normally inspect private schools. However, because the Trust is not a 

signatory to the MOU, Trust officials were not acutely aware that they 

were responsible for notifying the District agencies. Furthermore, the 

cooperative agreement between Education and the Trust does not 

include this requirement for the Trust to notify District agencies. Officials 

from the Trust stated that they assumed that District agencies conducted 

inspections of private schools as a matter of process, without the Trust 

prompting them to do so. As a result, activities that are crucial to the 

successful implementation of the program—such as building, zoning, 

health, and safety inspections—may not be occurring for all participating

schools. 

The OSP is intended to afford District families the opportunity to attend 

higher-performing schools of their choice and have all or part of the cost 

of attendance paid. In order to make well-informed decisions, however, 

families need complete and timely information on schools’ tuition, fees, 

and accreditation, as well as timely scholarship awards. Since taking over 

OSP, the Trust has not provided such information to families in a timely 

manner, requiring families to make less-informed decisions near the 

beginning of the school year, when many schools no longer have places 

for admission. 

The Trust needs to improve program management and operations to 

assure efficiency and effectiveness. Currently, it does not effectively 

oversee participating schools, has not implemented effective policies and 

procedures, and is unable to efficiently manage day-to-day program 

operations. As a result, families may believe that participating schools 

fully meet program requirements, although the Trust cannot ensure that 

these schools meet them. In August 2013, the Trust made amendments 

to its policies and procedures manual regarding the financial review 

performed on schools, administrative expenses, and bank reconciliations. 

However, these amendments do not address all weaknesses identified in 

this report, and they have not yet been fully implemented. Without 

sufficiently detailed policies and procedures for all aspects of the Trust’s 

operation, the Trust cannot sufficiently monitor its own operation of the 

program and may not be able to account for all federal dollars spent on 

OSP. Additionally, because of the weaknesses in its program database, 

the Trust cannot efficiently manage day-to-day operations of the program.

Conclusions 
 

Page 36 GAO-13-805 District of Columbia Opportunity Scholarship Program

The weaknesses that we have identified highlight the need for sustained 

oversight and management attention to ensure efficient and effective 

program implementation and accountability over federal funds. However, 

Education has provided the Trust with limited assistance in specific areas 

stated in the MOU and the cooperative agreement governing the 

program. Furthermore, the Trust is unsure whether key activities crucial to 

the successful implementation of the program—inspections for 

compliance with the District’s building, zoning, health, and safety 

requirements—are being conducted. Under the MOU, the inspections are 

to be done upon the Trust’s notification to District agencies, but the Trust 

is not a signatory to the MOU. Moreover, the cooperative agreement 

between Education and the Trust is silent regarding the responsibilities of 

the Trust on this issue. The Trust’s limited ability to effectively oversee 

participating schools coupled with the weaknesses in the Trust’s internal 

control environment underscore the need for Education to conduct more 

rigorous oversight and monitoring of the Trust. Not only would increased 

oversight help ensure that the Trust is administering the program 

effectively, but it would also help ensure that OSP achieves its intended 

purpose as outlined in the SOAR Act.

To ensure families receive expanded opportunities for school choice and 

OSP is implemented and overseen effectively, we recommend that the 

Secretary of Education take the following actions:

• Revise the June 2013 cooperative agreement between Education and 

the Trust to include Education’s expectations for the Trust regarding 

collaboration with District agencies to ensure they conduct required 

building, zoning, health, and safety inspections.

• Work with the Mayor of the District of Columbia to revise the 

memorandum of understanding that governs OSP implementation to 

include processes that will help ensure that the results of OSP school 

inspections, when they are conducted, are communicated to the 

Trust.

• Explore ways to improve Education’s monitoring and oversight of the 

Trust. For example, Education could require the Trust to develop and 

implement a plan for how it will address its timeliness in mandatory 

financial reporting.

• Conduct activities to ensure that the Trust:

Recommendations for 

Executive Action
 

Page 37 GAO-13-805 District of Columbia Opportunity Scholarship Program

• publishes the school Directory prior to participating schools’ 

application deadlines with more complete information.

• more closely aligns its scholarship timeframes with schools’ 

admissions and enrollment schedules. Education could find ways 

to assist the Trust in executing the OSP lottery earlier in the 

school year, for example, by allowing the Trust to use the prior 

year’s income information to make preliminary determinations 

regarding eligibility.

• improves its OSP database by creating and maintaining 

documentation for the use of the database, adding automated 

checks to the system, creating flags and/or variables for the key 

priority categories called for in the SOAR Act, and streamlining the 

data entry process for new applications in order to ensure there is 

sufficiently reliable data regarding the operation of the program.

• Require the Trust to update its policies and procedures in several key 

respects, and monitor the Trust’s activities to ensure that these 

updates are made. These updates should include: 

• identifying the steps the Trust will take to verify reported 

information on participating schools’ compliance with reporting 

and program requirements specified in the SOAR Act.

• identifying the specific risks that should be included in the 

evaluation performed when assessing participating schools’ 

financial sustainability information, including a record of the 

analyses performed, and ensure that the conclusions reached with 

regard to schools’ financial sustainability are documented.

• specifying a process for addressing schools that are noncompliant 

with program requirements.

• providing more detailed procedures in key areas including 

calculating yearly administrative expenses, and performing 

monthly and year end reconciliations of the OSP bank account, 

and ensure the document reflects current practices and that key 

decisions associated with administrative expenses are 

documented.
 

Page 38 GAO-13-805 District of Columbia Opportunity Scholarship Program

We provided a draft of this report to Education, the Office of the Mayor of 

the District of Columbia (the District), and the DC Children and Youth 

Investment Trust Corporation (the Trust) for comment. Education officials 

provided technical comments, which were incorporated into the final 

report as appropriate. Written comments from Education and the Trust 

are reproduced in appendices V and VI, respectively, and are also 

summarized below. The District did not provide written comments on the 

draft report. In its comments, Education did not indicate agreement or 

disagreement with our recommendations. The Trust generally agreed with 

our recommendations, but disagreed with some of the findings. Both 

Education and the Trust provided additional information on issues raised 

in the report.

In its letter, Education stated that it took the issues raised in the GAO 

report seriously and would continue to consider them carefully, but noted 

that the report did not fully reflect the Trust’s efforts to provide complete 

and timely information about participating schools to OSP families. 

However, in our final report, we discuss a number of different ways in 

which the Trust provides information and assistance to current and 

prospective OSP families, and we believe we adequately reflected the 

Trust’s efforts. Education also noted that the report does not fully 

recognize the significant staff turnover in leadership at the Trust, which 

affected several aspects of the Trust’s implementation of the program in 

school year 2012-2013. We recognize that the Trust faced a number of 

challenges as it assumed responsibility for the program. However, several 

issues that we identified in the report are not new, but rather contribute to 

long-standing weaknesses in internal controls and oversight of the 

program. Therefore, we believe that if Education had provided more 

effective oversight of the program and more timely technical assistance to 

the Trust, many of the challenges identified in the report could have been 

addressed sooner. In addition, more effective internal controls, including 

robust policies and procedures for program administration and school 

oversight, could have helped to smooth the difficulties associated with the 

transition in leadership and program administration.

The Trust disagreed with our finding that its Participating School Directory 

provided incomplete and untimely information. More specifically, in its 

comments, the Trust emphasized that this condition does not exist under 

the current management and administration of OSP and that the Trust 

provides information through a comprehensive array of tools, events, and 

individualized assistance. We acknowledge the substantial change in staff 

that occurred at the Trust and discuss in our report the number of ways in 

which the Trust provides assistance to families through channels other 

Agency Comments 

and Our Evaluation
 

Page 39 GAO-13-805 District of Columbia Opportunity Scholarship Program

than the Directory. However, the most recent Directory—a key source of 

school information for families—was still published too late and contained 

incomplete information about tuition, fees, and accreditation. Education’s 

written comments focus on the Trust making a deliberate decision to 

maintain a reasonably sized, user-friendly directory with straightforward 

information on average tuition and fees and on the efforts of the Trust to 

provide individualized ongoing assistance to families and assistance 

through school placement fairs. We agree that the Directory must be 

prepared for a non-technical audience, but continue to believe that for a 

program predicated on choice, it is imperative that the Trust provide 

families with complete and timely information needed to make informed 

decisions, especially with respect to tuition and fees. The Trust could 

accomplish this without overburdening families with excessive information 

by using a general notation for schools that have discounted or different 

tuition rates, as the Trust noted in its written comments, or providing a 

range of the potential total cost of attendance for families. As the Trust 

indicated in its letter, it could also include more accurate notation of 

school-accrediting bodies. We support the Trust’s efforts to update the 

Directory for future school years by including more complete information 

for OSP families.

In addition, in its comments, Education noted that substantial changes in 

the Trust’s staff and leadership transition affected the timing of the Trust’s 

site visits at participating schools. As we discuss in our report, these 

circumstances resulted in site visits occurring later in the year, which in 

turn affected the timeliness of the Directory’s publication. We 

acknowledge that this is not a routine practice of the Trust and encourage 

the Trust to continue to work toward conducting these site visits earlier in 

the school year and publishing the Directory earlier. We also support 

Education’s plans to work with the Trust to provide the Directory prior to 

participating schools’ application deadlines. The plan to publish the 

Directory by December 2013 for the 2013-2014 school year, and by 

November in future school years, represents a marked improvement in 

the timeliness of the school directories. However, we maintain that 

families need to have information about schools prior to participating 

schools’ application deadlines. We encourage Education and the Trust to 

consider publishing the Directory earlier than November or December to 

help families start making school decisions as early as possible in the 

scholarship application process, ensuring that families have the full range 

of school options available to them. 

In response to GAO’s finding regarding the misalignment of scholarship 

awards with participating schools’ admissions and enrollment schedules, 
 

Page 40 GAO-13-805 District of Columbia Opportunity Scholarship Program

Education expressed concern that an earlier scholarship lottery date 

could, among other things, result in the Trust conducting less outreach to 

potential applicants. We acknowledge the steps that Education identified 

the Trust needs to take prior to the lottery, such as screening applications 

for eligibility, conducting multiple rounds of baseline testing, and ensuring 

that the lottery pool of eligible applicants is sufficient so that the 

evaluation can proceed with the necessary sample size. Education stated 

that the Trust would need to submit a proposal to Education if it wanted to 

use a different approach for screening student eligibility, such as using a 

different year’s income information, that could help expedite the steps 

leading up to the lottery. We support Education’s consideration of any 

proposal to use a different approach that would ultimately enable the 

Trust to award scholarships earlier and ensure that OSP families have the 

widest range of choice possible, and we would encourage the Trust to 

fully consider the issues, and if it deems it appropriate, develop such a 

proposal for Education’s consideration. 

The Trust also disagreed with our finding regarding its lack of policies and 

procedures for implementing and overseeing OSP, stating that its policies 

and procedures manual clearly and accurately reflects the policies and 

procedures governing the program. Further, the Trust stated that although 

amendments to the policies and procedures regarding allocation of costs 

and reconciliation were codified in August 2013, these policies were in 

practice prior to that date. GAO applauds the Trust’s efforts to increase 

oversight of participating schools and update their policies and 

procedures accordingly. Despite the Trust’s claims that these policies and 

procedures were already in practice, GAO does not consider these 

policies and procedures fully implemented until these activities take place 

on a regular basis. In addition, the Trust’s revised policies and procedures 

do not address all of the weaknesses for which GAO recommended 

action, such as developing a process for addressing schools that are 

noncompliant with program requirements. Education commented that the 

Trust’s proposed revisions to the letter of agreement with participating 

schools reserves the Trust’s right to limit or suspend a school’s 

participation in OSP and that any OSP schools that require further 

discussion about compliance would be handled on a case-by-case basis. 

However, we continue to believe that the Trust needs to develop a more 

clearly defined, comprehensive written policy to address schools that are 

noncompliant. 

With regard to weaknesses GAO identified in the structure of the Trust’s 

database, the Trust stated they would take GAO’s comments under 

advisement and consider key changes and improvements. The Trust 
 

Page 41 GAO-13-805 District of Columbia Opportunity Scholarship Program

stated that the database is proficient in areas such as determining student 

eligibility, student invoicing, school oversight documentation tracking, and 

notation of communication with individual families and schools. The Trust 

also noted that they must use outside spreadsheets to complete any 

reporting on historical information about the program, and that automated 

checks do not exist, but the database does not impede data collection or 

identification of student sub-groups for inclusion in the scholarship lottery 

(referred to in this report as “priority categories”). Based on our review, 

we continue to believe that the Trust’s ability to determine the third priority 

category described in the SOAR Act—applicants who received an OSP 

scholarship award in a previous year but did not use it—is questionable 

because, according to GAO’s analysis, a key variable in the database 

used to determine this priority category is not reliable.

As agreed with your office, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days from its 

issue date. At that time, we will send copies of this report to relevant 

congressional committees, the Secretary of Education, the Mayor of the 

District of Columbia, the Executive Director of the District of Columbia 

Children and Youth Investment Trust Corporation, and other interested 

parties. In addition, the report will be available at no charge on GAO’s 

web site at http://www.gao.gov. 

If you or your staff should have any questions about this report, please 

contact me at (202) 512-7215 or scottg@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix VII. 

Sincerely yours,

George A. Scott

Director, Education, Workforce, 

 and Income Security Issues
Appendix I: Scope and Methodology

Page 42 GAO-13-805 District of Columbia Opportunity Scholarship Program

We reviewed relevant federal and District laws and regulations and 

analyzed key documents from the DC Children and Youth Investment 

Trust Corporation (Trust), the federal Department of Education 

(Education), and participating schools, as well as generally accepted 

guiding documents for internal controls including those published by GAO 

and the Committee of Sponsoring Organizations of the Treadway 

Commission (COSO).1

We conducted this performance audit from May 2012 to September 2013 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings based 

on our audit objectives.

We also conducted site visits at 10 of the 53 

participating private schools in the program and interviewed relevant 

school officials. In addition, we conducted two discussion groups—one in 

English and one in Spanish—with parents and guardians of students who 

received and used an Opportunity Scholarship Program (OSP) 

scholarship in the 2012-2013 school year. We also interviewed key 

officials at the Trust, Education, and select agencies in the District, as 

well as representatives of accreditation organizations and nonprofit tuition 

assistance organizations. In addition, we analyzed the structure of the 

Trust’s database and the Trust’s program data.

To determine the types of information available to families and the types 

of schools participating in OSP, we reviewed the Trust’s Participating 

School Directory (the Directory) for school years 2010-2011, 2011-2012, 

and 2012-2013. We also reviewed the list of participating schools

available to families at the beginning of the 2012-2013 school year and 

compared it to the Directory when it was issued in May 2013 to determine 

if there were any discrepancies. We also examined OSP application 

materials as well as documents given to OSP families at the 10 

participating schools we visited. These documents included application 

materials, tuition and fees information, and notices sent to families, such 

 

1

We used the COSO internal control framework as opposed to GAO’s Standards for 

Internal Control in the Federal Government (Green Book) to assess internal controls 

because the Trust is a non-profit organization and the Green Book primarily applies to 

federal agencies.

Appendix I: Scope and Methodology

Review of Program 

Documents
Appendix I: Scope and Methodology

Page 43 GAO-13-805 District of Columbia Opportunity Scholarship Program

as school newsletters and notices about safety incidents occurring in and 

around the school.

To determine the types of information participating schools submit to the 

Trust, we reviewed schools’ Key School Data Forms. These forms include 

information on a school’s enrollment, facilities, number of days of 

instruction, curriculum, and services offered and are used by the Trust to 

compile the Directory. We also reviewed schools’ Tuition and Fees forms 

to estimate a student’s total cost of attendance. Given the variation in 

fees among participating schools, we estimated the total cost of 

attendance using several assumptions, such as full-time attendance for 

one school year for a new OSP student. We also used information 

provided by schools about their admissions requirements and deadlines 

to determine how their application deadlines aligned with scholarship 

award timeframes implemented by the Trust.

To determine the extent to which the Trust implemented internal controls 

over financial transactions and program administration, we reviewed the 

Trust’s financial management policies and procedures. We also reviewed 

the Trust’s financial statements, schedule of expenditures of federal 

awards, and independent auditors’ reports required by government 

auditing standards and OMB Circular A-133 for the year ending 

September 30, 2010. In addition, we reviewed the Trust’s administrative 

expense report and copies of monthly and annual bank reconciliations 

and reviewed relevant federal laws and regulations. To determine the 

roles and responsibilities of the Trust, Education, and the District, we 

examined the grant transfer agreement between the Trust, the 

Washington Scholarship Fund, and Education; the memorandum of 

understanding between Education and the District of Columbia 

Government; and the cooperative agreement between Education and the 

Trust.

To determine the Trust’s assessment of participating schools’ financial 

stability, we reviewed fiscal year end 2010-2012 financial statements and 

other documentation submitted by schools, such as management letters 

and reports. We also reviewed forms submitted by schools, such as the 

School Participation Verification Forms, to determine the mechanism by 

which schools attest to the veracity of the information they submit. In 

addition, we reviewed COSO’s standards for internal controls for nonfederal entities.
Appendix I: Scope and Methodology

Page 44 GAO-13-805 District of Columbia Opportunity Scholarship Program

To determine several aspects of the Trust’s administration of OSP, we 

requested program data from the Trust, including participating school 

characteristics, OSP student enrollment at participating schools, student 

eligibility determination, scholarship payments, and student 

characteristics, including the priority categories for awarding scholarships 

as stated in the SOAR Act. We received program data from the 2004-

2005 school year, the first year in which the program was administered by 

the Washington Scholarship Fund, to the 2011-2012 school year. We 

assessed the reliability of the data through performing electronic testing 

for obvious errors in accuracy and completeness and interviewing agency 

officials knowledgeable about the data. We found substantial problems 

with the data, including missing fields or partially entered applications. As 

we previously stated in this report, the lack of documentation for the 

database made it difficult to understand which fields were current or still in 

use. As a result, we limited the scope of our analyses to data from the 

2011-2012 school year, the most recent and complete year of data 

available at the time of our review. We determined that these data were 

sufficiently reliable for the purposes of our report.

The Trust did not have a documented query or process to determine the 

number of OSP students enrolled at each participating school. Following 

the instructions from the Trust’s data contractor, we initially determined 

the number of OSP students at each school by using variables 

representing the year, student and school identifiers, student school 

placement, and the number of days the student was enrolled. We found, 

however, that there was an extensive number of missing values for 

several of the key variables needed to complete this analysis. As a result, 

we determined that we could not use this method of calculating OSP 

enrollment. Instead, we calculated OSP enrollment by using a count of 

student identifiers by school and payment information.2

Under the SOAR Act, Education is required to give priority to grantee 

applicants that will most effectively give priority to:

We also analyzed 

OSP student enrollment by race and ethnicity to determine the 

demographic characteristics of OSP students enrolled at each 

participating school.

 

2 We considered three alternatives to determine OSP student enrollment: (1) a count of 

student identifiers and student placement in a school; (2) a count of student identifiers and 

payment information; and (3) a count of student identifiers by school and payment 

information. We ultimately used the third approach.

Analysis of Program Data 

from the OSP Database

OSP Student Enrollment

Priority Categories for 

Awarding OSP Scholarships
Appendix I: Scope and Methodology

Page 45 GAO-13-805 District of Columbia Opportunity Scholarship Program

1. Students who, in the preceding year, attended a public school in the 

District that was identified as a school in need of improvement, 

corrective action, or restructuring under the Elementary and 

Secondary Education Act of 1965, as amended.

2. Students who previously were awarded a scholarship in a preceding 

year but have not used the scholarship, specifically emphasizing 

students that were awarded a scholarship for the first time in 2009-

2010, when the 216 new scholarships awarded that year were 

rescinded by the Department of Education.

3. Students that have a sibling participating in OSP.

To assess the Trust’s application of these priority groups for the 2011-

2012 school year, we attempted to replicate the Trust’s process for 

determining the number of students in each priority group. Since the Trust 

has not documented these processes, we determined the number of 

students in two of these priority groups—those attending a school 

identified for improvement and those with a sibling in the program—using 

detailed queries and clarifications from the Trust’s contractor. Despite 

employing several different approaches, our results did not corroborate 

the Trust’s results for these two categories. We were unable to determine 

a reliable number of students in the third priority group—those who were 

previously awarded a scholarship but had not used it. We found that one 

of the key variables Trust officials use to determine this category was 

unreliable. As a result, we could not use other variables in its place to 

reliably determine the number of students belonging in this group.

To review aspects of participating schools’ compliance with program rules 

and regulations, as well as their admissions and enrollment processes, 

we conducted site visits to 10 participating schools (see table 2). During 

these visits, we interviewed key school officials; reviewed documents, 

including certificates of occupancy, health certificates, and teacher 

credentials; and toured school facilities. We also interviewed finance 

officers at these schools to determine the schools’ financial stability and 

the types of financial information schools submit to the Trust.

We selected a nongeneralizable sample of 10 schools to visit based on 

two criteria: (1) the percentage of OSP students enrolled and (2) the 

largest number of OSP students enrolled. Using this approach allowed us 

to visit schools that potentially were almost entirely funded by OSP 

scholarships as well as schools that were receiving the most absolute 

OSP dollars. We used student enrollment data obtained from the Trust for 

Site Visits to Participating 

Schools 

Site Visit Selection Criteria
Appendix I: Scope and Methodology

Page 46 GAO-13-805 District of Columbia Opportunity Scholarship Program

the most recent school year available (2011-2012) as well as information 

from the 2011-2012 Directory.3

Using these criteria, we determined the sample of 10 schools to visit by 

selecting 5 schools with the highest concentration of OSP students 

relative to the total school enrollment and 5 schools with the highest 

number of OSP students, as shown in table 2.

Table 2: GAO Site Visit Priorities Based on Student Enrollment Criteria, School Year 

2011-2012

OSP school name

OSP students 

as percentage 

of enrollment

Total OSP 

enrollment

Total 

school 

enrollment

1 Academia de la Recta Porta 

International Christian Day 

School 108 a 54 50 

2 Academy for Ideal Education 93 67 72

3 Preparatory School of DC 88 79 90

4 The Bridges Academy 86 98 114

5 Roots Activity Learning Center 82 14 17

6 Archbishop Carroll High School 37 164 449

7 Calvary Christian Academy 62 124 201

8 St. Augustine Catholic School 49 102 207

9 St. Francis Xavier Catholic School 44 96 220

10 St. Thomas More Academy 57 94 165

Source: GAO analysis of DC Child and Youth Investment Trust Corporation program data.

a

As we previously explained, given the Trust’s lack of a documented process for determining OSP 

enrollment at participating schools, we determined the number of OSP students enrolled based on 

whether the student was placed at each school and whether or not a payment was made. Based on 

this approach, the number of OSP students enrolled at this school exceeded the number of total 

students enrolled.

In order to develop these criteria, we made multiple requests for 

information from the Trust and made several clarifying inquiries to ensure 

 

3 The Trust had some combined student enrollment data for three schools with multiple 

campuses including Dupont Park Adventist School (Alabama Avenue and Massachusetts 

Avenue locations), Washington International School (Primary and Tregaron campuses), 

and Washington Middle School for Girls (THEARC and Washington View campuses). In 

these instances, we treated these individual campuses as one school. 
Appendix I: Scope and Methodology

Page 47 GAO-13-805 District of Columbia Opportunity Scholarship Program

the accuracy of our approach. After we completed this analysis, through 

the course of additional interviews with the Trust, we learned there were 

some additional types of records in the Trust’s database that we needed 

to exclude to execute a more exact query for OSP enrollment. However, 

we received this information several months after nearly all the site visits 

were conducted.

To provide balance, we also spoke with National Presbyterian School and 

Aidan Montessori School—two schools that historically had few or zero 

OSP students enrolled—to determine what factors impact their interest 

and ability to enroll OSP students. We selected these schools based on 

our analysis of the Trust’s 2011-2012 data on the number of OSP 

students enrolled at participating schools.

To better understand families’ experiences with OSP, we conducted two 

semi-structured discussion groups with parents and guardians of students 

who received and used an OSP scholarship in the 2012-2013 school 

year. To ensure we had a diverse group of parents, we conducted one 

group in English and one group in Spanish. The Trust recruited parents 

and guardians to participate in these groups by randomly selecting 75 to 

100 English-speaking and Spanish-speaking parents/guardians. Of these 

randomly selected parents and guardians, 14 participated in these 

discussion groups. Although asking the program administrator to recruit 

participants may result in a biased group of participants, the Trust staff 

knew this population best and could most effectively reach out to this 

group. As a result, the extent to which these participants represent all 

OSP families is unclear, and the results of these discussion groups are 

not generalizable to the entire population of OSP families.

The Trust e-mailed letters written by GAO in both English and Spanish to 

parents explaining the purpose of the discussion groups and encouraging 

their participation. Two discussion groups were held in December 2012 

and were about 1 to 2 hours in length. To ensure participants’ privacy, 

parents and guardians were asked to use alternate first names during the 

discussion.

In each of the discussion groups, we covered the following topics:

• reasons why parents were drawn to the OSP;

• how they found out about the program;

Discussion Groups with 

Parents and Guardians of 

OSP Students
Appendix I: Scope and Methodology

Page 48 GAO-13-805 District of Columbia Opportunity Scholarship Program

• the school selection and application process; and

• their children’s experience at their OSP schools.

Following the discussion group, we asked participants to provide us with 

some basic background information in a short voluntary questionnaire. 

Thirteen of the 14 participants completed the questionnaire, which we 

provided in both English and Spanish. After we conducted the groups, we 

obtained transcripts of both groups to ensure the accuracy of the groups’ 

discussions. For the discussion group conducted in Spanish, we obtained 

a transcript in Spanish as well as a translation in English to ensure the 

accuracy of the translation.

We interviewed officials at the Trust to determine how they administered 

OSP, their relationship with Education and the District, and their internal 

control activities. During one of these interviews with Trust officials, we 

conducted a walk-through where Trust staff demonstrated how they enter 

and maintain their database. To better understand how the Trust 

manages its database, we interviewed Trust officials and the Trust’s 

contractor, who is responsible for maintaining the database. To determine 

Education’s role in OSP and their relationship with OSP and the Trust, we 

interviewed officials at Education’s Office of Innovation and Improvement 

and Institute of Education Sciences. To understand the scholarship lottery 

process and how OSP is evaluated, we interviewed officials from 

Education and Westat, the contractor responsible for conducting the 

lottery. To understand the relationship between the District, Education, 

and the Trust, and to specifically understand the execution of the MOU, 

we interviewed officials at key agencies in the District, such as the Office 

of Deputy Mayor for Education and the Office of the State Superintendent 

for Education. We also requested and received written responses to key 

questions from certain District agencies, including the Department of 

Health, the Department of Consumer and Regulatory Affairs, and the Fire 

and Emergency Medical Services Department. To determine the 

significance and role of accreditation, we spoke with representatives from 

Middle States Association of Colleges and Schools Commissions on

Elementary and Secondary Schools, Association of Independent 

Maryland & DC Schools, and AdvancED. We also spoke with 

Independent Education, an association of private independent Districtarea schools that requires its member schools to be accredited. To better 

understand the role played by nonprofit organizations that provide 

additional private school tuition assistance, we interviewed 

representatives from the Archdiocese of Washington, Latino Student 

Interviews 
Appendix I: Scope and Methodology

Page 49 GAO-13-805 District of Columbia Opportunity Scholarship Program

Fund, Capital Partners for Education, and the Jack Kent Cooke 

Foundation’s Young Scholars Program.
Appendix II: Schools That Agreed to Accept 

Students in the District’s Opportunity 

Scholarship Program in School Years 2010-

2011 and 2011-2012 (“Participating Schools”)

Page 50 GAO-13-805 District of Columbia Opportunity Scholarship Program

School name

Agreed to 

participate in OSP in 

2010-2011 school 

year

Agreed to 

participate in OSP in 

2011-2012 school 

year

Academia De La Recta Porta 

International Christian Day School

X X 

Academy for Ideal Education X X 

Adventureland School X 

Aidan Montessori School X X 

Annunciation Catholic School X X 

Archbishop Carroll High School X X 

Beauvoir – National Cathedral 

Elementary School

X X

Bishop John T. Walker School for Boys X X 

Blessed Sacrament School X X 

The Bridges Academy X X 

Calvary Christian Academy X X 

Capitol Hill Day School X X 

Christian Family Montessori School X 

Cornerstone School X X 

Dupont Park Adventist School X X

Edmund Burke School X X 

Emerson Preparatory School X X 

Georgetown Day School X X 

Georgetown Visitation Preparatory 

School

X X 

Gonzaga College High School X X 

Holy Trinity School X X 

Howard University Early Learning 

Program 

X X 

Kingsbury Day School X X 

Kuumba Learning Center (MLK Campus) X X 

Little Flower Montessori School X X 

Lowell School X X 

Metropolitan Day School X X 

The Monroe School X X 

Muhammad University of Islam X X 

Nannie Helen Burroughs School X X 

Appendix II: Schools That Agreed to Accept 

Students in the District’s Opportunity Scholarship 

Program in School Years 2010-2011 and 2011-2012 

(“Participating Schools”)
Appendix II: Schools That Agreed to Accept 

Students in the District’s Opportunity 

Scholarship Program in School Years 2010-

2011 and 2011-2012 (“Participating Schools”)

Page 51 GAO-13-805 District of Columbia Opportunity Scholarship Program

School name

Agreed to 

participate in OSP in 

2010-2011 school 

year

Agreed to 

participate in OSP in 

2011-2012 school 

year

National Cathedral School X X 

National Presbyterian School X X 

Naylor Road School X X 

Our Lady of Victory School X X 

Parkmont School X 

Preparatory School of DC X X 

Randall Hyland Private School X X 

Roots Activity Learning Center X X 

Sacred Heart School X X 

San Miguel School X X 

Sheridan School X X 

Sidwell Friends School X X 

St. Albans School X X 

St. Ann’s Academy X X 

St. Anselm’s Abbey School X X 

St. Anthony School X X 

St. Augustine School X X 

St. Francis Xavier Academy X X 

St. John’s College High School X X 

St. Peter School X X 

St. Thomas More Academy X X 

Washington International School X X 

Washington Jesuit Academy X X 

Washington Middle School for Girls 

(THEARC & Washington View 

Campuses)

X X 

Total number of participating schools 52 53

Source: District of Columbia Children and Youth Investment Trust Corporation.
Appendix III: Total School and OSP 

Enrollment, School Year 2011-2012

Page 52 GAO-13-805 District of Columbia Opportunity Scholarship Program

School name

Grades 

served

Total school 

enrollment 

Total OSP 

students

Academia De La Recta Porta Intl Christian 

Day School

K-12 50 54

Academy for Ideal Education K-12 72 67

Aidan Montessori School PK-6 199 0 

Annunciation Catholic School PK-8 139 34

Archbishop Carroll High School 9-12 449 164

Beauvoir-National Cathedral Elem. School PK-3 400 1 

Bishop John T. Walker School for Boys PK-2 55 9 

Blessed Sacrament School K-8 516 9 

The Bridges Academy PK-8 114 98

Calvary Christian Academy K-8 201 124

Capitol Hill Day School PK-8 212 2 

Christian Family Montessori School PK-6 102 0 

Cornerstone School PK-10 149 66

Dupont Park Adventist School PK-10 a 203 86

Edmund Burke School 6-12 277 4 

Emerson Preparatory School 9-12 43 15

Georgetown Day School PK-12 1075 1 

Georgetown Visitation Preparatory School 9-12 490 4 

Gonzaga College High School 9-12 957 8 

Holy Trinity School PK-8 343 7 

Howard University Early Learning Program PK-K 44 0 

Kingsbury Day School K-12 223 14

Kuumba Learning Center (MLK Campus) PK-8 48 15

Little Flower Montessori School PK-K 20 0 

Lowell School PK-7 300 1 

Metropolitan Day School PK-5 52 25

The Monroe School 6-12 38 5 

Muhammad University of Islam K-10 53 22

Nannie Helen Burroughs School PK-6 54 33

National Cathedral School 4-12 583 2 

National Presbyterian School PK-6 276 0 

Naylor Road School K-8 110 66

Our Lady of Victory School PK-8 202 17

Parkmont School 6-12 39 13

Appendix III: Total School and OSP 

Enrollment, School Year 2011-2012
Appendix III: Total School and OSP 

Enrollment, School Year 2011-2012

Page 53 GAO-13-805 District of Columbia Opportunity Scholarship Program

School name

Grades 

served

Total school 

enrollment 

Total OSP 

students

Preparatory School of DC PK-11 90 79

Randall Hyland Private School PK-K 20 1 

Roots Activity Learning Center 1-8 17 14

Sacred Heart School PK-8 199 83

San Miguel School 6-8 61 21

Sheridan School K-8 228 1 

Sidwell Friends School PK-12 1108 10

St. Albans School 4-12 578 5 

St. Ann’s Academy PK-8 187 59

St. Anselm’s Abbey School 6-12 231 6 

St. Anthony School PK-8 217 57

St. Augustine School PK-8 207 102

St. Francis Xavier Academy PK-8 220 96

St. John’s College High School 9-12 1044 32

St. Peter School PK-8 227 9 

St. Thomas More Academy PK-8 165 94

Washington International School PK-12 b 910 0 

Washington Jesuit Academy 6-8 78 9 

Washington Middle School for Girls 4-8 c 101 39

Source: GAO analysis of DC Children and Youth Investment Trust Corporation program data.

a

Dupont Park Adventist School has two campuses: Alabama Ave (grades PK-5) and Massachusetts 

Ave (grades 6-10).

b

Washington International School has two campuses: Primary School Campus (grades PK-5) and 

Tregaron Campus (grades 6-12).

c

Washington Middle School for Girls has two campuses: THEARC Campus (grades 6-8) and 

Washington View Campus (grades 4-5).
Appendix IV: Internal Control Frameworks

Page 54 GAO-13-805 District of Columbia Opportunity Scholarship Program

Internal control is broadly defined as a process, effected by an entity’s 

board of directors, management and other personnel, designed to provide 

reasonable assurance regarding the achievement of objectives in the 

following categories:

• effectiveness and efficiency of operations,

• reliability of financial reporting, and

• compliance with applicable laws and regulations.

According to the Committee of Sponsoring Organizations of the Treadway 

Commission (COSO),1

• Control Environment: The control environment sets the tone of an 

organization, influencing the control consciousness of its people. It is 

the foundation for all other components of internal control, providing 

discipline and structure. Control environment factors include the 

integrity, ethical values and competence of the entity’s people; 

management’s philosophy and operating style; the way management 

assigns authority and responsibility, and organizes and develops its 

people; and the attention and direction provided by the board of 

directors. The control environment has a pervasive influence on the 

way business activities are structured, objectives established and 

risks assessed. It also influences control activities, information and 

communication systems, and monitoring activities. This is true not 

only of their design, but also the way they work day to day. The 

control environment is influenced by the entity’s history and culture. It 

influences the control consciousness of its people. Effectively 

controlled entities strive to have competent people, instill an 

enterprise-wide attitude of integrity and control consciousness, and 

the five components of internal control for 

businesses and other entities are:

 

1 Committee of Sponsoring Organizations of the Treadway Commission, Internal 

Control—Integrated Framework (1992). COSO was formed in 1985 to sponsor the 

National Commission on Fraudulent Financial Reporting, an independent, private-sector 

initiative that studied the causal factors that can lead to fraudulent financial reporting and 

developed recommendations for public companies and their independent auditors; the 

U.S. Securities and Exchange Commission and other regulators; and educational 

institutions. In 1992, COSO issued Internal Control—Integrated Framework to help 

businesses and other entities assess and enhance their internal control. Since that time, 

COSO’s internal control framework has been recognized by regulatory standards setters 

and others as a comprehensive framework for evaluating internal control, including 

internal control over financial reporting.

Appendix IV: Internal Control Frameworks
Appendix IV: Internal Control Frameworks

Page 55 GAO-13-805 District of Columbia Opportunity Scholarship Program

set a positive “tone at the top.” They establish appropriate policies and 

procedures, often including a written code of conduct, which foster 

shared values and teamwork in pursuit of the entity’s objectives.

• Risk Assessment: Every entity faces a variety of risks from external 

and internal sources that must be assessed. A precondition to risk 

assessment is establishment of objectives, linked at different levels 

and internally consistent. Risk assessment is the identification and 

analysis of relevant risks to achievement of the objectives, forming a 

basis for determining how the risks should be managed. Because 

economic, industry, regulatory and operating conditions will continue 

to change, mechanisms are needed to identify and deal with the 

special risks associated with change. All entities, regardless of size, 

structure, nature or industry, encounter risks at all levels within their 

organizations. Risks affect each entity’s ability to survive; successfully 

compete within its industry; maintain its financial strength and positive 

public image; and maintain the overall quality of its products, services 

and people. There is no practical way to reduce risk to zero. Indeed, 

the decision to be in business creates risk. Management must 

determine how much risk is to be prudently accepted, and strive to 

maintain risk within these levels. Objective setting is a precondition to 

risk assessment. There must first be objectives before management 

can identify risks to their achievement and take necessary actions to 

manage the risks. Objective setting, then, is a key part of the 

management process. While not an internal control component, it is a 

prerequisite to and enabler of internal control. This chapter first 

discusses objectives, followed by the discussion of risks.

• Control Activities: Control activities are policies and procedures, 

which are the actions of people to implement the policies, to help 

ensure that management directives identified as necessary to address 

risks are carried out. They help ensure that necessary actions are 

taken to address risks to achievement of the entity’s objectives. 

Control activities occur throughout the organization, at all levels and in 

all functions. They include a range of activities including approvals, 

authorizations, verifications, reconciliations, reviews of operating 

performance, security of assets and segregation of duties. Control 

activities can be divided into three categories, based on the nature of 

the entity’s objectives to which they relate: operations, financial 

reporting, or compliance. Although some controls relate solely to one 

area, there is often overlap. Depending on circumstances, a particular 

control activity could help satisfy entity objectives in more than one of 

the three categories. For example, operations controls also can help 

ensure reliable financial reporting and financial reporting controls can 
Appendix IV: Internal Control Frameworks

Page 56 GAO-13-805 District of Columbia Opportunity Scholarship Program

serve to effect compliance. Although these categories are helpful in 

discussing internal control, the particular category in which a control 

happens to be placed is not as important as the role it plays in 

achieving a particular activity’s objectives.

• Information and Communication: Pertinent information must be 

identified, captured and communicated in a form and time frame that 

enables people to carry out their responsibilities. Information systems 

produce reports, containing operational, financial and compliancerelated information, that make it possible to run and control the 

business. They deal not only with internally generated data, but also 

information about external events, activities and conditions necessary 

to informed business decision-making and external reporting. 

Effective communication also must occur in a broader sense, flowing 

down, across and up the organization. All personnel must receive a 

clear message from top management that control responsibilities must 

be taken seriously. They must understand their own role in the 

internal control system, as well as how individual activities relate to 

the work of others. They must have a means of communicating 

significant information upstream. There also needs to be effective 

communication with external parties, such as customers, suppliers, 

regulators and shareholders. Every enterprise must capture pertinent 

information, financial and non-financial, relating to external as well as 

internal events and activities. The information must be identified by 

management as relevant to managing the business. It must be 

delivered to people who need it in a form and timeframe that enables 

them to carry out their control and other responsibilities.

• Monitoring: Internal control systems need to be monitored, a process 

that assesses the quality of the system’s performance over time. This 

is accomplished through ongoing monitoring activities, separate 

evaluations or a combination of the two. Ongoing monitoring occurs in 

the course of operations. It includes regular management and 

supervisory activities, and other actions personnel take in performing 

their duties. The scope and frequency of separate evaluations will 

depend primarily on an assessment of risks and the effectiveness of 

ongoing monitoring procedures. Internal control deficiencies should be 

reported upstream, with serious matters reported to top management 

and the board. Internal control systems change over time. The way 

controls are applied may evolve. Once-effective procedures can 

become less effective, or perhaps are no longer performed. This can 

be due to the arrival of new personnel, the varying effectiveness of 

training and supervision, time and resource constraints or additional 

pressures. Furthermore, circumstances for which the internal control 
Appendix IV: Internal Control Frameworks

Page 57 GAO-13-805 District of Columbia Opportunity Scholarship Program

system originally was designed also may change, causing it to be less 

able to warn of the risks brought by new conditions. Accordingly, 

management needs to determine whether the internal control system 

continues to be relevant and able to address new risks. Monitoring 

ensures that internal control continues to operate effectively. This 

process involves assessment by appropriate personnel of the design 

and operation of controls on a suitably timely basis, and the taking of 

necessary actions. It applies to all activities within an organization, 

and sometimes to outside contractors as well. For example, with 

outsourcing of health claims processing to a third-party administrator, 

and such processing directly affects benefits’ costs, the entity will 

want to monitor the functioning of the administrator’s activities and 

controls.

GAO Standards for Internal Control2

• Control Environment: Management and employees should establish 

and maintain an environment throughout the organization that sets a 

positive and supportive attitude toward internal controls and 

conscientious management. A positive control environment is the 

foundation for all other standards. Several key factors affect the 

control environment including the integrity and ethical values 

maintained and demonstrated by management and staff, 

management’s commitment to competence, and philosophy and 

operating style. In addition, the agency’s organizational structure and 

the manner in which the agency delegates authority and responsibility 

throughout the organization affect the control environment. Good 

human capital policies and practices are another critical 

environmental factor. A final factor affecting the control environment is 

the agency’s relationship with Congress and central oversight 

agencies such as the Office of Management and Budget. Congress 

mandates the programs that agencies undertake and monitors their 

progress and central agencies provide policy and guidance on many 

different matters. In addition, Inspectors General and internal senior 

management councils can contribute to a good overall control 

environment.

for federal agencies also comprise 

the five standards of internal control:

 

2 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1. 

(Washington, D.C.: November 1999).
Appendix IV: Internal Control Frameworks

Page 58 GAO-13-805 District of Columbia Opportunity Scholarship Program

• Risk Assessment: Internal control should provide for an assessment 

of the risks the agency faces from both external and internal sources. 

A precondition to risk assessment is the establishment of clear, 

consistent agency objectives. Risk assessment is the identification 

and analysis of relevant risks associated with achieving the 

objectives, such as those defined in strategic and annual performance 

plans developed under the Government Performance and Results 

Act, and forming a basis for determining how risks should be 

managed. Management needs to comprehensively identify risks using 

methods such as qualitative and quantitative ranking activities, 

management conferences, forecasting and strategic planning, and 

consideration of findings from audits and other assessments. Once 

risks have been identified, they should be analyzed for their possible 

effect. Because governmental, economic, industry, regulatory, and 

operating conditions continually change, mechanisms should be 

provided to identify and deal with any special risks prompted by such 

changes.

• Control Activities: Internal control activities help ensure that 

management’s directives are carried out. The control activities should 

be effective and efficient in accomplishing the agency’s control 

objectives. Control activities are policies, procedures, techniques, and 

mechanisms that enforce management’s directives, such as the 

process of adhering to requirements for budget development and 

execution. They help ensure that actions are taken to address risks. 

Control activities are an integral part of an entity’s planning, 

implementing, reviewing, and accountability for stewardship of 

government resources and achieving effective results. Control 

activities occur at all levels and functions of the entity. They include a 

wide range of diverse activities such as approvals, authorizations, 

verifications, reconciliations, performance reviews, maintenance of 

security, and the creation and maintenance of related records which 

provide evidence of execution of these activities as well as 

appropriate documentation. Control activities may be applied in a 

computerized information system environment or though manual 

processes. Activities may be classified by specific control objectives, 

such as ensuring completeness and accuracy of information 

processing. Examples of control activities include top level reviews of 

actual performance, reviews by management at the functional or 

activity level, management of human capital, controls over information 

processing, physical control over vulnerable assets, establishment 

and review of performance measures and indictors, segregation of 

duties, proper execution of transactions and events, accurate and 

timely recording of transactions and events, access restrictions to and 
Appendix IV: Internal Control Frameworks

Page 59 GAO-13-805 District of Columbia Opportunity Scholarship Program

accountability for resources and records, and appropriate 

documentation of transactions and internal control.

• Information and Communications: Information should be recorded 

and communicated to management and others within the entity who 

need it and in a form and within a time frame that enables them to 

carry out their internal control and other responsibilities. For an entity 

to run and control its operations, it must have relevant, reliable, and 

timely communications relating to internal as well as external events. 

Information is needed throughout the agency to achieve all of its 

objectives. Program managers need both operational and financial 

data to determine whether they are meeting their agencies’ strategic 

and annual performance plans and meeting their goals for 

accountability for effective and efficient use of resources. For 

example, operating information is required for development of 

financial reports. This covers a broad range of data from purchases, 

subsidies, and other transactions to data on fixed assets, inventories, 

and receivables. Operating information is also needed to determine 

whether the agency is achieving its compliance requirements under 

various laws and regulations. Financial information is needed for both 

external and internal uses. It is required to develop financial 

statements for periodic external reporting, and, on a day-to-day basis, 

to make operating decisions, monitor performance, and allocate 

resources. Pertinent information should be identified, captured, and 

distributed in a form and time frame that permits people to perform 

their duties efficiently. Effective communications should occur in a 

broad sense with information flowing down, across, and up the 

organization. In addition to internal communications, management 

should ensure there are adequate means of communicating with, and 

obtaining information from, external stakeholders that may have a 

significant impact on the agency achieving its goals. Moreover, 

effective information technology management is critical to achieving 

useful, reliable, and continuous recording and communication of 

information.

• Monitoring: Internal control monitoring should assess the quality of 

performance over time and ensure that the findings of audits and 

other reviews are promptly resolved. Internal control should generally 

be designed to assure that ongoing monitoring occurs in the course of 

normal operations. It is performed continually and is ingrained in the 

agency’s operations. It includes regular management and supervisory 

activities, comparisons, reconciliations, and other actions people take 

in performing their duties. Separate evaluations of control can also be 

useful by focusing directly on the controls’ effectiveness at a specific 
Appendix IV: Internal Control Frameworks

Page 60 GAO-13-805 District of Columbia Opportunity Scholarship Program

time. The scope and frequency of separate evaluations should 

depend primarily on the assessment of risks and the effectiveness of 

ongoing monitoring procedures. Separate evaluations may take the 

form of self-assessments as well as review of control design and 

direct testing of internal control. Separate evaluations also may be 

performed by the agency Inspector General or an external auditor. 

Deficiencies found during ongoing monitoring or through separate 

evaluations should be communicated to the individual responsible for 

the function and also to at least one level of management above that 

individual. Serious matters should be reported to top management. 

Monitoring of internal control should include policies and procedures 

for ensuring that the findings of audits and other reviews are promptly 

resolved. Managers are to (1) promptly evaluate findings from audits 

and other reviews, including those showing deficiencies and 

recommendations reported by auditors and others who evaluate 

agencies’ operations, (2) determine proper actions in response to 

findings and recommendations from audits and reviews, and (3) 

complete, within established time frames, all actions that correct or 

otherwise resolve the matters brought to management’s attention. The 

resolution process begins when audit or other review results are 

reported to management, and is completed only after action has been 

taken that (1) corrects identified deficiencies, (2) produces 

improvements, or (3) demonstrates the findings and 

recommendations do not warrant management action.
Appendix V: Comments from the Department 

of Education

Page 61 GAO-13-805 District of Columbia Opportunity Scholarship Program

Appendix V: Comments from the Department 

of Education
Appendix V: Comments from the Department 

of Education

Page 62 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix V: Comments from the Department 

of Education

Page 63 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix V: Comments from the Department 

of Education

Page 64 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix V: Comments from the Department 

of Education

Page 65 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix V: Comments from the Department 

of Education

Page 66 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix V: Comments from the Department 

of Education

Page 67 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix V: Comments from the Department 

of Education

Page 68 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix VI: Comments from the District of 

Columbia Children and Youth Investment Trust 

Corporation

Page 69 GAO-13-805 District of Columbia Opportunity Scholarship Program

Appendix VI: Comments from the District of 

Columbia Children and Youth Investment 

Trust Corporation
Appendix VI: Comments from the District of 

Columbia Children and Youth Investment Trust 

Corporation

Page 70 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix VI: Comments from the District of 

Columbia Children and Youth Investment Trust 

Corporation

Page 71 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix VI: Comments from the District of 

Columbia Children and Youth Investment Trust 

Corporation

Page 72 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix VI: Comments from the District of 

Columbia Children and Youth Investment Trust 

Corporation

Page 73 GAO-13-805 District of Columbia Opportunity Scholarship Program
Appendix VII: Contact and Staff 

Acknowledgments

Page 74 GAO-13-805 District of Columbia Opportunity Scholarship Program

George A. Scott, Director, (202) 512-7215 or scottg@gao.gov

In addition to the contact named above, Gretta L. Goodwin, Assistant 

Director; Jamila Jones Kennedy; Grace Cho; and Michelle Loutoo Wilson 

made significant contributions to this report. In addition, key support was 

provided by Carl Barden, Hiwotte Amare, Kimberly McGatlin, Carla 

Craddock, David Chrisinger, Maria C. Belaval, Mimi Nguyen, Melinda 

Cordero, John Lopez, Helina Wong, Ramon Rodriguez, Alexander 

Galuten, Jean McSween, James Rebbe, Edward Bodine, Aron Szapiro, 

and Kristy Kennedy. 

Appendix VII: Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(131172)
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