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Audit finds ventilation grant spending allowable but bid notices failed to disclose federal funding
Summary
Internal audit said expenditures under a VDOE-allocated ventilation grant (just over $13 million) were allowable and the local match was met, but bid advertisements for seven schools did not disclose planned federal funding and matching funds as required; audit recommended procurement involvement and policy updates.
Internal audit told the Virginia Beach City Public Schools Audit Committee that a compliance audit of the ventilation improvement grant — a passthrough from the federal government awarded by VDOE for just over $13,000,000 — found grant and match expenditures allowable but a procurement disclosure failure that needs corrective action.
"We determined that all expenditures for the grant and the local match were allowable," auditor Karen said, adding that the grant required a 100% local match and that some expenditures for the local match were recorded in the broader capital improvement fund rather than coded to the grant, which makes traceability difficult in audits. She reported $220,375.99 in encumbrances tied to the July 1, 2024 deadline and said those expenditures are retained for improvements at Lansdowne High School pending commissioning.
The one audit finding relates to procurement advertising; Karen said bid announcements for the seven school projects did not disclose that the planned improvements were funded with federal grant and matching funds, contrary to federal procurement disclosure requirements. "The advertisement for bid posted ... did not disclose the planned improvements were being funded with federal grant and matching funds," she said. Audit recommended Office of Procurement Services involvement in capital procurement and updating policy so procurement is aware of federal disclosure rules.
Karen also recommended management identify and code local-match expenditures so they are traceable within the capital improvements project. She said management and procurement are already coordinating and that procurement has begun to take on more capital procurement work for certain projects (Princess Anne High School design-build was cited as an example of collaborative procurement work).
Committee members asked whether the finding and the recommendation were related; auditors said the disclosure finding is separate from the tracing/tracking recommendation. Management representatives present described ongoing policy reviews and said procurement engagement is expected to increase as policies are updated.
Audit staff said they would follow up on recommendations and that management would provide implementation dates so the committee can track progress.
