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Audit of the Massachusetts School Building Authority Objectives, Scope, and Methodology

An overview of the purpose and process of auditing the Massachusetts School Building Authority.

Table of Contents

Overview

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of certain activities of the Massachusetts School Building Authority (MSBA) for the period January 1, 2019 through June 30, 2021.

We conducted this performance audit 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.

Below is a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in this report.

Objective

Conclusion

  1. Does MSBA prioritize school districts’ Core Program statements of interest (SOIs) as required by Section 8 of Chapter 70B of the General Laws?

Yes

  1. Does MSBA use a procedure that evaluates school districts’ Accelerated Repair Program (ARP) SOIs based on the priorities in Section 8 of Chapter 70B of the General Laws?

Yes

  1. Does MSBA have written policies and procedures to govern prioritization for the Core Program and ARP?

No; see Finding 1

 

To achieve our audit objectives, we gained an understanding of MSBA’s internal control environment as it related to the objectives by reviewing MSBA’s most recent internal control plan, risk assessment, policies, and procedures, as well as conducting inquiries with MSBA’s management and employees. We evaluated the design and implementation of the internal controls. We tested the operating effectiveness of MSBA’s controls over the SOI process.

We performed the following procedures to obtain sufficient, appropriate audit evidence to address the audit objectives.

To determine whether MSBA prioritized Core Program SOIs in accordance with Section 8 of Chapter 70B of the General Laws, we received and reviewed a list of 132 Core Program SOIs submitted during the audit period and selected a random, nonstatistical sample of 28. For each SOI in our sample, we reviewed MSBA’s assessment of priorities from Section 8 of Chapter 70B of the General Laws. We reviewed hardcopy evidence that included documentation of the following:

  • a review of the SOI by MSBA’s Legal Unit
  • MSBA’s verification of the school’s physical condition (i.e., whether the new construction or addition was necessary)
  • MSBA’s verification of the school district’s self-reported project scope and priority
  • all elements of the due diligence process having been completed
  • a site visit or virtual visit by MSBA’s Capital Planning Unit
  • MSBA management having reported the results of the assessment to the MSBA board of directors.

We verified that school districts that had Core Program SOIs, and had been invited to apply for Core Program grants, had made presentations to MSBA’s facilities assessment subcommittee.2 We also verified that MSBA sent a rejection letter to each school district that submitted a Core Program SOI and was rejected.

To determine whether MSBA used a procedure that evaluated ARP SOIs in accordance with Section 8 of Chapter 70B of the General Laws, we received and reviewed a list of all ARP SOIs submitted during the audit period and selected a random, nonstatistical sample of 35. We reviewed MSBA’s minimum age requirements for roofs, boilers, windows, and doors, which state that these items must be a certain age before their schools can be invited to apply for grants to replace them. In 2019, for roofs, the age was 27 years; for boilers, 20 years. (Windows and doors were not eligible in 2019.) In 2020, the minimum ages were 30 years for roofs, 35 years for boilers, and 35 years for windows and doors. For each ARP SOI in our sample, we reviewed MSBA’s assessment of priorities from Section 8 of Chapter 70B of the General Laws. We reviewed the hardcopy evidence, which included documentation of the following:

  • a review of the SOI by MSBA’s Legal Unit
  • MSBA’s verification of the school’s physical condition (i.e., the age of the windows, doors, roofs, and/or boilers to be replaced)
  • MSBA’s verification of the school district’s self-reported project scope and priority
  • all elements of the due diligence process having been completed
  • a site visit or virtual visit by MSBA’s Capital Planning Unit
  • MSBA management having reported the results of the assessment to the MSBA board of directors.

We verified that school districts that had ARP SOIs, and were invited to apply for ARP grants, had made presentations to the facilities assessment subcommittee. We also verified that MSBA sent a rejection letter to each school district that submitted an ARP SOI and was rejected.

To determine whether MSBA has established written policies and procedures to govern prioritization for the Core Program and ARP, we requested MSBA’s written policies and procedures that governed the prioritization. We received and reviewed MSBA’s internal control plan and a risk assessment for the due diligence processes for both Core Program and ARP SOIs. In addition, MSBA employees gave us an overview of the process MSBA uses to evaluate all Core Program and ARP SOIs, which is designed to prioritize grant funding for the school districts with the most urgent need.

We used a nonstatistical sampling method for our audit objectives and did not project the result from the samples to the populations.

Data Reliability

We obtained a list of 305 Core Program and ARP SOIs processed by MSBA during the audit period. To determine the reliability of the list, we verified that there were no hidden rows or columns and that there were no duplicates on the list. We randomly selected 20 SOIs from the list; traced them to physical files; and verified the school districts, school names, and years. We also randomly selected 20 physical files from MSBA’s SOI cabinets and verified that the school districts, school names, and years on the list matched those in the files.

Based on the results of the above procedures, we determined that the list was sufficiently reliable for our audit purposes.

2.    According to MSBA’s website, “The Facilities Assessment Subcommittee meets to hear district presentations regarding proposed projects and provide feedback to districts before the project is presented to the Board [of Directors].”

Date published: September 6, 2022

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