Further,  federal internal control standards state that organizations must have  relevant, reliable, and timely communications, and adequate means of  communicating with external parties who may have an impact on the  organization achieving its goals. Additionally,  scholarships to students were awarded several months after many  schools had completed their admissions and enrollment processes,  limiting the amount of time and choice in selecting schools. Effective Controls to Safeguard Federal Funds

Effective policies and procedures: During our 2013 review, we found  that OSP’s policies and procedures lacked detail in several areas related  to school compliance and financial accounting, which may weaken overall  accountability for program funds. The  absence of detailed policies and procedures reflect weak internal control  in the areas of risk assessment, control activities, information and  communication, and control environment. Without a  mechanism or procedures to verify the accuracy of the information  provided, OSP cannot provide reasonable assurance that participating  schools meet the criteria established for participation in the program. As a  result, there is a risk that federal dollars will be provided for students to  attend schools that do not meet the education and health and safety  standards required by the District. For example, in OSP—and other eligibility-based  choice programs—it is important to have accurate, up-to-date student  application information in order to meet program objectives, such as  determining eligibility and awarding program scholarships in an efficient  and timely manner. In  addition, because a key variable in the OSP database used in the student  selection process was unreliably populated, OSP’s ability to accurately  select students based on established priorities for the program may have  been compromised. To address these issues we  recommended Education explore ways to improve monitoring and  oversight of the program administrator. Proper Execution of Roles and Responsibilities

Internal control activities help ensure that actions are taken to address  risks, and include a wide range of activities such as approvals,  authorizations, and verifications. For  our 2013 report, OSP told us they did not receive any information from  the District as a result of any inspections, nor did the administrator follow  up with District agencies to inquire about them. To  address these issues, we recommended Education work with the Mayor  of the District of Columbia to revise the MOU that governs OSP  implementation to include processes that ensure the results of OSP  school inspections are communicated to the program administrator. In conclusion, OSP has provided low-income families in the District  additional choices for educating their children and has likely made private  school accessible to some of these children who would not otherwise  have had access. However, to help ensure that OSP efficiently and  effectively uses federal funds for their intended purpose—that is, to  provide increased opportunities to low-income parents to send their  children, particularly those attending low-performing schools, to private  schools—any entity responsible for operating a school choice program  such as OSP needs a strong accountability infrastructure that  incorporates the elements of internal control discussed above. Education stated that they had addressed some of the issues that we  identified, but we were unable to assess the extent to which they had  implemented our recommendations in time for this statement. We  continue to believe that by fully addressing our nine remaining  recommendations for the OSP program, Education would promote more  efficient and effective program implementation and accountability over  federal funds, regardless of which entity is administering the program. This is a work of the U.S. government and is not subject to copyright protection in the  United States.
Why GAO Did This Study

School vouchers are one of many school choice programs. Vouchers provide students with public funds to attend private schools and are often featured in discussions on education reform. The District of Columbia’s (District) Opportunity Scholarship Program (OSP) has garnered national attention as the first federally-funded private school voucher program in the United States. Since the program’s inception, Congress has provided more than $180 million for OSP, which has, in turn, provided expanded school choice to low-income students by awarding more than 6,100 scholarships to low-income students in the District. GAO’s 2013 report was in response to a request from the Chairman of the Subcommittee on Financial Services and General Government, Committee on Appropriations, U.S. Senate that GAO review the extent to which OSP was meeting its stated goals and properly managing federal funds.
This statement is based on GAO’s 2013 report, and discusses the importance of ensuring effective implementation of OSP and any future similar federal school choice programs and providing sufficient accountability for public funds.

What GAO Found

Students in the District of Columbia (District) have many choices for K-12 schooling including charter, magnet, and traditional public schools, as well as private schools through the federally funded Opportunity Scholarship Program (OSP). Strong fiscal monitoring and oversight of the various schools that participate in choice programs is critical to ensuring that these programs have effective internal controls that help them meet the goal of providing a quality education to students. Internal control is broadly defined as a process designed to provide reasonable assurance that an organization can achieve its objectives. Five internal control standards—control environment, risk assessment, control activities, information and communication, and monitoring—should be an integral part of a system that managers use to regulate and guide an agency’s operations.
During GAO’s 2013 review of OSP, most families GAO 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. However, GAO found weaknesses in three areas—access to timely and complete program and award information, effective controls to safeguard federal funds, and clearly defined and properly executed roles and responsibilities—that are the result of internal control deficiencies that may limit the effectiveness of OSP and its ability to meet its goal of providing a quality education experience for students in the District. Strong internal controls in these areas would strengthen the OSP and are critical to the success of any similar federally funded school voucher program.

What GAO Recommends

In 2013, GAO made 10 recommendations to Education to improve OSP. To date, one recommendation has been closed as implemented. In October 2015, Education told GAO that it had addressed some of the issues that GAO identified in the 2013 report, but GAO was unable to assess the extent to which they had implemented our recommendations in time for this statement. GAO continues to believe that the 2013 recommendations would address weaknesses previously identified in OSP, and would improve the implementation and effectiveness of OSP—and any future federally funded choice programs.