As a prerequisite to the establishment of sound procedures in the area of fiscal monitoring and program audit, the Federal authorities must first become willing to recognize that it is altogether impractical to expect any large school system to maintain separate operations for handling the myriad of administrative details associated with a project. The division of labor within a department engaged in such activities as purchasing, payroll, or housing absolutely precludes the possibility of assigning personnel to a project on a full-time basis. Depending upon fluctuations in the workload, varying amounts of time may be spent on matters related to a particular Federal project. In a large school system it becomes almost impossible to assess overhead costs with exactitude within a total sequence of program actions. Therefore, the Office of Education must devise formulas that lend themselves to the realities of operating a school system.

Inasmuch as the problem described is a rather technical one demanding special expertise, it would be altogether appropriate for the Office of Education to contract with an independent accounting firm for a study to yield the kinds of recommendations that would satisfy both Federal, State, and local concerns. Whether done on the outside or internally by the Office of Education, however, it is imperative that the end result be a carefully built set of directives clearly outlining procedures for claiming all indirect costs stemming from Title I activities. Related to this should be clear-cut statements of the type and manner of accounting treatments to be used in all situations pertaining to fiscal control where problems might be encountered. Either technical assistance or Federal funds enabling LEA's to engage the services of accountants might be called for to the extent that Federal requirements impose a need for redesign of the adaptations within local accounting systems.

At the same time that the Federal government must be urged not to prescribe rules or regulations that are inconsistent with local operations, the need for tightening auditing methods must be addressed. Here again it is incumbent upon the large cities to counsel a pragmatic approach. This demands that the Federal government realize that it is generally absurd to demand restitution where audit exceptions are sustained except in those cases where deliberate defalcations have arisen.

Instead of seeking collection, the Federal government should endeavor to create some procedures for assuring compliance where changes are in order. As a corollary to this approach, the Office of Education must become committed to the posture that if an audit is to be effective it must be relatively immediate in relation to the expenditures made. By the same token the report based upon the audit must also be fairly immediate. In this context the "old" system of the inspector general's office in army might warrant consideration in showing how audits could be reasonably related to discreet periods of time with some effectiveness as a monitoring device. Under a system of this type an audit would be scheduled, deficiencies noted, a timetable for correction established, and a recheck conducted to ascertain the occurrence of compliance. Ideally, this would permit placing of an audit report in the hands of a school system's officials within sixty days. This arrangement would then allow thirty days in which to institute changes and prepare letters of compliance.

If State authorities because of their proximity are to continue to assume the function of continual monitoring, then the Federal authorities must enunciate far more clearly than they have in the past the extent to which the burden of operational proof is to be placed upon the States. From the standpoint of the local educational agency approvals by any higher authority must be binding. In other words, the entire occurrence of after-the-fact audit exceptions where State approval had been received beforehand should simply not be taking place. If the State cannot assume the responsibilities delegated to it either by law or administrative fiat then alternative ways for channeling funds to urban school systems is called for.

A further note of caution should also be sounded in any deliberations regarding monitoring and auditing. American education is entering an era of performance contracting geared to the demand for accountability. Consequently, any system of fiscal auditing must be dovetailed with or a part of a scheme

for measuring the attainment of program objectives. At the present time evaluation and fiscal monitoring are operationally distinct from one another. If the commitment to make OE an advocate for change is to be translated into action, then initiatives must be taken at the Federal level to encourage the implementation at the local level of integrated planning-programming-budget systems. In this connection the following excerpt pertaining to independent education audits from the Education Daily of December 3, 1969, assumes some relevance.

"State agencies will be trained in the use of independent performance audits for ESEA Title I and Title III. Although OE has already made the "independent educational accomplishment auditor" a must for Dropout and Bilingual programs which it administers, it is now seeking to have the concept adopted on the State level as well."

REAFFIRMATION OF CATEGORICAL FUNDING

With the concept of decentralization becoming a reality in many large urban school districts, it may be an opportune time for the Office of Education to reaffirm the concept of categorical funding. It is desirable for a number of reasons to have more committed funds with clearly drawn guidelines. Among these are: (1) Federal appropriations of categorical aid insures specialized needs of schools systems being met, (2) the uses are clear-cut, the intent established, and (3) the funding is adequate to meet the objectives.

With regional board members under a decentralized situation, looking about for available funds, categorical funding is not only desirable, it is essential to the proper use and management of federal monies. Additionally, local state coersion to participate in favored practices or methods when local agencies are opposed will be held to a minimum.

RESEARCH AND EVALUATION

The demands by the Office of Education for more efficient evaluation designs is a laudable position. It requires, however, substantial increases in funding for this purpose. In addition, outside evaluations, that have been required, remove from the total grant monies that could support programs. If indeed Research and Evaluation is vital to improved programming, adequate funding must be provided.

It may well be advisable to mention here, too, that the results of these evaluations are without impact if they are not available to other cities and regions of the nation. The School District of the City of Detroit, despite national critics, has significant positive data generally unknown in the United States.

CONTINUED FUNDING

The advisability of continued funding in the operation of programs is a point we must address ourselves to as a positive procedure. We must be able to plan programs without the yearly anxieties as to financial considerations. Effective programs depend upon effective people who do not have to speculate about levels of funding.

MEETINGS

We question the proliferation of meetings around the country. In most instances, the information has already been received by large districts through their Washington representatives or stresses directions of which large urban areas are already in the forefront. These meetings may be valuable to smaller districts but in most cases it is felt the number of such meetings can be significantly reduced.

TECHNICAL ASSISTANCE

The unusual array of Technical Assistance Firms sponsored by the Office of Education have little value to a school district of this size and capability. The various departments and divisions of this system contain nationally known people in almost every field. We would wonder about the advisability of the maintenance of a large number of these firms by the Office of Education for large local agencies with duplicate capabilities.