DOE's fiduciary agent arrives on Guam - KUAM.com-KUAM News: On Air. Online. On Demand.

DOE's fiduciary agent arrives on Guam

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by Michele Catahay

Guam - The Department of Education's third-party fiduciary agent is on island, ready to tackle the agency's management of federal funding.  Representatives from Alvarez and Marsal are on Guam, meeting with local officials and assessing DOE's current financial system.

A&M is here with the U.S. Department of Education, with Superintendent Dr. Nerissa Bretania Underwood saying of their trip, "This is a very important day for DOE because this is a turning point with our effort to improve our financial management system and financials services, specifically as it relates to the managing of our federal funds."  The company specializes in turnaround management, performance improvement and business advisory services.

USDOE mandated a third-party agent be obtained to help improve management of federal grants utilized in local schools. The contract award is for a base period of two years with fees of $4.2 million for the first year and $4.1 million for the second year.

Managing Director Bob Roberti told KUAM News, "They have specific issues around the way they spend their federal funds. As we've discussed last night, it's our job to let them become more accountable in how they spend that money and it allows people to be more transparent on how they spend that money."

Roberti says this partnership between A&M and DOE will allow for more transparency when it comes to how federal dollars are spent. A sophisticated system will allow for tracking.  "One of the things you need to understand," he noted, "is that while this third-party is being constructed, we're bringing our own system. We're going to be managing their funds with a system that we will have total control over."

The third-party will have an office on the second floor of DOE's Central Office. Roberti says they're hoping to have the system in place by the end of the year.  "We're pretty confident as we told the superintendent and USDOE today that we believe 60 to 90 days, let's say by Christmas time, the system will be in place and hopefully allow funds to flow."

Alvarez and Marsal was contracted in 2006 as a third-party agent for the U.S. Virgin Islands Department of Education.  According to an audit released by the USDOE Office of Inspector General in January this year, A&M had not addressed all of the requirements of the contract and special conditions as required, including the effective management and oversight of property.  But Roberti remains hopeful that all issues will be addressed on Guam.

He says DOE has been pretty organized when it comes to outlining its budget.  "We think we're going to have a pretty easy time here reviewing your budget," he confidently said.  "And from that perspective, we were pleasantly surprised."

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