Commission puts DOE on watch - KUAM.com-KUAM News: On Air. Online. On Demand.

Commission puts DOE on watch

by Michele Catahay

Guam - The Education Financial Supervisory Commission has issued a watch and warning for the Department of Education. The designations were given after the Commission found that DOE was spending above what was budgeted in its current fiscal year budget for overtime and benefits.

A law created the Commission and among its responsibilities is to assign a financial status designation for DOE that provides an indication of the financial condition of the agency. The Commission is made up of the directors of BBMR and DOA, along with the Public Auditor and the Legislative Committee on Finance. 

The Commission has found DOE has been spending more than it should be in a number of areas. Oversight chair of Budget and Finance Senator Ben Pangelinan said, "They did not budget any money for overtime and they spent about $104 [million] in overtime. It's a concern because it's not budgeted but from a dollar perspective, it's not material at all."

Then there are spikes in the numbers for personnel and benefits, of which Pangelinan says, "There we have them on a warning designation because we looked at it and if they continue to spend the way that they're spending, they will be short in this category by $1.4 million at the end of the fiscal year."

Pangelinan says it's critical that the problems are outlined before the shortfall materializes. While Senator Pangelinan says that DOE needs to get a handle on its finances, Superintendent Dr. Nerissa Bretania Underwood says the discrepancies are due to a number of things.

She says the declaration was delivered to her office Tuesday, adding, "It makes our transactions more transparent to our stakeholders and the community of Guam. To me, that will only strengthen the credibility for the Department of Education."

Bretania Underwood says the increase in overtime is due to the recent break-ins on campus, which have forced maintenance employees to work overtime. She says noted costs are also attributed to other things. "The spike in our payroll had occurred when we had implemented the hay study. That also could be contributed to that," Underwood added. "And also the implementation of the insurance rates. Whenever there's a difference in insurance rates and retirement rates, those are not budgeted, then that would throw off our budget."

In the meantime, Guam Education Board chair Joe San Agustin reacted to designations by telling KUAM News, "We need to make sure that they stay on top of it. I think Taling [Taitano] has been doing a great job and I'm not really worried too much about it. We just want to make sure it doesn't get out of hand. And it's great that we have a commission that is doing this."

As a result of the ratings, the superintendent must submit a corrective financial recovery plan to eliminate the watch within 20 working days to the education board. Upon approval, the board must submit it to the commission within 15 working days of receipt from the superintendent.

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