DOE incurred losses of over $600K
by Mindy Aguon
Guam - The Department of Education managed not to have any questioned costs in Fiscal Year 2010 associated with federal grants, which is a significant improvement from previous years. But auditors still noted some concerns during their latest review of doe's finances.
DOE closed the last fiscal year with a loss of more than a half-million dollars. Even though total revenues were $252.9 million, DOE managed to spend $253.6 million. Lou Perez with the Office of Public Accountability said, "The biggest struggle they encounter of course is local funding. They continue to struggle with that and that's why established the Education Finance Supervisory Commission."
A review of the Fiscal Year 2010 finances pointed to concerns that of the $89.3 million awarded to the department in American Recovery and Reinvestment Act funds, only 1% was expended as of September 30 of last year.
Deputy Superintendent of Finance Taling Taitano explained that since the third-party fiduciary agent was put in place and DOE's legal counsel can review procurements, DOE has encumbered close to $18 million. "We want to make sure that we encumber all the money by the deadline, but we also want to make sure that we don't rush through and put out faulty procurement that will later get protested," she noted. "So we're trying to work with all due speed but be diligent about what we're doing, but we're pretty confident that we'll meet the deadline of September 30."
Taitano says the bulk of the projects should be awarded during the summer when renovations to schools are expected to get underway while students are out of classes.
While the department received a qualified opinion, auditors noted seven findings that were deemed material weaknesses. She continued, "They were related to internal controls on the financial reporting and compliance over federal programs...those programs in itself had problems with issues related to maintenance of equipment, getting three positive quotes and also some of the other issues they identified reconciliation."
Auditors also had concerns with the lack of accountability with non-appropriated funds. $93,000 was lacking in invoices, receiving reports and reconciliations. The audit also noted that the agency is not paying down its $6.6 million debt to the Government of Guam Retirement Fund. They're all concerns DOE is hoping to improve upon this fiscal year.
"A lot of the findings that are in the audit are repeat findings, and we recognize that. One of the things we're doing is we're working with our third-party fiduciary agent to come up with a corrective action plan to try to resolve those issues," Taitano said.