by Mindy Aguon

Guam - Following the Guam Education Board's approval to pay increments to Department of Education staff, saying the money is available, Department of Administration director Benita Manglona fired-off a letter to GEB chairman Francis Santos and superintendent Jon Fernandez, expressing disappointment with the board's decision to pay the increments. Manglona says because DOE said it had available funds to pay the increments, she will recommend to the governor that no future money, currently held in reserves, be released to the department.

The DOA director said doe for months has said it cannot operate without the full release of the 15% reserve but she says that evidently is not the case since DOE says it can afford to pay the increments now.

Dear Mr. Santos and Mr. Fernandez,

We are deeply concerned the Department of Education is disconnected from the financial realities our people are facing.

The timing of board action to release increments could not be worse or more insensitive to those struggling in the government and throughout this island. This is clearly an unfunded obligation the Treasury cannot afford and, worse, an empty promise to teachers. This action falsely raises the hope of teachers at the beginning of a school year and, quite obviously, the thick of an election season.

News of DOE's pursuit of unfunded pay raises came the same day the legislative minority pointed out the Fiscal Year 2013 budget did not address $100 million needed for the Tax Year 2013 Provision for Tax Refunds. That is a $100 million gap in cash that must be identified through cuts in operational spending. Reinstating pay raises at the expense of the ability to continue paying entire paychecks for government jobs is ludicrous. It is financial anathema to raise operational spending as we identify solutions for this shortfall. Keep in mind that though DOE is a semi-autonomous agency, the vast majority of your costs come from the same pot of cash. Every dollar of encumbrance DOE makes is a dollar taken from our ability to pay tax refunds.

The $100 million gap to the Tax Year 2013 Provision for Tax Refunds isn't the only fiscal matter we must be concerned about together. There is still a huge deficit, a stack of bills if you may, that we must pay down. This is a deficit of 2011 tax refunds and vendor payables that go all the way back to 2004. I don't need to remind the Department of Education that a large fraction of this deficit belongs to payables on your books, including hundreds of thousands of dollars due to former employees of the department because of Civil Service action, and millions due to teachers in unpaid salaries. If DOE is now saying there is money for increments, why has the agency not found the money to pay teachers what they are owed from 2003?

More importantly, the Governor wonders about DOE's priorities when pay raises are being pursued at a time when teachers are still waiting for instructional laptops, and discussion to give students iPads or laptops is virtually non-existent. This is not to mention the department's inability to prioritize funds for textbooks, standardized test scores, or white boards for classrooms. Teachers have to shell out money from their pockets to buy school supplies and parents have to purchase reams of copy paper and send toilet tissue to school with their children because DOE cannot afford to supply even these rudimentary materials.

Beyond the fundamentals of finances for public schools is the need to repair the public schools once ARRA funds are exhausted. This was the reason the administration worked with senators to provide financial authority for a leaseback arrangement that will result in the repair of all public schools. At the time of the debate the Department of Education went before the legislature and said it could not absorb the cost of the annual lease payment in its budget. And now DOE can afford pay raises?

DOE recently told the legislature the reason textbooks were not ordered was because of the 15 percent reserve. DOE informed senators that no funds were available, yet at the Special Economic Service meeting it was revealed that DOE has made $28 million in encumbrances above the allotment schedule. This appears to be a deviation from the rest of the government to hold the line on spending. This also brings to the surface the fact that the Department of Administration and the Bureau of Budget and Management Research have absolutely no access to the financials of DOE, the rate of spending, the aging of payables, encumbrances, and other financial information, even though the cash going to pay for DOE's operations come from the same account the majority of the government uses. We have requested from DOE the actual expenditures and outstanding encumbrances since the line item budget was implemented, but this information has yet to be provided.

We have released nearly half of the $30 million in revenue held in reserve to DOE. Yesterday DOE said it is able to pay the increments because the increments are funded and the money is available. If that is so, and if the department now is saying it can afford its operational costs despite months of telling the legislature and the media that it cannot live without the full release of the reserve, then it is obvious to us that DOE no longer needs the remainder of the reserve.

I will be recommending to the Governor that no such future release occurs, and that all savings be directed to the payment of tax refunds.

Sincerely,

BENITA A. MANGLONA