Audit 334970

Finding No.: 2023-004 Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Eligibility Questioned Costs: $0 Criteria: In accordance with the National School Lunch Act, state agencies are required to annually notify local educational agencies (LEAs) of district-wide eligibility for the community eligibility provision (CEP). By May 1 of each year, state agencies must publish lists of eligible and near- eligible LEAs and schools on their state agency websites. Condition: As of September 30, 2024, the annual notification for School Year (SY) 2022-2023 is not published on GDOE’s website. The most recent publication is for SY 2021-2022. Cause: GDOE did not enforce controls over compliance with the applicable eligibility requirements relative to annual notifications and publications. Effect: GDOE is in noncompliance with applicable eligibility requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: GDOE should establish and implement internal controls over compliance with applicable eligibility requirements. Responsible personnel should prepare and publish and required notifications. Views of Responsible Officials: GDOE agrees with the finding. GDOE did not published School Year 2022-2023 eligibility notifications for the community eligibility provision to the GDOE website by May 1, 2023 as required by the National School Lunch Act (NSLA). GDOE Child Nutrition Program (CNP) division is aware of the requirement and has publicly posted eligibility notifications to ensure compliance to NSLA. GDOE does not anticipate this will be an audit finding moving forward. Finding No.: 2023-004, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Eligibility Questioned Costs: $0 Views of Responsible Officials, continued: Plan of action and completion date: The CNP Office has incorporated a calendar reminder within the CNP Office and updated the internal calendar of report due dates to facilitate the timely upload of the required information to the GDOE CNP website. Plan to monitor and responsible officials: The CNP State Administrator, Franklin Cruz, will ensure that CEP eligibility notifications are posted to the GDOE website by May 1 of every year to be in compliance with the reporting requirements of the NSLA.

Finding No.: 2023-005 Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 2 (or 100%) of 2 purchase orders (POs), aggregating $11.6M of $15M in food services, no Byrd Anti-Lobbying certification was provided, as follows: Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Subsequently, on 10/15/2024, GDOE effected partial corrective action by obtaining the required certification for PO 20230905. Finding No.: 2023-005, continued Federal Agency: U.S. Department of Education AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Procurement and Suspension and Debarment Questioned Costs: $0 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-006 Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, SFAs and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The state agency has an additional 30 days to submit a consolidated report to FNS (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). Also, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: 1. For all five claims tested, GDOE submitted the monthly claim beyond the required 60 days, as follows: 2. Subawards are not reported in FSRS, as follows: Cause: GDOE lacks controls over compliance with applicable reporting requirements. Finding No.: 2023-006, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Reporting Questioned Costs: $0 Effect: GDOE is in noncompliance with applicable reporting requirements, which resulted in understated totals in the Schedule of Expenditures of Federal Awards (SEFA) dated April 9, 2024. GDOE subsequently corrected expenditures in its SEFA dated September 20, 2024, but thereby created an unreconciled overstatement of $278,805. No questioned cost is presented as the SEFA misstatement does not represent overstated claims. Recommendation: Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to timely submitting monthly claims for reimbursement and to reporting subawards in FSRS. Views of Responsible Officials: GDOE agrees with the finding. GDOE submitted monthly reimbursement claims for meals and snacks served to eligible students beyond the required 60-day reporting period and did not report sub awards of $30,000 or more to the Federal Funding Accountability and Transparency Act Sub Award Reporting System (FSRS) in FY 2023. Plan of action and completion date: At the start of FY 2024, the CNP Office added personnel to the processing of claims activity. The additional personnel to the process is to ensure the requests are reviewed and processed in a timely manner before transmitting to the GDOE Business Office for reimbursement draw and payment processing. After the transmission, the CNP Office will follow-up and confirm, via email, with the assigned personnel conducting the draws, that the requested draw/payment for claims reimbursement are completed in a timely manner. In addition, the Child Nutrition Programs Office will request for confirmation from the responsible personnel within the Business Office that the required Subaward report is submitted and posted to the respective SEFA to the FSRS. Finding No.: 2023-006, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Reporting Questioned Costs: $0 Views of Responsible Officials, continued: Plan to monitor and responsible officials: The CNP State Administrator, Franklin Cruz, and the Comptroller will ensure that claims are submitted and processed timely.

Finding No.: 2023-007 Federal Agency: U.S. Department of the Interior Pass-Through Entity: Government of Guam AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GDOE charged costs to a federal award after the period of performance ended, as follows: Subsequently, on August 21, 2024, GDOE provided journal entry GEN 120 to transfer $112,157 from Grant 2016 D16AP00059 to Grant 2021 D21AP0036. However, the corresponding 2016 expenditures were obligated prior to 03/01/2021, which is the POP start date for Grant 2021. Therefore, GEN 120 does not result in effective corrective action. No questioned cost is presented for Federal Award No. D15APG0047 and D17AP00103 because GDOE subsequently recorded journal entries in July 2024 to charge costs appropriately to grant year 2019. Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Finding No.: 2023-007, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $113,767. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE agrees with the finding. GDOE is in receipt of Department of Interior grants and manages said funds in coordination with BBMR and Guam Homeland Security. GDOE established projects that were allowable for the use of these funds on a reimbursement basis. In an effort to maximize federal funding, GDOE initiated a transfer of expenses which was tied to a purchase order in FY 2016. Plan of action and completion date: GDOE Financial Affairs has recorded an adjusting journal entry to record the expenditures under FY 2021 but will have to reclass the expenditure in to FY 2020. GDOE will assign an accountant to reconcile GDOE’s Department of Interior budget availability with BBMR and will monitor AS400 for proper recording of transactions. Plan to monitor and responsible officials: The Comptroller (vacant) will monitor on a quarterly basis expenditure from the Department of Interior grant and will prepare a progress report on a semi-annual basis to the Deputy of Finance and Administrative Services, Morgan W. Paul, for review and approval.

Finding No.: 2023-008 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 2 (or 67%) of 3 purchase orders (POs), aggregating $6.1M of $6.9M in total non-payroll Program costs, no Byrd Anti-Lobbying certification was provided. Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-008, continued Federal Agency: U.S. Department of Education AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-007 Federal Agency: U.S. Department of the Interior Pass-Through Entity: Government of Guam AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GDOE charged costs to a federal award after the period of performance ended, as follows: Subsequently, on August 21, 2024, GDOE provided journal entry GEN 120 to transfer $112,157 from Grant 2016 D16AP00059 to Grant 2021 D21AP0036. However, the corresponding 2016 expenditures were obligated prior to 03/01/2021, which is the POP start date for Grant 2021. Therefore, GEN 120 does not result in effective corrective action. No questioned cost is presented for Federal Award No. D15APG0047 and D17AP00103 because GDOE subsequently recorded journal entries in July 2024 to charge costs appropriately to grant year 2019. Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Finding No.: 2023-007, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $113,767. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE agrees with the finding. GDOE is in receipt of Department of Interior grants and manages said funds in coordination with BBMR and Guam Homeland Security. GDOE established projects that were allowable for the use of these funds on a reimbursement basis. In an effort to maximize federal funding, GDOE initiated a transfer of expenses which was tied to a purchase order in FY 2016. Plan of action and completion date: GDOE Financial Affairs has recorded an adjusting journal entry to record the expenditures under FY 2021 but will have to reclass the expenditure in to FY 2020. GDOE will assign an accountant to reconcile GDOE’s Department of Interior budget availability with BBMR and will monitor AS400 for proper recording of transactions. Plan to monitor and responsible officials: The Comptroller (vacant) will monitor on a quarterly basis expenditure from the Department of Interior grant and will prepare a progress report on a semi-annual basis to the Deputy of Finance and Administrative Services, Morgan W. Paul, for review and approval.

Finding No.: 2023-008 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 2 (or 67%) of 3 purchase orders (POs), aggregating $6.1M of $6.9M in total non-payroll Program costs, no Byrd Anti-Lobbying certification was provided. Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-008, continued Federal Agency: U.S. Department of Education AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-007 Federal Agency: U.S. Department of the Interior Pass-Through Entity: Government of Guam AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GDOE charged costs to a federal award after the period of performance ended, as follows: Subsequently, on August 21, 2024, GDOE provided journal entry GEN 120 to transfer $112,157 from Grant 2016 D16AP00059 to Grant 2021 D21AP0036. However, the corresponding 2016 expenditures were obligated prior to 03/01/2021, which is the POP start date for Grant 2021. Therefore, GEN 120 does not result in effective corrective action. No questioned cost is presented for Federal Award No. D15APG0047 and D17AP00103 because GDOE subsequently recorded journal entries in July 2024 to charge costs appropriately to grant year 2019. Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Finding No.: 2023-007, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $113,767. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE agrees with the finding. GDOE is in receipt of Department of Interior grants and manages said funds in coordination with BBMR and Guam Homeland Security. GDOE established projects that were allowable for the use of these funds on a reimbursement basis. In an effort to maximize federal funding, GDOE initiated a transfer of expenses which was tied to a purchase order in FY 2016. Plan of action and completion date: GDOE Financial Affairs has recorded an adjusting journal entry to record the expenditures under FY 2021 but will have to reclass the expenditure in to FY 2020. GDOE will assign an accountant to reconcile GDOE’s Department of Interior budget availability with BBMR and will monitor AS400 for proper recording of transactions. Plan to monitor and responsible officials: The Comptroller (vacant) will monitor on a quarterly basis expenditure from the Department of Interior grant and will prepare a progress report on a semi-annual basis to the Deputy of Finance and Administrative Services, Morgan W. Paul, for review and approval.

Finding No.: 2023-008 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 2 (or 67%) of 3 purchase orders (POs), aggregating $6.1M of $6.9M in total non-payroll Program costs, no Byrd Anti-Lobbying certification was provided. Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-008, continued Federal Agency: U.S. Department of Education AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-009 Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: 1. GDOE charged costs to a federal award before the period of performance started and after the period of performance ended, as follows: No questioned cost is presented for the FY 2024 payroll costs because GDOE subsequently recorded journal entries between August 2024 and October 2024 to transfer such costs appropriately to grant year 2022. 2. GDOE liquidated obligations of a federal award after the approved liquidation end date, as follows: Finding No.: 2023-009, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $80,983. Identified as a Repeat Finding: 2022-004 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE agrees with Condition 1 questioned costs of $560. The questioned charges are related to TPFA purchase orders issued in fiscal year 2019, which falls outside of the period of performance. The expenditure for the 2019 purchase order was transferred from the TPFA Munis and recorded in the incorrect GDOE Munis account. GDOE disagrees with Condition 2 questioned costs of $18,041. In line with federal regulations, GDOE paid (liquidated) the obligations in question on January 4 and 26, 2024, which is before the liquidation end date of January 28, 2024. E&Y auditors are citing GDOE for the issued checks clearing the bank after the liquidation end date, however, liquidation occurs when the recipient draws funds from the grants management system and pays obligations and not specifically when checks clear the bank. Finding No.: 2023-009, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Views of Responsible Officials, continued: GDOE agrees with Condition 2 $62,382 questioned costs. While GDOE Munis system has recorded expenses of $62,382 related to Special Education (SPED) obligations, funds were not drawn for these expenditures. In GDOE’s federal review process, drawdowns are reviewed in alignment with specific conditions for allowability and in compliance with period of performance timelines. The identified funds were not expended from SPED grants. To correct this reporting deficiency, GDOE will record journal entries to transfer the expenditures to appropriate funding sources. Similarly, GDOE improperly charged $3.1 million in payroll expenditures to SPED grants after the period of performance. Subsequently, GDOE corrected this finding by making the appropriate journal entries to transfer the improperly charged payroll expenditure to the appropriate grant year. Plan of action and completion date: The GDOE will perform a monthly review of all transactions to ensure charges are recorded in the appropriate grant year. Additionally, Grant Project Managers and Program Coordinators will timely communicate to the Human Resources and Business Office any changes to accounts charged for federally funded payroll expenditures. The IAO now provides an independent review of drawdown requests – a control that will help prevent liquidation after applicable period of performance. Plan to monitor and responsible officials: Financial Affairs under the leadership of the Deputy of Finance and Administrative Services, Morgan W. Paul, and the GDOE Comptroller (vacant), will ensure an accountant is monitoring the expenditures of federal grants and the corresponding periods of performance and liquidation periods. Grant Project Managers and Federal Compliance review team will also provide timely communication for changes in grant year funding to HR relative to federal payroll. Auditor Response: Condition 1: The purchase order in 2019 constitutes an obligation prior to the period of performance start date of 07/01/2020 for Grant Year 2020. Condition 2: We acknowledge that the checks are dated prior to the liquidation end date; however, program determination letters from U.S. ED from prior years have sustained audit findings wherein auditors cited the check clearing date as the liquidation date.

Finding No.: 2023-010 Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Federal Award No.: H027A210013 Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 8 (or 67%) of 12 purchase orders (POs), no Byrd Anti-Lobbying certification was provided, as follows: Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications and small purchases. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-010, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Procurement and Suspension and Debarment Questioned Costs: $0 Identified as a Repeat Finding: 2022-005 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-009 Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: 1. GDOE charged costs to a federal award before the period of performance started and after the period of performance ended, as follows: No questioned cost is presented for the FY 2024 payroll costs because GDOE subsequently recorded journal entries between August 2024 and October 2024 to transfer such costs appropriately to grant year 2022. 2. GDOE liquidated obligations of a federal award after the approved liquidation end date, as follows: Finding No.: 2023-009, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $80,983. Identified as a Repeat Finding: 2022-004 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE agrees with Condition 1 questioned costs of $560. The questioned charges are related to TPFA purchase orders issued in fiscal year 2019, which falls outside of the period of performance. The expenditure for the 2019 purchase order was transferred from the TPFA Munis and recorded in the incorrect GDOE Munis account. GDOE disagrees with Condition 2 questioned costs of $18,041. In line with federal regulations, GDOE paid (liquidated) the obligations in question on January 4 and 26, 2024, which is before the liquidation end date of January 28, 2024. E&Y auditors are citing GDOE for the issued checks clearing the bank after the liquidation end date, however, liquidation occurs when the recipient draws funds from the grants management system and pays obligations and not specifically when checks clear the bank. Finding No.: 2023-009, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Views of Responsible Officials, continued: GDOE agrees with Condition 2 $62,382 questioned costs. While GDOE Munis system has recorded expenses of $62,382 related to Special Education (SPED) obligations, funds were not drawn for these expenditures. In GDOE’s federal review process, drawdowns are reviewed in alignment with specific conditions for allowability and in compliance with period of performance timelines. The identified funds were not expended from SPED grants. To correct this reporting deficiency, GDOE will record journal entries to transfer the expenditures to appropriate funding sources. Similarly, GDOE improperly charged $3.1 million in payroll expenditures to SPED grants after the period of performance. Subsequently, GDOE corrected this finding by making the appropriate journal entries to transfer the improperly charged payroll expenditure to the appropriate grant year. Plan of action and completion date: The GDOE will perform a monthly review of all transactions to ensure charges are recorded in the appropriate grant year. Additionally, Grant Project Managers and Program Coordinators will timely communicate to the Human Resources and Business Office any changes to accounts charged for federally funded payroll expenditures. The IAO now provides an independent review of drawdown requests – a control that will help prevent liquidation after applicable period of performance. Plan to monitor and responsible officials: Financial Affairs under the leadership of the Deputy of Finance and Administrative Services, Morgan W. Paul, and the GDOE Comptroller (vacant), will ensure an accountant is monitoring the expenditures of federal grants and the corresponding periods of performance and liquidation periods. Grant Project Managers and Federal Compliance review team will also provide timely communication for changes in grant year funding to HR relative to federal payroll. Auditor Response: Condition 1: The purchase order in 2019 constitutes an obligation prior to the period of performance start date of 07/01/2020 for Grant Year 2020. Condition 2: We acknowledge that the checks are dated prior to the liquidation end date; however, program determination letters from U.S. ED from prior years have sustained audit findings wherein auditors cited the check clearing date as the liquidation date.

Finding No.: 2023-010 Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Federal Award No.: H027A210013 Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 8 (or 67%) of 12 purchase orders (POs), no Byrd Anti-Lobbying certification was provided, as follows: Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications and small purchases. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-010, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Procurement and Suspension and Debarment Questioned Costs: $0 Identified as a Repeat Finding: 2022-005 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-011 Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Period of Performance Questioned Costs: $11,004 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: 1. GDOE charged costs to a federal award after the period of performance ended, as follows: No questioned cost is presented for the FY 2024 payroll costs because GDOE subsequently recorded journal entries between August 2024 and October 2024 to transfer such costs appropriately to grant year 2022. 2. GDOE liquidated obligations of a federal award after the approved liquidation end date, as follows: Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Finding No.: 2023-011, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Period of Performance Questioned Costs: $11,004 Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $11,004. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE disagrees with condition 1 related to FY 2024 purchase orders (PO). GDOE PO 20240171 is a copy over of the third-party fiduciary agent (TPFA) PO 20230010 which was issued in December 2022, within the CG 21 period of performance. GDOE acknowledges that the re-issued GDOE purchase order was not timely processed, however the purchase order which encumbered the funds occurred in the appropriate performance period. Additionally, relative to payroll, FPD requests a list (i.e. Staffing Pattern) of all Federally funded personnel from HR. FPD distributes the list to CG Project Leads to validate and compare to the Federal Roster as approved in the Consolidated Grants (CG) Application. The list is updated to make any corrections necessary. Once validated by Project Leads and FPD, HR is given a memo requesting to change/correct the funding year to the new grant award. In GDOE’s Munis system, if the Human Resources (HR) employee salary records are not accurately updated, GDOE payroll will reflect dated pay tables until such time HR makes the appropriate updates based on project lead requests to update accounts to current grant year. GDOE recorded journal entries to transfer the improperly charged payroll expenditure to the appropriate grant year. Finding No.: 2023-011, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Period of Performance Questioned Costs: $11,004 Views of Responsible Officials, continued: Plan of action and completion date: The GDOE will perform a monthly review of all transactions to ensure charges are recorded in the appropriate grant year. Additionally, Grant Project Managers and Program Coordinators will work with the HR and Business Office any changes to accounts charged for federally funded payroll expenditures. IAO now provides an independent review of drawdown requests – a control that will help prevent liquidation after applicable period of performance. Plan to monitor and responsible officials: Financial Affairs under the leadership of the Deputy of Finance and Administrative Services, Morgan W. Paul, and the GDOE Comptroller (vacant), will ensure an accountant is monitoring the expenditures of federal grants and the corresponding periods of performance and liquidation periods. Grant Project Managers and Federal Compliance review team will also provide timely communication for changes in grant year funding to HR relative to federal payroll. Auditor Response: Condition 1: There is no clear notation on the GDOE PO 20240171-01 document itself or within the financial management system entry to indicate that such purchase order is a copy over of TPFA PO 2023010.

Finding No.: 2023-012 Federal Agency: U.S. Department of Education (ED) AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with procurement and suspension and debarment requirements, the following are applicable: 1. All contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. 2. The U.S. Department of Education (ED) has approved the use of $250,000 as the small purchases threshold for U.S. ED Federal awards. When using small purchase procedures to procure property and services under a U.S ED Federal award, GDOE must obtain price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity. GDOE procurement regulations specify that no less than three positive written quotations from businesses shall be solicited, recorded, and placed in the procurement file. Finding No.: 2023-012, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $0 Condition: Of 25 transactions tested, aggregating $4.8M of $8.2M in total non-payroll Program costs, we noted the following: 1. For 17 (or 68%), no Byrd Anti-Lobbying certification was provided. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-012, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $0 Condition, continued: 2. For 3 (or 12%), the small purchases method was used; however, less than three price quotations are on file. No questioned cost is presented as the procurement can be viewed as being technically compliant based on existing GDOE procurement regulations and guidance from the Office of the Attorney General of Guam. a. The procurement of digital subscriptions and online assessments of students for reading and math includes ten solicitations and three quotations, of which two indicate “no quote.” b. The procurement of school uniform vouchers includes six solicitations and six quotations, of which five indicate “no quote.” Additionally, we noted that one of the three major providers of uniforms on Guam was not solicited. c. The procurement of professional consulting services to provide training includes eight solicitations and three quotations, of which two indicate “no quote.” Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements. Identified as a Repeat Finding: 2022-008 Finding No.: 2023-012, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $0 Recommendation: GDOE should enforce compliance with applicable procurement and suspension and debarment requirements. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Also, during the solicitation process, responsible personnel should consider requesting additional price quotations whenever a solicitation results in a response of “no quote” in order to allow other suppliers to participate in the Federally funded transaction. Views of Responsible Officials: GDOE agrees with Condition 1. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. GDOE disagrees with Condition 2. In line with Title 5 of the Guam Code Annotated §5213, a “no quote” response will not be considered a positive quotation but shall be part of the procurement record, which shall further include a written record or memorandum of all solicitations and responses thereto, negative or positive, orally or in writing. In the event the agency obtains less than three (3) positive quotations and provides the attestation required by this Section, the agency may proceed with the small purchase procurement. GDOE has the required attestations on file to evidence that quotations were solicited to multiple potential vendors. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance. Finding No.: 2023-012, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $0 Auditor Response: Condition 2: In accordance with US ED’s Specific Conditions, this US ED grant is subject to the Uniform Guidance procurement requirements for non-Federal entities, e.g., 2 CFR 200.320, which requires price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity. The number determined adequate by GDOE is no less than three.

Finding No.: 2023-013 Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Federal Award No.: S403A220002 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, an Insular Area will submit an annual report containing information covering the program or programs for which the grant is used and administered, including the financial and program performance information required. Condition: The total reported amount expended per the FFY 2022 Consolidated Grant Quarterly Report, dated 10/31/2023, differs from that of underlying accounting records by $3.5M, as follows: Cause: GDOE did not enforce monitoring controls over compliance with applicable reporting requirements. Effect: GDOE is in noncompliance with applicable reporting requirements. No questioned cost is presented as the variance does not represent an overpayment. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable reporting requirements. Prior to certifying reports, responsible personnel should verify reported amounts against underlying accounting records and should retain such records to substantiate reported amounts. Finding No.: 2023-013, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Federal Award No.: S403A220002 Area: Reporting Questioned Costs: $0 Views of Responsible Officials: GDOE disagrees with the finding. GDOE is required to submit an annual report that includes financial and program performance information relative to Consolidated Grants (CG). GDOE’s FFY 2022 CG Quarterly Report, dated October 31, 2023, reported a total expenditure amount that differs from accounting records by $3.5 million. The information cited in the finding references data from a quarterly monitoring tool, which is used for internal tracking and management purposes. However, GDOE is only required to submit programmatic and financial data in its annual report as required in 34 CFR 76.132(a)(5) and further reiterated in the criteria of this finding. The official reporting obligation is limited to the data submitted in the Annual Performance Report (APR). Plan of action and completion date: GDOE disagrees with the finding. However, to ensure the proper enforcement of monitoring controls and allow for a more accurate tool used for internal tracking and management purposes, the Federal Programs Division will remove the cited financial information from its quarterly reports. To best capture this information, the Federal Programs Division will now require this information be submitted and certified by the GDOE accounting team. Auditor Response: The FFY 2022 Consolidated Grant annual performance report was not provided and is not published at GDOE’s website. The annual report given to the auditors in response to this finding was for ALN 84.425 Education Stabilization Fund and not for ALN 84.403.

Finding No.: 2023-014 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Criteria: In accordance with applicable allowable cost/cost principles requirements, costs must be reasonable for the performance of the Federal award. Also, in accordance with property standards, if there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other Federal award, the non-Federal entity must retain the supplies for use on other activities or sell them, but must, in either case, compensate the Federal Government for its share. Condition: Out of $7.5M in non-payroll expenditures for equipment, we noted $5.2M pertained to the acquisition of 2,467 high efficiency particulate absorbing (HEPA) filtration units at a cost of $2,089.05 per unit, under PO number 20221923, dated July 12, 2022. Of the 2,467 units, 181 units (or 7%), totaling $378,118, remain undistributed and uninstalled as of September 30, 2024, exceeding one year from acquisition dates in November 2022 Simon Sanchez High School (SSHS) and February 2023 for F.B. Leon Guerrero Middle School (FBLG). At SSHS, the units were installed and in use in October 2022. However, due to the damages sustained by Typhoon Mawar in May 2023, SSHS has remained closed, and the units remain idle and secured at the school. FBLG was closed since December 2022 based on a structural engineering inspection report, dated September 13, 2022. The vendor delivered the units in February 2023 to Tiyan High School (THS) for storage. In this case, it would appear that GDOE might have had a two-month opportunity to cancel the FBLG order. We understand that all other schools have received their units and have no need for any additional. No planning documentation was provided for the unused supplies. Finding No.: 2023-014, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Cause: Although the typhoon damages sustained at SSHS are beyond GDOE’s control, GDOE did not enforce monitoring controls over compliance with applicable allowable costs/cost principles requirements for the FBLG units and property standards for the SSHS and FBLG units. Effect: GDOE is in noncompliance with applicable allowable costs/cost principles requirements and property standards. The total reportable questioned cost is $378,118. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable allowable costs/cost principles requirements and property standards. GDOE should consider seeking guidance from U.S. ED as to the disposition of the unused filtration units and any resulting compensation for the Federal share. Views of Responsible Officials: GDOE disagrees with the condition related to Simon Sanchez High School (SSHS) as the units were used prior to the school’s closure. The units for SSHS were received and installed in October 2022. According to the school principal, all units were utilized in classrooms and offices. Following Typhoon Mawar, the school was deemed unsafe for occupancy, prompting the relocation of all units to a secured location. GDOE agrees with the condition related to F.B. Leon Guerrero Middle School (FBLGMS). However, GDOE would like to clarify that the units for FBLGMS were initially delivered to JP Torres for staging and assembly in December 2022, which coincided with the closure of the school. In February 2023, the unused units were transferred to Tiyan High School for secure storage. The units will continue to be securely stored until the new school facilities have completed construction in school year 2025-2026 and 2026-2027. Finding No.: 2023-014, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Views of Responsible Officials, continued: Plan of action and completion date: GDOE plans to utilize the HEPA filtration systems across other federal awards from the same granting agency, to include the Consolidated Grant and Special Education programs. GDOE will also utilize the units as replacements for other schools as needed. Plan to monitor and responsible officials: Program Coordinator, Cellini Higa, will coordinate the use of the HEPA units for other federal awards and replacements for other schools. Auditor Response: Based on receiving reports provided to the auditors, the finding now reflects that the SSHS units were installed in October 2022, whereas the acquisition date of 11/15/2022 is based on GDOE’s fixed asset listing. GDOE has not provided a written assessment of the supplies which have remained unused for seventeen months between May 2023 and October 2024.

Finding No.: 2023-015 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Criteria: In accordance with applicable matching, level of effort, earmarking requirements and section 18008 of the CARES Act, the State will maintain support for elementary and secondary education, and State support for higher education, at least at the levels of such support that is the average of such State’s support for elementary and secondary education and for higher education provided in fiscal years 2017, 2018, and 2019. Such average is defined as the baseline. Furthermore, a State must use the same data sources in determining overall State spending for the baseline years and FY 2023. Condition: GDOE has not submitted final 2023 expenditure data for elementary/secondary education, higher education, and overall Outlying Area spending. Based on our reading of email communications from U.S. ED, Education Program Specialist, Insular Areas, in September 2024, we noted that U.S. ED is aware of such pending submission. Calculations using preliminary data appear to indicate that GDOE’s maintenance of effort for FY 2023 may be deficient, as follows: Finding No.: 2023-015, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Cause: GDOE did not enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Effect: GDOE appears to be in noncompliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. No questioned cost is presented because the source data for determining overall State spending for the baseline years was the State’s Single Audit Reports, and the State’s Single Audit Report for FY 2023 is yet to be issued. Identified as a Repeat Finding: 2022-010 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Responsible personnel should work in close liaison with Government of Guam to verify the State’s overall spending levels. Views of Responsible Officials: GDOE disagrees with the finding. The final 2023 data for the Maintenance of Effort (MOE) will be based on the audited financials for FY 2023 as approved in GDOE’s communication with USEd. Since the audits for GDOE and the Government of Guam were both delayed, the final data needed to complete the MOE calculation was not available. GDOE was proactive in providing USEd with preliminary calculations using appropriated amounts for elementary and secondary education which indicated that the MOE fell within the acceptable one percent of the baseline. GDOE believes that it cannot be held to an audit finding for an MOE when the MOE calculation has yet to be finalized. Additionally, GDOE was approved for waivers in FY 2022. Upon completion of this year’s audit and calculation of MOE, GDOE is still subject to a waiver request approval which would negate the MOE finding identified. Finding No.: 2023-015, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Views of Responsible Officials, continued: Plan of action and completion date: Once the financial audits for GDOE and GovGuam are complete, the final FY 2023 MOE will be calculated. Should the FY 2023 MOE fall short of the baseline, a waiver request will be submitted to USEd. The submission of final data and waiver request, if needed, will be completed by December 30, 2024. Plan to monitor and responsible officials: The Internal Audit Office will ensure that the final MOE data is calculated and, if needed, a waiver request is prepared and submitted. Auditor Response: Although the Government of Guam’s audited financial statements have not been issued, GDOE has the ability to coordinate with the Government of Guam’s Division of Accounts to obtain the State’s preliminary overall spending data for purposes of monitoring the extent of potential MOE deficiencies. Such monitoring is key in GDOE’s communications with US ED over compliance with maintenance of effort requirements.

Finding No.: 2023-016 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, reported amounts should be substantiated by underlying accounting records. Condition: FY 2023 expenditure amounts reported in the required annual report differ from underlying accounting records, as follows: Cause: GDOE did not enforce monitoring controls over compliance with reporting requirements. Effect: GDOE is in noncompliance with applicable reporting requirements. No questioned cost is presented as the variances do not represent overpayments. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should retain underlying accounting records used during report preparation to substantiate reported amounts. Finding No.: 2023-016, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund Area: Reporting Questioned Costs: $0 Views of Responsible Officials: GDOE disagrees with the finding. Annual reports are prepared at a point in time. GDOE submitted the required annual reports for ESF I, ESF II, and ARP on May 23, 2023. Auditors referencing figures in the annual report should also be reconciling to the same period covered and utilized in the financial reporting, as transactions and adjustments occur in the system after the reports are submitted. Plan of action and completion date: GDOE disagrees with the finding but will continue to monitor all federal financial reporting for accuracy and timely submission per the grant requirements. Auditor Response: GDOE did not provide underlying accounting records or a reconciliation to substantiate reported amounts.

Finding No.: 2023-014 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Criteria: In accordance with applicable allowable cost/cost principles requirements, costs must be reasonable for the performance of the Federal award. Also, in accordance with property standards, if there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other Federal award, the non-Federal entity must retain the supplies for use on other activities or sell them, but must, in either case, compensate the Federal Government for its share. Condition: Out of $7.5M in non-payroll expenditures for equipment, we noted $5.2M pertained to the acquisition of 2,467 high efficiency particulate absorbing (HEPA) filtration units at a cost of $2,089.05 per unit, under PO number 20221923, dated July 12, 2022. Of the 2,467 units, 181 units (or 7%), totaling $378,118, remain undistributed and uninstalled as of September 30, 2024, exceeding one year from acquisition dates in November 2022 Simon Sanchez High School (SSHS) and February 2023 for F.B. Leon Guerrero Middle School (FBLG). At SSHS, the units were installed and in use in October 2022. However, due to the damages sustained by Typhoon Mawar in May 2023, SSHS has remained closed, and the units remain idle and secured at the school. FBLG was closed since December 2022 based on a structural engineering inspection report, dated September 13, 2022. The vendor delivered the units in February 2023 to Tiyan High School (THS) for storage. In this case, it would appear that GDOE might have had a two-month opportunity to cancel the FBLG order. We understand that all other schools have received their units and have no need for any additional. No planning documentation was provided for the unused supplies. Finding No.: 2023-014, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Cause: Although the typhoon damages sustained at SSHS are beyond GDOE’s control, GDOE did not enforce monitoring controls over compliance with applicable allowable costs/cost principles requirements for the FBLG units and property standards for the SSHS and FBLG units. Effect: GDOE is in noncompliance with applicable allowable costs/cost principles requirements and property standards. The total reportable questioned cost is $378,118. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable allowable costs/cost principles requirements and property standards. GDOE should consider seeking guidance from U.S. ED as to the disposition of the unused filtration units and any resulting compensation for the Federal share. Views of Responsible Officials: GDOE disagrees with the condition related to Simon Sanchez High School (SSHS) as the units were used prior to the school’s closure. The units for SSHS were received and installed in October 2022. According to the school principal, all units were utilized in classrooms and offices. Following Typhoon Mawar, the school was deemed unsafe for occupancy, prompting the relocation of all units to a secured location. GDOE agrees with the condition related to F.B. Leon Guerrero Middle School (FBLGMS). However, GDOE would like to clarify that the units for FBLGMS were initially delivered to JP Torres for staging and assembly in December 2022, which coincided with the closure of the school. In February 2023, the unused units were transferred to Tiyan High School for secure storage. The units will continue to be securely stored until the new school facilities have completed construction in school year 2025-2026 and 2026-2027. Finding No.: 2023-014, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Views of Responsible Officials, continued: Plan of action and completion date: GDOE plans to utilize the HEPA filtration systems across other federal awards from the same granting agency, to include the Consolidated Grant and Special Education programs. GDOE will also utilize the units as replacements for other schools as needed. Plan to monitor and responsible officials: Program Coordinator, Cellini Higa, will coordinate the use of the HEPA units for other federal awards and replacements for other schools. Auditor Response: Based on receiving reports provided to the auditors, the finding now reflects that the SSHS units were installed in October 2022, whereas the acquisition date of 11/15/2022 is based on GDOE’s fixed asset listing. GDOE has not provided a written assessment of the supplies which have remained unused for seventeen months between May 2023 and October 2024.

Finding No.: 2023-015 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Criteria: In accordance with applicable matching, level of effort, earmarking requirements and section 18008 of the CARES Act, the State will maintain support for elementary and secondary education, and State support for higher education, at least at the levels of such support that is the average of such State’s support for elementary and secondary education and for higher education provided in fiscal years 2017, 2018, and 2019. Such average is defined as the baseline. Furthermore, a State must use the same data sources in determining overall State spending for the baseline years and FY 2023. Condition: GDOE has not submitted final 2023 expenditure data for elementary/secondary education, higher education, and overall Outlying Area spending. Based on our reading of email communications from U.S. ED, Education Program Specialist, Insular Areas, in September 2024, we noted that U.S. ED is aware of such pending submission. Calculations using preliminary data appear to indicate that GDOE’s maintenance of effort for FY 2023 may be deficient, as follows: Finding No.: 2023-015, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Cause: GDOE did not enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Effect: GDOE appears to be in noncompliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. No questioned cost is presented because the source data for determining overall State spending for the baseline years was the State’s Single Audit Reports, and the State’s Single Audit Report for FY 2023 is yet to be issued. Identified as a Repeat Finding: 2022-010 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Responsible personnel should work in close liaison with Government of Guam to verify the State’s overall spending levels. Views of Responsible Officials: GDOE disagrees with the finding. The final 2023 data for the Maintenance of Effort (MOE) will be based on the audited financials for FY 2023 as approved in GDOE’s communication with USEd. Since the audits for GDOE and the Government of Guam were both delayed, the final data needed to complete the MOE calculation was not available. GDOE was proactive in providing USEd with preliminary calculations using appropriated amounts for elementary and secondary education which indicated that the MOE fell within the acceptable one percent of the baseline. GDOE believes that it cannot be held to an audit finding for an MOE when the MOE calculation has yet to be finalized. Additionally, GDOE was approved for waivers in FY 2022. Upon completion of this year’s audit and calculation of MOE, GDOE is still subject to a waiver request approval which would negate the MOE finding identified. Finding No.: 2023-015, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Views of Responsible Officials, continued: Plan of action and completion date: Once the financial audits for GDOE and GovGuam are complete, the final FY 2023 MOE will be calculated. Should the FY 2023 MOE fall short of the baseline, a waiver request will be submitted to USEd. The submission of final data and waiver request, if needed, will be completed by December 30, 2024. Plan to monitor and responsible officials: The Internal Audit Office will ensure that the final MOE data is calculated and, if needed, a waiver request is prepared and submitted. Auditor Response: Although the Government of Guam’s audited financial statements have not been issued, GDOE has the ability to coordinate with the Government of Guam’s Division of Accounts to obtain the State’s preliminary overall spending data for purposes of monitoring the extent of potential MOE deficiencies. Such monitoring is key in GDOE’s communications with US ED over compliance with maintenance of effort requirements.

Finding No.: 2023-016 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, reported amounts should be substantiated by underlying accounting records. Condition: FY 2023 expenditure amounts reported in the required annual report differ from underlying accounting records, as follows: Cause: GDOE did not enforce monitoring controls over compliance with reporting requirements. Effect: GDOE is in noncompliance with applicable reporting requirements. No questioned cost is presented as the variances do not represent overpayments. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should retain underlying accounting records used during report preparation to substantiate reported amounts. Finding No.: 2023-016, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund Area: Reporting Questioned Costs: $0 Views of Responsible Officials: GDOE disagrees with the finding. Annual reports are prepared at a point in time. GDOE submitted the required annual reports for ESF I, ESF II, and ARP on May 23, 2023. Auditors referencing figures in the annual report should also be reconciling to the same period covered and utilized in the financial reporting, as transactions and adjustments occur in the system after the reports are submitted. Plan of action and completion date: GDOE disagrees with the finding but will continue to monitor all federal financial reporting for accuracy and timely submission per the grant requirements. Auditor Response: GDOE did not provide underlying accounting records or a reconciliation to substantiate reported amounts.

Finding No.: 2023-004 Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Eligibility Questioned Costs: $0 Criteria: In accordance with the National School Lunch Act, state agencies are required to annually notify local educational agencies (LEAs) of district-wide eligibility for the community eligibility provision (CEP). By May 1 of each year, state agencies must publish lists of eligible and near- eligible LEAs and schools on their state agency websites. Condition: As of September 30, 2024, the annual notification for School Year (SY) 2022-2023 is not published on GDOE’s website. The most recent publication is for SY 2021-2022. Cause: GDOE did not enforce controls over compliance with the applicable eligibility requirements relative to annual notifications and publications. Effect: GDOE is in noncompliance with applicable eligibility requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: GDOE should establish and implement internal controls over compliance with applicable eligibility requirements. Responsible personnel should prepare and publish and required notifications. Views of Responsible Officials: GDOE agrees with the finding. GDOE did not published School Year 2022-2023 eligibility notifications for the community eligibility provision to the GDOE website by May 1, 2023 as required by the National School Lunch Act (NSLA). GDOE Child Nutrition Program (CNP) division is aware of the requirement and has publicly posted eligibility notifications to ensure compliance to NSLA. GDOE does not anticipate this will be an audit finding moving forward. Finding No.: 2023-004, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Eligibility Questioned Costs: $0 Views of Responsible Officials, continued: Plan of action and completion date: The CNP Office has incorporated a calendar reminder within the CNP Office and updated the internal calendar of report due dates to facilitate the timely upload of the required information to the GDOE CNP website. Plan to monitor and responsible officials: The CNP State Administrator, Franklin Cruz, will ensure that CEP eligibility notifications are posted to the GDOE website by May 1 of every year to be in compliance with the reporting requirements of the NSLA.

Finding No.: 2023-005 Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 2 (or 100%) of 2 purchase orders (POs), aggregating $11.6M of $15M in food services, no Byrd Anti-Lobbying certification was provided, as follows: Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Subsequently, on 10/15/2024, GDOE effected partial corrective action by obtaining the required certification for PO 20230905. Finding No.: 2023-005, continued Federal Agency: U.S. Department of Education AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Procurement and Suspension and Debarment Questioned Costs: $0 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-006 Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, SFAs and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The state agency has an additional 30 days to submit a consolidated report to FNS (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). Also, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: 1. For all five claims tested, GDOE submitted the monthly claim beyond the required 60 days, as follows: 2. Subawards are not reported in FSRS, as follows: Cause: GDOE lacks controls over compliance with applicable reporting requirements. Finding No.: 2023-006, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Reporting Questioned Costs: $0 Effect: GDOE is in noncompliance with applicable reporting requirements, which resulted in understated totals in the Schedule of Expenditures of Federal Awards (SEFA) dated April 9, 2024. GDOE subsequently corrected expenditures in its SEFA dated September 20, 2024, but thereby created an unreconciled overstatement of $278,805. No questioned cost is presented as the SEFA misstatement does not represent overstated claims. Recommendation: Responsible personnel should establish and implement controls over compliance with applicable reporting requirements relative to timely submitting monthly claims for reimbursement and to reporting subawards in FSRS. Views of Responsible Officials: GDOE agrees with the finding. GDOE submitted monthly reimbursement claims for meals and snacks served to eligible students beyond the required 60-day reporting period and did not report sub awards of $30,000 or more to the Federal Funding Accountability and Transparency Act Sub Award Reporting System (FSRS) in FY 2023. Plan of action and completion date: At the start of FY 2024, the CNP Office added personnel to the processing of claims activity. The additional personnel to the process is to ensure the requests are reviewed and processed in a timely manner before transmitting to the GDOE Business Office for reimbursement draw and payment processing. After the transmission, the CNP Office will follow-up and confirm, via email, with the assigned personnel conducting the draws, that the requested draw/payment for claims reimbursement are completed in a timely manner. In addition, the Child Nutrition Programs Office will request for confirmation from the responsible personnel within the Business Office that the required Subaward report is submitted and posted to the respective SEFA to the FSRS. Finding No.: 2023-006, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Reporting Questioned Costs: $0 Views of Responsible Officials, continued: Plan to monitor and responsible officials: The CNP State Administrator, Franklin Cruz, and the Comptroller will ensure that claims are submitted and processed timely.

Finding No.: 2023-007 Federal Agency: U.S. Department of the Interior Pass-Through Entity: Government of Guam AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GDOE charged costs to a federal award after the period of performance ended, as follows: Subsequently, on August 21, 2024, GDOE provided journal entry GEN 120 to transfer $112,157 from Grant 2016 D16AP00059 to Grant 2021 D21AP0036. However, the corresponding 2016 expenditures were obligated prior to 03/01/2021, which is the POP start date for Grant 2021. Therefore, GEN 120 does not result in effective corrective action. No questioned cost is presented for Federal Award No. D15APG0047 and D17AP00103 because GDOE subsequently recorded journal entries in July 2024 to charge costs appropriately to grant year 2019. Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Finding No.: 2023-007, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $113,767. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE agrees with the finding. GDOE is in receipt of Department of Interior grants and manages said funds in coordination with BBMR and Guam Homeland Security. GDOE established projects that were allowable for the use of these funds on a reimbursement basis. In an effort to maximize federal funding, GDOE initiated a transfer of expenses which was tied to a purchase order in FY 2016. Plan of action and completion date: GDOE Financial Affairs has recorded an adjusting journal entry to record the expenditures under FY 2021 but will have to reclass the expenditure in to FY 2020. GDOE will assign an accountant to reconcile GDOE’s Department of Interior budget availability with BBMR and will monitor AS400 for proper recording of transactions. Plan to monitor and responsible officials: The Comptroller (vacant) will monitor on a quarterly basis expenditure from the Department of Interior grant and will prepare a progress report on a semi-annual basis to the Deputy of Finance and Administrative Services, Morgan W. Paul, for review and approval.

Finding No.: 2023-008 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 2 (or 67%) of 3 purchase orders (POs), aggregating $6.1M of $6.9M in total non-payroll Program costs, no Byrd Anti-Lobbying certification was provided. Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-008, continued Federal Agency: U.S. Department of Education AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-007 Federal Agency: U.S. Department of the Interior Pass-Through Entity: Government of Guam AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GDOE charged costs to a federal award after the period of performance ended, as follows: Subsequently, on August 21, 2024, GDOE provided journal entry GEN 120 to transfer $112,157 from Grant 2016 D16AP00059 to Grant 2021 D21AP0036. However, the corresponding 2016 expenditures were obligated prior to 03/01/2021, which is the POP start date for Grant 2021. Therefore, GEN 120 does not result in effective corrective action. No questioned cost is presented for Federal Award No. D15APG0047 and D17AP00103 because GDOE subsequently recorded journal entries in July 2024 to charge costs appropriately to grant year 2019. Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Finding No.: 2023-007, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $113,767. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE agrees with the finding. GDOE is in receipt of Department of Interior grants and manages said funds in coordination with BBMR and Guam Homeland Security. GDOE established projects that were allowable for the use of these funds on a reimbursement basis. In an effort to maximize federal funding, GDOE initiated a transfer of expenses which was tied to a purchase order in FY 2016. Plan of action and completion date: GDOE Financial Affairs has recorded an adjusting journal entry to record the expenditures under FY 2021 but will have to reclass the expenditure in to FY 2020. GDOE will assign an accountant to reconcile GDOE’s Department of Interior budget availability with BBMR and will monitor AS400 for proper recording of transactions. Plan to monitor and responsible officials: The Comptroller (vacant) will monitor on a quarterly basis expenditure from the Department of Interior grant and will prepare a progress report on a semi-annual basis to the Deputy of Finance and Administrative Services, Morgan W. Paul, for review and approval.

Finding No.: 2023-008 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 2 (or 67%) of 3 purchase orders (POs), aggregating $6.1M of $6.9M in total non-payroll Program costs, no Byrd Anti-Lobbying certification was provided. Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-008, continued Federal Agency: U.S. Department of Education AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-007 Federal Agency: U.S. Department of the Interior Pass-Through Entity: Government of Guam AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: GDOE charged costs to a federal award after the period of performance ended, as follows: Subsequently, on August 21, 2024, GDOE provided journal entry GEN 120 to transfer $112,157 from Grant 2016 D16AP00059 to Grant 2021 D21AP0036. However, the corresponding 2016 expenditures were obligated prior to 03/01/2021, which is the POP start date for Grant 2021. Therefore, GEN 120 does not result in effective corrective action. No questioned cost is presented for Federal Award No. D15APG0047 and D17AP00103 because GDOE subsequently recorded journal entries in July 2024 to charge costs appropriately to grant year 2019. Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Finding No.: 2023-007, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $113,767 Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $113,767. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE agrees with the finding. GDOE is in receipt of Department of Interior grants and manages said funds in coordination with BBMR and Guam Homeland Security. GDOE established projects that were allowable for the use of these funds on a reimbursement basis. In an effort to maximize federal funding, GDOE initiated a transfer of expenses which was tied to a purchase order in FY 2016. Plan of action and completion date: GDOE Financial Affairs has recorded an adjusting journal entry to record the expenditures under FY 2021 but will have to reclass the expenditure in to FY 2020. GDOE will assign an accountant to reconcile GDOE’s Department of Interior budget availability with BBMR and will monitor AS400 for proper recording of transactions. Plan to monitor and responsible officials: The Comptroller (vacant) will monitor on a quarterly basis expenditure from the Department of Interior grant and will prepare a progress report on a semi-annual basis to the Deputy of Finance and Administrative Services, Morgan W. Paul, for review and approval.

Finding No.: 2023-008 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 2 (or 67%) of 3 purchase orders (POs), aggregating $6.1M of $6.9M in total non-payroll Program costs, no Byrd Anti-Lobbying certification was provided. Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-008, continued Federal Agency: U.S. Department of Education AL Program: 15.875 Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $0 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-009 Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: 1. GDOE charged costs to a federal award before the period of performance started and after the period of performance ended, as follows: No questioned cost is presented for the FY 2024 payroll costs because GDOE subsequently recorded journal entries between August 2024 and October 2024 to transfer such costs appropriately to grant year 2022. 2. GDOE liquidated obligations of a federal award after the approved liquidation end date, as follows: Finding No.: 2023-009, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $80,983. Identified as a Repeat Finding: 2022-004 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE agrees with Condition 1 questioned costs of $560. The questioned charges are related to TPFA purchase orders issued in fiscal year 2019, which falls outside of the period of performance. The expenditure for the 2019 purchase order was transferred from the TPFA Munis and recorded in the incorrect GDOE Munis account. GDOE disagrees with Condition 2 questioned costs of $18,041. In line with federal regulations, GDOE paid (liquidated) the obligations in question on January 4 and 26, 2024, which is before the liquidation end date of January 28, 2024. E&Y auditors are citing GDOE for the issued checks clearing the bank after the liquidation end date, however, liquidation occurs when the recipient draws funds from the grants management system and pays obligations and not specifically when checks clear the bank. Finding No.: 2023-009, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Views of Responsible Officials, continued: GDOE agrees with Condition 2 $62,382 questioned costs. While GDOE Munis system has recorded expenses of $62,382 related to Special Education (SPED) obligations, funds were not drawn for these expenditures. In GDOE’s federal review process, drawdowns are reviewed in alignment with specific conditions for allowability and in compliance with period of performance timelines. The identified funds were not expended from SPED grants. To correct this reporting deficiency, GDOE will record journal entries to transfer the expenditures to appropriate funding sources. Similarly, GDOE improperly charged $3.1 million in payroll expenditures to SPED grants after the period of performance. Subsequently, GDOE corrected this finding by making the appropriate journal entries to transfer the improperly charged payroll expenditure to the appropriate grant year. Plan of action and completion date: The GDOE will perform a monthly review of all transactions to ensure charges are recorded in the appropriate grant year. Additionally, Grant Project Managers and Program Coordinators will timely communicate to the Human Resources and Business Office any changes to accounts charged for federally funded payroll expenditures. The IAO now provides an independent review of drawdown requests – a control that will help prevent liquidation after applicable period of performance. Plan to monitor and responsible officials: Financial Affairs under the leadership of the Deputy of Finance and Administrative Services, Morgan W. Paul, and the GDOE Comptroller (vacant), will ensure an accountant is monitoring the expenditures of federal grants and the corresponding periods of performance and liquidation periods. Grant Project Managers and Federal Compliance review team will also provide timely communication for changes in grant year funding to HR relative to federal payroll. Auditor Response: Condition 1: The purchase order in 2019 constitutes an obligation prior to the period of performance start date of 07/01/2020 for Grant Year 2020. Condition 2: We acknowledge that the checks are dated prior to the liquidation end date; however, program determination letters from U.S. ED from prior years have sustained audit findings wherein auditors cited the check clearing date as the liquidation date.

Finding No.: 2023-010 Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Federal Award No.: H027A210013 Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 8 (or 67%) of 12 purchase orders (POs), no Byrd Anti-Lobbying certification was provided, as follows: Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications and small purchases. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-010, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Procurement and Suspension and Debarment Questioned Costs: $0 Identified as a Repeat Finding: 2022-005 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-009 Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: 1. GDOE charged costs to a federal award before the period of performance started and after the period of performance ended, as follows: No questioned cost is presented for the FY 2024 payroll costs because GDOE subsequently recorded journal entries between August 2024 and October 2024 to transfer such costs appropriately to grant year 2022. 2. GDOE liquidated obligations of a federal award after the approved liquidation end date, as follows: Finding No.: 2023-009, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $80,983. Identified as a Repeat Finding: 2022-004 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE agrees with Condition 1 questioned costs of $560. The questioned charges are related to TPFA purchase orders issued in fiscal year 2019, which falls outside of the period of performance. The expenditure for the 2019 purchase order was transferred from the TPFA Munis and recorded in the incorrect GDOE Munis account. GDOE disagrees with Condition 2 questioned costs of $18,041. In line with federal regulations, GDOE paid (liquidated) the obligations in question on January 4 and 26, 2024, which is before the liquidation end date of January 28, 2024. E&Y auditors are citing GDOE for the issued checks clearing the bank after the liquidation end date, however, liquidation occurs when the recipient draws funds from the grants management system and pays obligations and not specifically when checks clear the bank. Finding No.: 2023-009, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Period of Performance Questioned Costs: $80,983 Views of Responsible Officials, continued: GDOE agrees with Condition 2 $62,382 questioned costs. While GDOE Munis system has recorded expenses of $62,382 related to Special Education (SPED) obligations, funds were not drawn for these expenditures. In GDOE’s federal review process, drawdowns are reviewed in alignment with specific conditions for allowability and in compliance with period of performance timelines. The identified funds were not expended from SPED grants. To correct this reporting deficiency, GDOE will record journal entries to transfer the expenditures to appropriate funding sources. Similarly, GDOE improperly charged $3.1 million in payroll expenditures to SPED grants after the period of performance. Subsequently, GDOE corrected this finding by making the appropriate journal entries to transfer the improperly charged payroll expenditure to the appropriate grant year. Plan of action and completion date: The GDOE will perform a monthly review of all transactions to ensure charges are recorded in the appropriate grant year. Additionally, Grant Project Managers and Program Coordinators will timely communicate to the Human Resources and Business Office any changes to accounts charged for federally funded payroll expenditures. The IAO now provides an independent review of drawdown requests – a control that will help prevent liquidation after applicable period of performance. Plan to monitor and responsible officials: Financial Affairs under the leadership of the Deputy of Finance and Administrative Services, Morgan W. Paul, and the GDOE Comptroller (vacant), will ensure an accountant is monitoring the expenditures of federal grants and the corresponding periods of performance and liquidation periods. Grant Project Managers and Federal Compliance review team will also provide timely communication for changes in grant year funding to HR relative to federal payroll. Auditor Response: Condition 1: The purchase order in 2019 constitutes an obligation prior to the period of performance start date of 07/01/2020 for Grant Year 2020. Condition 2: We acknowledge that the checks are dated prior to the liquidation end date; however, program determination letters from U.S. ED from prior years have sustained audit findings wherein auditors cited the check clearing date as the liquidation date.

Finding No.: 2023-010 Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Federal Award No.: H027A210013 Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with applicable procurement and suspension and debarment requirements, all contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. Condition: For 8 (or 67%) of 12 purchase orders (POs), no Byrd Anti-Lobbying certification was provided, as follows: Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications and small purchases. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-010, continued Federal Agency: U.S. Department of Education AL Program: 84.027 Special Education Grants to States Area: Procurement and Suspension and Debarment Questioned Costs: $0 Identified as a Repeat Finding: 2022-005 Recommendation: Responsible personnel should establish and implement controls over compliance with applicable procurement and suspension and debarment requirements relative to Byrd Anti-Lobbying certifications. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Views of Responsible Officials: GDOE agrees with the finding. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance.

Finding No.: 2023-011 Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Period of Performance Questioned Costs: $11,004 Criteria: In accordance with applicable period of performance (POP) requirements, a non-federal entity may charge only allowable costs incurred during a federal award’s period of performance. Unless the federal awarding agency authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award or in the approved extension. Condition: 1. GDOE charged costs to a federal award after the period of performance ended, as follows: No questioned cost is presented for the FY 2024 payroll costs because GDOE subsequently recorded journal entries between August 2024 and October 2024 to transfer such costs appropriately to grant year 2022. 2. GDOE liquidated obligations of a federal award after the approved liquidation end date, as follows: Cause: GDOE did not enforce monitoring controls over compliance with applicable period of performance requirements. Finding No.: 2023-011, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Period of Performance Questioned Costs: $11,004 Effect: GDOE is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $11,004. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable period of performance requirements. Prior to charging costs to a federal award or liquidating obligations incurred under a federal award, responsible personnel should verify that the period of performance, including the liquidation end date, has not expired. Views of Responsible Officials: GDOE disagrees with condition 1 related to FY 2024 purchase orders (PO). GDOE PO 20240171 is a copy over of the third-party fiduciary agent (TPFA) PO 20230010 which was issued in December 2022, within the CG 21 period of performance. GDOE acknowledges that the re-issued GDOE purchase order was not timely processed, however the purchase order which encumbered the funds occurred in the appropriate performance period. Additionally, relative to payroll, FPD requests a list (i.e. Staffing Pattern) of all Federally funded personnel from HR. FPD distributes the list to CG Project Leads to validate and compare to the Federal Roster as approved in the Consolidated Grants (CG) Application. The list is updated to make any corrections necessary. Once validated by Project Leads and FPD, HR is given a memo requesting to change/correct the funding year to the new grant award. In GDOE’s Munis system, if the Human Resources (HR) employee salary records are not accurately updated, GDOE payroll will reflect dated pay tables until such time HR makes the appropriate updates based on project lead requests to update accounts to current grant year. GDOE recorded journal entries to transfer the improperly charged payroll expenditure to the appropriate grant year. Finding No.: 2023-011, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Period of Performance Questioned Costs: $11,004 Views of Responsible Officials, continued: Plan of action and completion date: The GDOE will perform a monthly review of all transactions to ensure charges are recorded in the appropriate grant year. Additionally, Grant Project Managers and Program Coordinators will work with the HR and Business Office any changes to accounts charged for federally funded payroll expenditures. IAO now provides an independent review of drawdown requests – a control that will help prevent liquidation after applicable period of performance. Plan to monitor and responsible officials: Financial Affairs under the leadership of the Deputy of Finance and Administrative Services, Morgan W. Paul, and the GDOE Comptroller (vacant), will ensure an accountant is monitoring the expenditures of federal grants and the corresponding periods of performance and liquidation periods. Grant Project Managers and Federal Compliance review team will also provide timely communication for changes in grant year funding to HR relative to federal payroll. Auditor Response: Condition 1: There is no clear notation on the GDOE PO 20240171-01 document itself or within the financial management system entry to indicate that such purchase order is a copy over of TPFA PO 2023010.

Finding No.: 2023-012 Federal Agency: U.S. Department of Education (ED) AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria: In accordance with procurement and suspension and debarment requirements, the following are applicable: 1. All contracts made by the non-Federal entity under the Federal award must contain applicable provisions. Contractors that apply or bid for an award exceeding $100,000 must file the required certification under the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Each such contractor certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, among others. 2. The U.S. Department of Education (ED) has approved the use of $250,000 as the small purchases threshold for U.S. ED Federal awards. When using small purchase procedures to procure property and services under a U.S ED Federal award, GDOE must obtain price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity. GDOE procurement regulations specify that no less than three positive written quotations from businesses shall be solicited, recorded, and placed in the procurement file. Finding No.: 2023-012, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $0 Condition: Of 25 transactions tested, aggregating $4.8M of $8.2M in total non-payroll Program costs, we noted the following: 1. For 17 (or 68%), no Byrd Anti-Lobbying certification was provided. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Finding No.: 2023-012, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $0 Condition, continued: 2. For 3 (or 12%), the small purchases method was used; however, less than three price quotations are on file. No questioned cost is presented as the procurement can be viewed as being technically compliant based on existing GDOE procurement regulations and guidance from the Office of the Attorney General of Guam. a. The procurement of digital subscriptions and online assessments of students for reading and math includes ten solicitations and three quotations, of which two indicate “no quote.” b. The procurement of school uniform vouchers includes six solicitations and six quotations, of which five indicate “no quote.” Additionally, we noted that one of the three major providers of uniforms on Guam was not solicited. c. The procurement of professional consulting services to provide training includes eight solicitations and three quotations, of which two indicate “no quote.” Cause: GDOE did not establish and implement controls over compliance with applicable procurement and suspension and debarment requirements. Effect: GDOE is in noncompliance with applicable procurement and suspension and debarment requirements. Identified as a Repeat Finding: 2022-008 Finding No.: 2023-012, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $0 Recommendation: GDOE should enforce compliance with applicable procurement and suspension and debarment requirements. Prior to providing a signed purchase order to the selected contractor, responsible personnel should verify that the contractor has provided the required Byrd Anti-Lobbying certification. Also, during the solicitation process, responsible personnel should consider requesting additional price quotations whenever a solicitation results in a response of “no quote” in order to allow other suppliers to participate in the Federally funded transaction. Views of Responsible Officials: GDOE agrees with Condition 1. Procurement records that were tested by E&Y auditors were from procurements conducted prior to GDOE’s implementation of the required certifications. GDOE had this finding in the prior year and has since made the updated changes to be standardized on all procurements exceeding $100,000. GDOE disagrees with Condition 2. In line with Title 5 of the Guam Code Annotated §5213, a “no quote” response will not be considered a positive quotation but shall be part of the procurement record, which shall further include a written record or memorandum of all solicitations and responses thereto, negative or positive, orally or in writing. In the event the agency obtains less than three (3) positive quotations and provides the attestation required by this Section, the agency may proceed with the small purchase procurement. GDOE has the required attestations on file to evidence that quotations were solicited to multiple potential vendors. Plan of action and completion date: GDOE has implemented the requirement for Byrd Anti-Lobbying Amendment certifications as part of bid submissions exceeding $100,000. All contracts now include standardized language and certification forms to ensure compliance. Plan to monitor and responsible officials: GDOE Supply Management Administrator, Carmen Charfauros, will continue to ensure that the Byrd Anti-Lobbying certification are a part of bid submissions exceeding $100,000. The IAO will conduct audits of GDOE’s formal procurements to ensure compliance. Finding No.: 2023-012, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $0 Auditor Response: Condition 2: In accordance with US ED’s Specific Conditions, this US ED grant is subject to the Uniform Guidance procurement requirements for non-Federal entities, e.g., 2 CFR 200.320, which requires price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity. The number determined adequate by GDOE is no less than three.

Finding No.: 2023-013 Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Federal Award No.: S403A220002 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, an Insular Area will submit an annual report containing information covering the program or programs for which the grant is used and administered, including the financial and program performance information required. Condition: The total reported amount expended per the FFY 2022 Consolidated Grant Quarterly Report, dated 10/31/2023, differs from that of underlying accounting records by $3.5M, as follows: Cause: GDOE did not enforce monitoring controls over compliance with applicable reporting requirements. Effect: GDOE is in noncompliance with applicable reporting requirements. No questioned cost is presented as the variance does not represent an overpayment. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable reporting requirements. Prior to certifying reports, responsible personnel should verify reported amounts against underlying accounting records and should retain such records to substantiate reported amounts. Finding No.: 2023-013, continued Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grant to the Outlying Areas Federal Award No.: S403A220002 Area: Reporting Questioned Costs: $0 Views of Responsible Officials: GDOE disagrees with the finding. GDOE is required to submit an annual report that includes financial and program performance information relative to Consolidated Grants (CG). GDOE’s FFY 2022 CG Quarterly Report, dated October 31, 2023, reported a total expenditure amount that differs from accounting records by $3.5 million. The information cited in the finding references data from a quarterly monitoring tool, which is used for internal tracking and management purposes. However, GDOE is only required to submit programmatic and financial data in its annual report as required in 34 CFR 76.132(a)(5) and further reiterated in the criteria of this finding. The official reporting obligation is limited to the data submitted in the Annual Performance Report (APR). Plan of action and completion date: GDOE disagrees with the finding. However, to ensure the proper enforcement of monitoring controls and allow for a more accurate tool used for internal tracking and management purposes, the Federal Programs Division will remove the cited financial information from its quarterly reports. To best capture this information, the Federal Programs Division will now require this information be submitted and certified by the GDOE accounting team. Auditor Response: The FFY 2022 Consolidated Grant annual performance report was not provided and is not published at GDOE’s website. The annual report given to the auditors in response to this finding was for ALN 84.425 Education Stabilization Fund and not for ALN 84.403.

Finding No.: 2023-014 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Criteria: In accordance with applicable allowable cost/cost principles requirements, costs must be reasonable for the performance of the Federal award. Also, in accordance with property standards, if there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other Federal award, the non-Federal entity must retain the supplies for use on other activities or sell them, but must, in either case, compensate the Federal Government for its share. Condition: Out of $7.5M in non-payroll expenditures for equipment, we noted $5.2M pertained to the acquisition of 2,467 high efficiency particulate absorbing (HEPA) filtration units at a cost of $2,089.05 per unit, under PO number 20221923, dated July 12, 2022. Of the 2,467 units, 181 units (or 7%), totaling $378,118, remain undistributed and uninstalled as of September 30, 2024, exceeding one year from acquisition dates in November 2022 Simon Sanchez High School (SSHS) and February 2023 for F.B. Leon Guerrero Middle School (FBLG). At SSHS, the units were installed and in use in October 2022. However, due to the damages sustained by Typhoon Mawar in May 2023, SSHS has remained closed, and the units remain idle and secured at the school. FBLG was closed since December 2022 based on a structural engineering inspection report, dated September 13, 2022. The vendor delivered the units in February 2023 to Tiyan High School (THS) for storage. In this case, it would appear that GDOE might have had a two-month opportunity to cancel the FBLG order. We understand that all other schools have received their units and have no need for any additional. No planning documentation was provided for the unused supplies. Finding No.: 2023-014, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Cause: Although the typhoon damages sustained at SSHS are beyond GDOE’s control, GDOE did not enforce monitoring controls over compliance with applicable allowable costs/cost principles requirements for the FBLG units and property standards for the SSHS and FBLG units. Effect: GDOE is in noncompliance with applicable allowable costs/cost principles requirements and property standards. The total reportable questioned cost is $378,118. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable allowable costs/cost principles requirements and property standards. GDOE should consider seeking guidance from U.S. ED as to the disposition of the unused filtration units and any resulting compensation for the Federal share. Views of Responsible Officials: GDOE disagrees with the condition related to Simon Sanchez High School (SSHS) as the units were used prior to the school’s closure. The units for SSHS were received and installed in October 2022. According to the school principal, all units were utilized in classrooms and offices. Following Typhoon Mawar, the school was deemed unsafe for occupancy, prompting the relocation of all units to a secured location. GDOE agrees with the condition related to F.B. Leon Guerrero Middle School (FBLGMS). However, GDOE would like to clarify that the units for FBLGMS were initially delivered to JP Torres for staging and assembly in December 2022, which coincided with the closure of the school. In February 2023, the unused units were transferred to Tiyan High School for secure storage. The units will continue to be securely stored until the new school facilities have completed construction in school year 2025-2026 and 2026-2027. Finding No.: 2023-014, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Views of Responsible Officials, continued: Plan of action and completion date: GDOE plans to utilize the HEPA filtration systems across other federal awards from the same granting agency, to include the Consolidated Grant and Special Education programs. GDOE will also utilize the units as replacements for other schools as needed. Plan to monitor and responsible officials: Program Coordinator, Cellini Higa, will coordinate the use of the HEPA units for other federal awards and replacements for other schools. Auditor Response: Based on receiving reports provided to the auditors, the finding now reflects that the SSHS units were installed in October 2022, whereas the acquisition date of 11/15/2022 is based on GDOE’s fixed asset listing. GDOE has not provided a written assessment of the supplies which have remained unused for seventeen months between May 2023 and October 2024.

Finding No.: 2023-015 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Criteria: In accordance with applicable matching, level of effort, earmarking requirements and section 18008 of the CARES Act, the State will maintain support for elementary and secondary education, and State support for higher education, at least at the levels of such support that is the average of such State’s support for elementary and secondary education and for higher education provided in fiscal years 2017, 2018, and 2019. Such average is defined as the baseline. Furthermore, a State must use the same data sources in determining overall State spending for the baseline years and FY 2023. Condition: GDOE has not submitted final 2023 expenditure data for elementary/secondary education, higher education, and overall Outlying Area spending. Based on our reading of email communications from U.S. ED, Education Program Specialist, Insular Areas, in September 2024, we noted that U.S. ED is aware of such pending submission. Calculations using preliminary data appear to indicate that GDOE’s maintenance of effort for FY 2023 may be deficient, as follows: Finding No.: 2023-015, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Cause: GDOE did not enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Effect: GDOE appears to be in noncompliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. No questioned cost is presented because the source data for determining overall State spending for the baseline years was the State’s Single Audit Reports, and the State’s Single Audit Report for FY 2023 is yet to be issued. Identified as a Repeat Finding: 2022-010 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Responsible personnel should work in close liaison with Government of Guam to verify the State’s overall spending levels. Views of Responsible Officials: GDOE disagrees with the finding. The final 2023 data for the Maintenance of Effort (MOE) will be based on the audited financials for FY 2023 as approved in GDOE’s communication with USEd. Since the audits for GDOE and the Government of Guam were both delayed, the final data needed to complete the MOE calculation was not available. GDOE was proactive in providing USEd with preliminary calculations using appropriated amounts for elementary and secondary education which indicated that the MOE fell within the acceptable one percent of the baseline. GDOE believes that it cannot be held to an audit finding for an MOE when the MOE calculation has yet to be finalized. Additionally, GDOE was approved for waivers in FY 2022. Upon completion of this year’s audit and calculation of MOE, GDOE is still subject to a waiver request approval which would negate the MOE finding identified. Finding No.: 2023-015, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Views of Responsible Officials, continued: Plan of action and completion date: Once the financial audits for GDOE and GovGuam are complete, the final FY 2023 MOE will be calculated. Should the FY 2023 MOE fall short of the baseline, a waiver request will be submitted to USEd. The submission of final data and waiver request, if needed, will be completed by December 30, 2024. Plan to monitor and responsible officials: The Internal Audit Office will ensure that the final MOE data is calculated and, if needed, a waiver request is prepared and submitted. Auditor Response: Although the Government of Guam’s audited financial statements have not been issued, GDOE has the ability to coordinate with the Government of Guam’s Division of Accounts to obtain the State’s preliminary overall spending data for purposes of monitoring the extent of potential MOE deficiencies. Such monitoring is key in GDOE’s communications with US ED over compliance with maintenance of effort requirements.

Finding No.: 2023-016 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, reported amounts should be substantiated by underlying accounting records. Condition: FY 2023 expenditure amounts reported in the required annual report differ from underlying accounting records, as follows: Cause: GDOE did not enforce monitoring controls over compliance with reporting requirements. Effect: GDOE is in noncompliance with applicable reporting requirements. No questioned cost is presented as the variances do not represent overpayments. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should retain underlying accounting records used during report preparation to substantiate reported amounts. Finding No.: 2023-016, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund Area: Reporting Questioned Costs: $0 Views of Responsible Officials: GDOE disagrees with the finding. Annual reports are prepared at a point in time. GDOE submitted the required annual reports for ESF I, ESF II, and ARP on May 23, 2023. Auditors referencing figures in the annual report should also be reconciling to the same period covered and utilized in the financial reporting, as transactions and adjustments occur in the system after the reports are submitted. Plan of action and completion date: GDOE disagrees with the finding but will continue to monitor all federal financial reporting for accuracy and timely submission per the grant requirements. Auditor Response: GDOE did not provide underlying accounting records or a reconciliation to substantiate reported amounts.

Finding No.: 2023-014 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Criteria: In accordance with applicable allowable cost/cost principles requirements, costs must be reasonable for the performance of the Federal award. Also, in accordance with property standards, if there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other Federal award, the non-Federal entity must retain the supplies for use on other activities or sell them, but must, in either case, compensate the Federal Government for its share. Condition: Out of $7.5M in non-payroll expenditures for equipment, we noted $5.2M pertained to the acquisition of 2,467 high efficiency particulate absorbing (HEPA) filtration units at a cost of $2,089.05 per unit, under PO number 20221923, dated July 12, 2022. Of the 2,467 units, 181 units (or 7%), totaling $378,118, remain undistributed and uninstalled as of September 30, 2024, exceeding one year from acquisition dates in November 2022 Simon Sanchez High School (SSHS) and February 2023 for F.B. Leon Guerrero Middle School (FBLG). At SSHS, the units were installed and in use in October 2022. However, due to the damages sustained by Typhoon Mawar in May 2023, SSHS has remained closed, and the units remain idle and secured at the school. FBLG was closed since December 2022 based on a structural engineering inspection report, dated September 13, 2022. The vendor delivered the units in February 2023 to Tiyan High School (THS) for storage. In this case, it would appear that GDOE might have had a two-month opportunity to cancel the FBLG order. We understand that all other schools have received their units and have no need for any additional. No planning documentation was provided for the unused supplies. Finding No.: 2023-014, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Cause: Although the typhoon damages sustained at SSHS are beyond GDOE’s control, GDOE did not enforce monitoring controls over compliance with applicable allowable costs/cost principles requirements for the FBLG units and property standards for the SSHS and FBLG units. Effect: GDOE is in noncompliance with applicable allowable costs/cost principles requirements and property standards. The total reportable questioned cost is $378,118. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable allowable costs/cost principles requirements and property standards. GDOE should consider seeking guidance from U.S. ED as to the disposition of the unused filtration units and any resulting compensation for the Federal share. Views of Responsible Officials: GDOE disagrees with the condition related to Simon Sanchez High School (SSHS) as the units were used prior to the school’s closure. The units for SSHS were received and installed in October 2022. According to the school principal, all units were utilized in classrooms and offices. Following Typhoon Mawar, the school was deemed unsafe for occupancy, prompting the relocation of all units to a secured location. GDOE agrees with the condition related to F.B. Leon Guerrero Middle School (FBLGMS). However, GDOE would like to clarify that the units for FBLGMS were initially delivered to JP Torres for staging and assembly in December 2022, which coincided with the closure of the school. In February 2023, the unused units were transferred to Tiyan High School for secure storage. The units will continue to be securely stored until the new school facilities have completed construction in school year 2025-2026 and 2026-2027. Finding No.: 2023-014, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund - State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Allowable Costs/Cost Principles Questioned Costs: $378,118 Views of Responsible Officials, continued: Plan of action and completion date: GDOE plans to utilize the HEPA filtration systems across other federal awards from the same granting agency, to include the Consolidated Grant and Special Education programs. GDOE will also utilize the units as replacements for other schools as needed. Plan to monitor and responsible officials: Program Coordinator, Cellini Higa, will coordinate the use of the HEPA units for other federal awards and replacements for other schools. Auditor Response: Based on receiving reports provided to the auditors, the finding now reflects that the SSHS units were installed in October 2022, whereas the acquisition date of 11/15/2022 is based on GDOE’s fixed asset listing. GDOE has not provided a written assessment of the supplies which have remained unused for seventeen months between May 2023 and October 2024.

Finding No.: 2023-015 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Criteria: In accordance with applicable matching, level of effort, earmarking requirements and section 18008 of the CARES Act, the State will maintain support for elementary and secondary education, and State support for higher education, at least at the levels of such support that is the average of such State’s support for elementary and secondary education and for higher education provided in fiscal years 2017, 2018, and 2019. Such average is defined as the baseline. Furthermore, a State must use the same data sources in determining overall State spending for the baseline years and FY 2023. Condition: GDOE has not submitted final 2023 expenditure data for elementary/secondary education, higher education, and overall Outlying Area spending. Based on our reading of email communications from U.S. ED, Education Program Specialist, Insular Areas, in September 2024, we noted that U.S. ED is aware of such pending submission. Calculations using preliminary data appear to indicate that GDOE’s maintenance of effort for FY 2023 may be deficient, as follows: Finding No.: 2023-015, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Cause: GDOE did not enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Effect: GDOE appears to be in noncompliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. No questioned cost is presented because the source data for determining overall State spending for the baseline years was the State’s Single Audit Reports, and the State’s Single Audit Report for FY 2023 is yet to be issued. Identified as a Repeat Finding: 2022-010 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable matching, level of effort, earmarking requirements relative to maintenance of effort requirements. Responsible personnel should work in close liaison with Government of Guam to verify the State’s overall spending levels. Views of Responsible Officials: GDOE disagrees with the finding. The final 2023 data for the Maintenance of Effort (MOE) will be based on the audited financials for FY 2023 as approved in GDOE’s communication with USEd. Since the audits for GDOE and the Government of Guam were both delayed, the final data needed to complete the MOE calculation was not available. GDOE was proactive in providing USEd with preliminary calculations using appropriated amounts for elementary and secondary education which indicated that the MOE fell within the acceptable one percent of the baseline. GDOE believes that it cannot be held to an audit finding for an MOE when the MOE calculation has yet to be finalized. Additionally, GDOE was approved for waivers in FY 2022. Upon completion of this year’s audit and calculation of MOE, GDOE is still subject to a waiver request approval which would negate the MOE finding identified. Finding No.: 2023-015, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425A Education Stabilization Fund–State Educational Agency (Outlying Areas) (ESF-SEA) Federal Award No.: COVID-19 S425A210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $0 Views of Responsible Officials, continued: Plan of action and completion date: Once the financial audits for GDOE and GovGuam are complete, the final FY 2023 MOE will be calculated. Should the FY 2023 MOE fall short of the baseline, a waiver request will be submitted to USEd. The submission of final data and waiver request, if needed, will be completed by December 30, 2024. Plan to monitor and responsible officials: The Internal Audit Office will ensure that the final MOE data is calculated and, if needed, a waiver request is prepared and submitted. Auditor Response: Although the Government of Guam’s audited financial statements have not been issued, GDOE has the ability to coordinate with the Government of Guam’s Division of Accounts to obtain the State’s preliminary overall spending data for purposes of monitoring the extent of potential MOE deficiencies. Such monitoring is key in GDOE’s communications with US ED over compliance with maintenance of effort requirements.

Finding No.: 2023-016 Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, reported amounts should be substantiated by underlying accounting records. Condition: FY 2023 expenditure amounts reported in the required annual report differ from underlying accounting records, as follows: Cause: GDOE did not enforce monitoring controls over compliance with reporting requirements. Effect: GDOE is in noncompliance with applicable reporting requirements. No questioned cost is presented as the variances do not represent overpayments. Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should retain underlying accounting records used during report preparation to substantiate reported amounts. Finding No.: 2023-016, continued Federal Agency: U.S. Department of Education (ED) AL Program: 84.425 Education Stabilization Fund Area: Reporting Questioned Costs: $0 Views of Responsible Officials: GDOE disagrees with the finding. Annual reports are prepared at a point in time. GDOE submitted the required annual reports for ESF I, ESF II, and ARP on May 23, 2023. Auditors referencing figures in the annual report should also be reconciling to the same period covered and utilized in the financial reporting, as transactions and adjustments occur in the system after the reports are submitted. Plan of action and completion date: GDOE disagrees with the finding but will continue to monitor all federal financial reporting for accuracy and timely submission per the grant requirements. Auditor Response: GDOE did not provide underlying accounting records or a reconciliation to substantiate reported amounts.