Finding No.: 2025-003 – Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: U.S. Department of Agriculture AL No. and Title: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 180.300, entities that enter into covered transactions must verify that the person with whom they intend to do business is not excluded or disqualified by: a) Checking SAM.gov Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person. According to 2 CFR 180.220(b)(1), a procurement transaction is considered a covered transaction if the contract amount is expected to equal or exceed $25,000. Condition: GDOE did not verify whether subrecipients are excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into covered transactions. Cause: GDOE did not enforce controls over compliance with the applicable requirements relative to suspension and debarment of subrecipients. Effect or Potential Effect: GDOE is in noncompliance with the applicable procurement and suspension and debarment requirements compliance requirements. Questioned Costs: $744,643. The questioned costs relate to the FY25 expenditures of procurement transactions where the required verification before entering into covered transaction was not performed. Per auditors’ verification, the subrecipients with whom GDOE transacted business with are not suspended or debarred as of September 30, 2025. Context: We identified and tested all three subawards subject to suspension and debarment compliance requirements during the year totaling $744,643. The samples were statistically valid. For all 3 (or 100%) subawards tested, the required verification before entering into covered transaction was not performed. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: GDOE Food Nutrition and Management Services (FNMS) Division should implement procedures to verify that subrecipients are not suspended, debarred, or otherwise excluded from federal assistance prior to each agreement renewal and retain documentation of the verification performed. Views of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.
Finding No.: 2025-004 – Reporting Identification of the federal program: Federal Agency: U.S. Department of Agriculture AL No. and Title: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Criteria or specific requirement (including statutory, regulatory or other citation): 7 CFR 226.7(d) states: Each State agency shall also submit to FNS a quarterly Financial Status Report (FNS-777) on the use of Program funds. Such reports shall be postmarked and/or submitted no later than 30 days after the end of each fiscal year quarter. Obligations shall be reported only for the fiscal year in which they occur. A final Financial Status Report for each fiscal year shall be postmarked and/or submitted to FNS within 120 days after the end of the fiscal year. FNS shall not be responsible for reimbursing unpaid Program obligations reported later than 120 days after the close of the fiscal year in which they were incurred. Further, financial reports should be traceable to accounting records that support the audited financial statements and the Schedule of Expenditures of Federal Awards. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, 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). 2 CFR Appendix-A-to-Part-170(a)(1) states: (1) Applicability. Unless the recipient is exempt as provided in paragraph (d) of this award term, the recipient must report each subaward that equals or exceeds $30,000 in Federal funds for a subaward to an entity or Federal agency. The recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward. Conditions: 1. We noted variances between the expenditures reported in Financial Status Report FNS 777 Quarter 1 Report against the underlying accounting records as summarized below: FY25 QTR 1 (10/01/24 - 12/30/24) Total per Expenditure Details Over (Under) Reported variance STATUS OF FUNDS PROGRAMS/FUNCTIONS/ACTIVITIES Total outlays this report period $2,344,464 $5,350,607 ($3,006,143) Less: Program income credits - - - Net outlays this report period (Line b minus line c) 2,344,464 5,350,607 ( 3,006,143) Net outlays to date (Line a plus line d) 2,344,464 5,350,607 (3,006,143) Less: Non-Federal Share of outlays - - - Total Federal share of outlays (Line e minus line f) 2,344,464 5,350,607 (3,006,143) Total unliquidated obligations 3,107,529 1,669,399 1,438,130 Less: Non-Federal Share of unliquidated obligations shown on line h - - - Federal share of unliquidated obligations 3,107,529 1,669,399 1,438,130 Total Federal share of outlays and unliquidated obligations 5,451,993 7,020,006 (1,568,013) Total cumulative amount of Federal fund authorized 3,967,521 3,950,885 16,636 Unobligated balance of Federal funds ($1,484,472) ($3,069,121) $ 1,584,649 2. We noted variances between the expenditures reported in Financial Status Report FNS 777 Quarter 3 Report against the underlying accounting records as summarized below: FY25 QTR 3 (04/01/25 - 06/30/25) Total per Expenditure Details Over (Under) Reported variance STATUS OF FUNDS PROGRAMS/FUNCTIONS/ACTIVITIES Net outlays previously reported $ 9,643,180 $11,537,658 ($1,894,478) Total outlays this report period 1,510,303 3,264,946 ( 1,754,643) Less: Program income credits - - - Net outlays this report period (Line b minus line c) 1,510,303 3,264,946 ( 1,754,643) Net outlays to date (Line a plus line d) 11,153,483 14,802,604 ( 3,649,121) Less: Non-Federal Share of outlays - - - Total Federal share of outlays (Line e minus line f) 11,153,483 14,802,604 ( 3,649,121) Total unliquidated obligations 3,459,149 3,277,821 181,328 Less: Non-Federal Share of unliquidated obligations shown on line h - - - Federal share of unliquidated obligations 3,459,149 3,277,821 181,328 Conditions, continued: FY25 QTR 3 (04/01/25 - 06/30/25) Total per Expenditure Details Over (Under) Reported variance Total Federal share of outlays and unliquidated obligations 14,612,632 18,080,425 (3,467,793) Total cumulative amount of Federal fund authorized 15,910,166 15,871,080 39,086 Unobligated balance of Federal funds $ 1,297,534 ($ 2,209,345) $ 3,506,879 3. Subawards are not reported in FSRS, as follows: Transactions Tested Subaward Not Reported Dollar Amount of Tested Transactions Subaward Not Reported 3 3 $744,643 $744,643 Cause: GDOE did not enforce controls over compliance with the applicable reporting requirement relative to Financial Status Report FNS 777. Moreover, GDOE lacks controls over compliance with applicable reporting requirements relative to Federal Funding Accountability and Transparency Act. Effect or Potential Effect: GDOE is in noncompliance with applicable reporting requirements. Questioned Costs: Not applicable. No questioned cost is presented as the non-compliance was related to reporting requirements. Context: We identified four quarterly FNS-777 Financial Status Reports required to be submitted during the year. We tested two quarterly reports. The samples were statistically valid. Variances between the expenditures reported and underlying accounting records were noted for all two quarterly reports tested. Moreover, for all 3 (or 100%) subawards tested, subawards are not reported in FSRS. Identification as a repeat finding, if applicable: 2024-004 Recommendation: Responsible personnel should implement controls over compliance with applicable reporting requirements relative to submitting accurate reporting of FNS-777. Moreover, GDOE should establish controls over compliance with applicable reporting requirements relative to Federal Funding Accountability and Transparency Act. Views of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.
Finding No.: 2025-005 – Matching, Level of Effort, Earmarking Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.027 Special Education Cluster (IDEA) Federal Award No.: H027A230013, H027A250013 Criteria or specific requirement (including statutory, regulatory or other citation) #1: 34 CFR 300.163(a) states: (a) General. A State must not reduce the amount of State financial support for special education and related services for children with disabilities, or otherwise made available because of the excess costs of educating those children, below the amount of that support for the preceding fiscal year. Criteria or specific requirement (including statutory, regulatory or other citation) #2: 34 CFR 300.208 Permissive use of funds states: (a) Uses. Notwithstanding §§ 300.202, 300.203(b), and 300.162(b), funds provided to an LEA under Part B of the Act may be used for the following activities: (1) Services and aids that also benefit nondisabled children. For the costs of special education and related services, and supplementary aids and services, provided in a regular class or other education-related setting to a child with a disability in accordance with the IEP of the child, even if one or more nondisabled children benefit from these services. (2) Early intervening services. To develop and implement coordinated, early intervening educational services in accordance with § 300.226. (3) High cost special education and related services. To establish and implement cost or risk sharing funds, consortia, or cooperatives for the LEA itself, or for LEAs working in a consortium of which the LEA is a part, to pay for high cost special education and related services. 34 CFR 300.704(b) Other State-level activities states: (4) Funds reserved under paragraph (b)(1) of this section also may be used to carry out the following activities: (i) For support and direct services, including technical assistance, personnel preparation, and professional development and training. The approved Guam application for Federal Fiscal Year (FFY) IDEA Part B funds further provides that each outlying area may reserve for State Administration not more than 5 percent of the amount received under the program or $35,000, whichever is greater. Condition #1: GDOE’s financial support for special education and related services for children with disabilities in the current year decreased by $578,698 compared to preceding fiscal year. Condition #2: GDOE exceeded the 5% maximum spending for administration costs (earmarking requirement). Cause #1: GDOE does not have procedures to regularly monitor and track state financial support for special education and related services of participating agencies. GDOE’s current policies and procedures only require participating agencies to submit completed Documentation of Maintenance of State Financial Support form that identifies the total local funding by August 31 of each year. GDOE did not have sufficient time to resolve the resulting deficiency prior to year-end. Cause #2: GDOE did not consistently classify state, non-state administrative costs and other State-level activities in accordance with State Administration activity requirements, resulting in costs being erroneously classified as non-State administrative activities. Effect or Potential Effect: GDOE is in noncompliance with applicable level of effort and earmarking requirements. Questioned Costs #1: $578,698. The questioned costs relate to the deficiency of financial support in the current year. Questioned Costs #2: Undeterminable Context #1: We compared GDOE’s financial support for special education and related services for children with disabilities in the current fiscal year against the preceding fiscal year and noted current fiscal year’s financial support of $17,460,477 is below the amount of support for the preceding fiscal year of $18,039,175. Context #2: We identified 8,664 transactions totaling approximately $16.6 million charged to the program that are classified as non-State administrative activities. We tested 40 transactions totaling $89,602. The samples were statistically valid. Of 40 transactions tested, two transactions (or 5%) appear to be improperly classified as non-State administration costs, as follow: Item # Invoice Number Description Cost 1 FD250147 Conferences/registration fees $2,490 2 TVL50525 Hotel 654 $3,144 The expenditures do not meet the criteria for permissive use of funds and appear to meet the criteria for other State-level activities, for which GDOE does not reserve funds for. At the error rate identified of 5%, we project that total expenditures improperly classified as non-State administration costs is approximately $583,516. As a result, GDOE approximately exceeded the 5% maximum threshold for administrative costs by $600,731 (calculated as $1,539,410 approximate administrative costs less $938,679 maximum amount). Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation #1: GDOE should strengthen periodic monitoring procedures and coordination with participating state agencies to track state financial support for special education and related services throughout the fiscal year. GDOE should obtain periodic expenditure information, compare projected expenditures to the prior-year maintenance level, and communicate potential shortfalls timely to allow corrective action before fiscal year-end. Recommendation #2: GDOE should enhance monitoring of state and non-state administrative costs for appropriate evaluation throughout the fiscal year. View of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.
Finding No.: 2025-007 – Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.027 Special Education Cluster (IDEA) Federal Award No.: H027A230013, H027A240013 Criteria or specific requirement (including statutory, regulatory or other citation) #1: 2 CFR 200.318(i) Procurement Records states: “The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price.” 2 CFR 200.320 provides for three types of procurement methods, namely: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures. Per GDOE SOP 200-031, Competitive Selection Procedures for Services – Request for Proposals (RFP), the RFP method is generally used for procurement method for professional thresholds above the simplified acquisition threshold limit of $250,000. 2 GAR division §6101 (4)(c)(5)(a) states “Upon the agreement of the parties, the quantity of supplies or services or both specified in this contract may be increased by a maximum of ten percent (10%) provided: (i) the unit prices will remain the same (except for any price adjustments otherwise applicable); and (ii) the Procurement Officer makes a written determination that such an increase will either be more economical than awarding another contract or that it would not be practical to award another contract” In accordance with 2 CFR 180.300, entities that enter into covered transactions must verify that the person with whom they intend to do business is not excluded or disqualified by: a) Checking SAM.gov Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person. According to 2 CFR 180.220(b)(1), a procurement transaction is considered a covered transaction if the contract amount is expected to equal or exceed $25,000. Condition #1: The procurement method used by GDOE related to Purchase Order (PO) No. 20250241 amounting to $245,245 is not compliant for the following reasons: a. GDOE entered into two separate procurements using simplified acquisition method (i.e., Request for Quote) for similar professional services in PO 20250241 dated April 3, 2025 originally amounting $245,245 and PO 20241777 dated September 16, 2024 amounting to $181,035. Combined, the amount would have required the use of an RFP which is a competitive selection procedure. b. GDOE completed the procurement for PO No. 20250241 on March 25, 2025, which is a date subsequent to the start date of the service period covering October 1, 2024 to September 30, 2025. c. The PO was modified on September 4, 2025 increasing the contract price from $245,245 to $269,770 (or 10%) of the original amount. There is no written determination that such an increase will either be more economical than awarding another contract or that it would not be practical to award another contract. Condition #2: For the following procurement transactions, GDOE did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into covered transactions: Purchase Order # Purchase Order Amount FY25 Expenditure 20250241 $269,770 $269,548 20250133 150,291 29,357 20250756 137,133 119,264 20250090 76,760 41,124 20251079 43,816 43,816 20250102 34,981 34,981 $712,751 $538,090 Cause #1: The end user believes that a separate procurement for similar services is allowable if the funding source of such procurement is different. Cause #2: GDOE’s policies and procedures only require a review of excluded parties in SAM.gov for competitive selection procedures covering contracts exceeding $250,000. However, this is only performed for new vendors during the vendor registration or creation process and not on per covered transaction basis. In addition, GDOE’s policies do not specify how the performance of the vendor review should be documented, hence, there was no trail whether such was actually performed. Effect or Potential Effect: GDOE is in noncompliance with the applicable procurement and suspension and debarment requirements compliance requirements. Questioned Costs: $538,090. The questioned costs relate to the FY25 expenditures of procurement transactions where the required verification before entering into covered transaction was not performed. Per auditors’ verification, the vendors with whom GDOE transacted business with are not suspended or debarred as of September 30, 2025. Context #1: We identified 58 procurement transactions during the year totaling $716,896. We tested 14 procurement transactions totaling $461,614. The samples were statistically valid. Of 14 procurement transactions tested, one procurement transaction (or 7%) is not compliant with federal requirements due to inappropriate procurement method used. Context #2: We identified and tested all 6 procurement transactions subject to suspension and debarment compliance requirements during the year totaling $538,090. The samples were statistically valid. For all 6 (or 100%) procurement transactions tested, the required verification before entering into covered transaction was not performed. Identification as a repeat finding, if applicable: 2024-007 Recommendation: GDOE should revisit its procurement policies and ensure all required provisions stated in the Compliance Supplement are covered, including the explicit requirement under 2 GAR division §6101 (4)(c)(5)(a). GDOE should establish formal policy requiring verification and retaining documentation of procedures performed, to verify that the person in a covered transaction with whom they intend to do business is not excluded or disqualified. View of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.
Finding No.: 2025-009 – Period of Performance Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.181 Special Education - Grants for Infants and Families Federal Award No.: H181A220008 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.344(c) states: The recipient must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the conclusion of the period of performance. When justified, the Federal agency or pass-through entity may approve extensions for the recipient or subrecipient. Condition: GDOE liquidated an obligation of a federal award after the approved liquidation end date. Cause: GDOE lacks established internal control policies and procedures relating to timely liquidation of obligations. Effer of potential effect: GDOE is in noncompliance with applicable period of performance requirements. Questioned Costs: $32,733 Context: We identified 150 transactions recorded near the end of the period of performance totaling $364,749. We tested 36 transactions totaling $101,537. The samples were statistically valid. Of 36 transactions tested, one transaction (or 3%) was liquidated after the approved liquidation end date which relates to the only cost charged to grant year 2022 with POP end date of September 30, 2024 and liquidation end date of March 10, 2026. All other samples were for costs charged to grant year 2023 with POP end date of September 30, 2025 and liquidation end date January 30, 2026. The exception is an isolated instance. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: GDOE should establish and implement internal control policies and procedures over compliance with applicable period of performance requirements, specifically, ensuring liquidation of obligations occur within the allowable time period. View of Responsible Officials: GDOE agrees with the condition, however, does not agree with the cause and provides details in its Corrective Action Plan. Conclusion: GDOE’s existing procedures are not suitably designed to ensure that liquidation of the obligation occurs within the allowable time period. The cause of the finding remains.
Finding No.: 2025-006 – Period of Performance Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.027 Special Education Cluster (IDEA) 84.181 Special Education - Grants for Infants and Families 84.403 Consolidated Grants Federal Award No. H027A230013 H181A220008, H181A230008 S403A220002, S403A230002 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 states: The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: GDOE does not have internal controls to ensure that liquidation of the obligation occurs within the allowable time period. Cause: GDOE’s internal control policies and procedures in place are not suitably designed to ensure that liquidation of the obligation occurs within the allowable time period. Effect or potential effect: GDOE did not comply with the requirements of 2 CFR 200.303. Questioned Costs: Not applicable. The finding relates solely to an internal control deficiency. Context: We performed inquiries and walkthrough of GDOE’s process for complying with the period of performance requirements. Based on procedures performed, we have not identified internal controls addressing the timely liquidation of obligations required by the compliance requirement. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: GDOE should establish and implement internal control policies and procedures over compliance with applicable period of performance requirements, specifically, ensuring liquidation of obligations occur within the allowable time period. View of Responsible Officials: GDOE disagrees with the condition of the finding, however, acknowledges the need to update its SOP and has provided details in its Corrective Action Plan. Conclusion: GDOE’s existing procedures are not suitably designed to ensure that liquidation of the obligation occurs within the allowable time period. The finding remains.
Finding No.: 2025-008 – Cash Management Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.181 Special Education - Grants for Infants and Families 84.403 Consolidated Grants Federal Award No. H181A220008, H181A230008, H181A240008 S403A220002, S403A230002, S403A240002 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 states: The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: GDOE does not have internal controls to ensure that vendors for federal expenditure are paid either on the same day or within 24 hours after funds had been received. Cause: The current Standard Operating Procedures (SOPs) do not clearly incorporate transitioned roles and responsibilities of the Third Party Fiduciary Agent (TPFA) for accountability to the specific conditions set by the US Department of Education. Effect or potential effect: GDOE did not comply with the requirements of 2 CFR 200.303. Questioned Costs: Not applicable. The finding relates solely to an internal control deficiency. Context: We performed inquiries and walkthrough of GDOE’s process and we have not identified internal controls to ensure compliance with applicable cash management requirements. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: GDOE should establish and implement internal control policies and procedures over compliance with applicable cash management requirements. View of Responsible Officials: GDOE does not agree with the finding and provides details in its Corrective Action Plan. Conclusion: The FY25 U.S. Department of Education carried forward the FY24 Specific Conditions dated June 24, 2024 which states that “Now that GDOE is managing its Department funds independently without TPFA oversight, GDOE must continue to fulfill the responsibilities that were previously performed by the TPFA.” The finding remains.
Finding No.: 2025-010 – Allowable Costs/ Cost Principles Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.403 Consolidated Grants Federal Award No: S403A240002 Criteria or specific requirement (including statutory, regulatory or other citation): GDOE SOP 200-037, Requisition Entry (Amended May 2024), states: “Federally funded requisitions are approved by the program manager and Federal Programs to ensure grant compliance.” Condition: Determination of Need (DON) document had no Federal Program Officer approval. Cause: Routing workflow for newly created project account codes for the program was not set up accordingly. Effect or potential effect: Federally funded requisitions under the newly created program account codes were not routed to the required approvers prior to purchase processing. Questioned costs: Not applicable. The finding relates solely to an internal control deficiency. Context: We identified 2,750 nonpayroll transactions subject to allowable costs/ cost principles compliance requirements during the year. We tested 60 nonpayroll transactions. The samples were statistically valid. For 3 (or 5%) nonpayroll transactions tested, the related DON document had no Federal Program Officer approval. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: Management should ensure routing workflow is setup accordingly for every newly created program account code. View of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.
Finding No.: 2025-011 – Cash Management Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.403 Consolidated Grants Federal Award No. S403A220002, S403A230002, S403A240002 Criteria or specific requirement (including statutory, regulatory or other citation): The FY25 U.S. Department of Education carried forward the FY24 Specific Conditions dated June 24, 2024 which states that “Now that GDOE is managing its Department funds independently without Third-Party Fiduciary Agent (TPFA) oversight, GDOE must continue to fulfill the responsibilities that were previously performed by the TPFA”. Responsibilities performed by the TPFA per the FY23 U.S. Department of Education Specific Conditions, Responsibilities and Requirements of the TPFA, states that “the Agent must pay vendors for the delivered goods or services and must, to the extent possible, disburse funds to the vendors on the same day the funds are deposited.” Condition: GDOE did not pay vendors for expenditures incurred under the federal program either on the same day or within 24 hours after federal funds had been received. Cause: The condition appears to have resulted from inadequate monitoring and controls over vendor payments and insufficient review to ensure that disbursements complied with established cash management requirements. The current Standard Operating Procedures (SOPs) do not clearly incorporate transitioned roles and responsibilities of the Third Party Fiduciary Agent (TPFA) for accountability to the specific conditions set by the US Department of Education. Furthermore, the FY25 U.S. Department of Education Specific Conditions that requires GDOE to fulfill the responsibilities that were previously performed by the TPFA is not yet updated to reflect the correct process. Effect or potential effect: GDOE is in noncompliance with applicable cash management requirements. Questioned Costs: $841,180 Context: We identified 122 drawdowns during the year totaling $35,101,644. We tested 60 expenditures totaling $1,886,121. The samples were statistically valid. For eight expenditures (or 13%) totaling $698,768, we determined the vendor was not paid on the same day or within 24 hours after funds were received. Additionally, we noted that one sample tested for allowable costs/ cost principles compliance requirements amounting $142,412, wherein, such did not comply with cash management compliance requirements. Identification as a repeat finding, if applicable: 2024-008 Recommendation: GDOE should update its current SOPs to clearly incorporate transitioned roles and responsibilities of the TPFA for accountability to the specific conditions set by the US Department of Education. Furthermore, GDOE should obtain an updated U.S. Department of Education Specific Conditions. View of Responsible Officials: GDOE agrees with the finding, however, does not agree with the criteria and the cause and provides details in its Corrective Action Plan. Conclusion: The FY25 U.S. Department of Education carried forward the FY24 Specific Conditions dated June 24, 2024 which states that “Now that GDOE is managing its Department funds independently without TPFA oversight, GDOE must continue to fulfill the responsibilities that were previously performed by the TPFA.” The criteria and the cause of the finding remains.
Finding No.: 2025-012 – Equipment and Real Property Management Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.403 Consolidated Grants Federal Award No.: S403A230002 Criteria or specific requirement (including statutory, regulatory or other citation): FY2025 U.S. Department of Education Specific Conditions, paragraph (5) states that “GDOE must ensure that all tangible personal property procured under Department grants is managed in accordance with the requirements of 2 CFR 200.313(a) and (c)-(e ) to ensure that such property is properly inventoried, maintained, and stored to prevent loss, damage, or theft of such property”. 2 CFR 200.313(d) states that regardless of whether equipment is acquired in part or its entirety under the Federal award, the recipient must manage equipment (including replacement equipment) utilizing procedures that meet the requirement of having property records that include a description of the property, a serial number or another identification number, the source of funding for the property (including the FAIN), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. Condition: Cost of asset was incorrectly recorded in the property records. Asset # Description Cost per Property Record Cost per Invoice Variance Questioned Cost 103166 MOTOROLA APX 4000 RADIO $3,095 $1,319 $1,776 $3,095 Cause: Responsible personnel did not properly record the cost of the asset in the property records. Effect or potential effect: GDOE is in noncompliance with applicable equipment and real property management requirements. Questioned Costs: $3,095 Context: We identified 801 additions during the year totaling $1,218,759. We tested 40 additions totaling $75,323. The samples were statistically valid. Of 40 additions tested, one addition (or 3%) amounting $3,095 was recorded with incorrect unit cost. Questioned cost is calculated as the value of the asset that was accumulated in the equipment listing and recorded as expenditure in the current fiscal year. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: Responsible personnel should ensure that asset information is accurately captured in the property records. View of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.
Finding No.: 2025-013 – Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.403 Consolidated Grants Federal Award No.: S403A230002, S403A240002 Criteria or specific requirement (including statutory, regulatory or other citation) #1: 2 CFR 200.318(a) states the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in 2 CFR 200.317 through 200.327. Accordingly, documented procedures must ensure consistency to standards in 2 CFR 200.324(a) which articulates that the recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis conducted depend on the facts surrounding the particular procurement transaction. Criteria or specific requirement (including statutory, regulatory or other citation) #2: In accordance with 2 CFR 180.300, entities that enter into covered transactions must verify that the person with whom they intend to do business is not excluded or disqualified by: a) Checking SAM.gov Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person. According to 2 CFR 180.220(b)(1), a procurement transaction is considered a covered transaction if the contract amount is expected to equal or exceed $25,000. Condition #1: There is no cost or price analysis performed related to PO No. 20250970 amounting to $328,465. Condition #2: For the following procurement transactions, GDOE did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into covered transactions: Purchase Order # Purchase Order Amount FY25 Expenditure 20250974 $ 239,975 $ 239,975 20251164 239,970 239,970 20250970 328,465 328,465 20250248 232,496 232,496 20250615 150,546 150,546 20250240 140,365 140,365 20250325 35,948 35,948 20250702 32,208 32,208 20250943 29,792 29,792 20250694 219,068 97,568 20250180 174,676 174,676 20250207 147,525 147,525 20250268 129,439 129,439 20250075 49,610 49,610 20250051 35,140 35,140 20250189 25,650 25,650 20250079 195,413 195,413 $2,406,286 $2,284,786 Cause #1: GDOE lacks internal control over periodic review of procurement policies to ensure all required provisions stated in the Compliance Supplement are covered, specifically, the requirements of 2 CFR 200.324 regarding cost or price analysis. Cause #2: GDOE’s policies and procedures only require a review of excluded parties in SAM.gov for competitive selection procedures covering contracts exceeding $250,000. However, this is only performed for new vendors during the vendor registration or creation process and not on per covered transaction basis. In addition, GDOE’s policies do not specify how the performance of the vendor review should be documented, hence, there was no trail whether such was actually performed. Effect or Potential Effect: GDOE is in noncompliance with the applicable procurement and suspension and debarment compliance requirements. Questioned costs: $2,284,786. The questioned costs relate to the FY25 expenditures of procurement transactions where the required verification before entering into covered transaction was not performed. Per auditors’ verification, the vendors with whom GDOE transacted business with are not suspended or debarred as of September 30, 2025. Context #1: We identified 246 procurement transactions during the year totaling $4,856,571. We tested 42 procurement transactions totaling $2,405,276. The samples were statistically valid. Of 42 procurement transactions tested, one transaction exceeded the simplified acquisition threshold where no cost or price analysis was performed. Context #2: We identified 39 procurement transactions subject to suspension and debarment compliance requirements during the year totaling $4,031,280. We tested 17 procurement transactions totaling $2,284,786. The samples were statistically valid. For all 17 (or 100%) procurement transactions tested, the required verification before entering into covered transaction was not performed. Identification as a repeat finding, if applicable: 2024-009 Recommendation: GDOE should revisit its procurement policies and ensure all required provisions stated in the Compliance Supplement are covered, specifically, the requirements of 2 CFR 200.324 regarding cost or price analysis. GDOE should establish formal policy requiring verification and retaining documentation of procedures performed, to verify that the person in a covered transaction with whom they intend to do business is not excluded or disqualified. View of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.
Finding No.: 2025-016 – Special Tests and Provisions - Wage Rate Requirements Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.425 Education Stabilization Fund 84.425A Education Stabilization Fund – State Educational Agency (Outlying Areas) Federal Award No.: S425A210003 Criteria or specific requirement (including statutory, regulatory or other citation): 29 CFR sections 5.5 and 5.6 requires nonfederal entities to include in their construction contracts subject to the Wage Rate Requirements (the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). Per Davis-Bacon and Related Acts, Davis-Bacon coverage has been found to apply to work such as installing a security system or an intrusion detection system, installing permanent shelving which is attached to a structure, installing air-conditioning ducts, excavating outside cable trenches and laying cable, installing heavy generators, mounting radar antenna, and installing instrumentation grounding systems. Condition: The executed contract between GDOE and a contractor relative to IFB 009-2023 did not include a provision that the contractor or subcontractor comply with the Davis-Bacon Act requirements and the DOL regulations. Further, related certified payrolls were not submitted by the contractor. Cause: GDOE believed the services performed by the vendor is outside the scope of the Davis-Bacon Act, hence, they did not perform procedures relative to the applicable requirement. Effect or Potential Effect: GDOE is in noncompliance with applicable special tests and provisions - wage rate requirements. Questioned Costs: $4,255,458 Context: We identified and tested all nine contracts subject to wage rate compliance requirements during the year, with expenditures totaling $85,166,804. The samples were statistically valid. Of nine contracts, four (or 44%) with total expenditures during the year of $4,255,458, did not include a provision that the contractor or subcontractor comply with the Davis-Bacon Act requirements and the DOL regulations. The four contracts that are noncompliant relate to one contractor. Identification as a repeat finding, if applicable: 2024-012 Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable special tests and provisions - wage rate requirements. View of Responsible Officials: GDOE acknowledges the finding and the related recommendation, however, does not concur with how the questioned costs are determined and provides details in its Corrective Action Plan. Conclusion: Our questioned costs remain. The amount presented as questioned costs above pertain to total expenditures during the year relating to contracts that did not include a provision that the contractor or subcontractor comply with the Davis-Bacon Act requirements and the DOL regulations. As defined in 2 CFR Part 200 Subpart A, “Questioned cost means an amount, expended or received from a Federal award, that in the auditor’s judgment: (i) Is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award; (ii) At the time of the audit, lacked adequate documentation to support compliance; or (iii) Appeared unreasonable and did not reflect the actions a prudent person would take in the circumstances. (2) The questioned cost amount under (1)(ii) is calculated as if the portion of a transaction that lacked adequate documentation were confirmed noncompliant. (6) Questioned costs are not improper payments until reviewed and confirmed to be improper payments as defined in OMB Circular A-123 Appendix C.”
Finding No.: 2025-014 – Equipment and Real Property Management Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.425 Education Stabilization Fund 84.425X American Rescue Plan – Outlying Areas State Educational Agency (ARP-OA-SEA) Federal Award No.: S425X210003 Criteria or specific requirement (including statutory, regulatory or other citation): FY2025 U.S. Department of Education Specific Conditions, paragraph (5) states that “GDOE must ensure that all tangible personal property procured under Department grants is managed in accordance with the requirements of 2 CFR 200.313(a) and (c)-(e ) to ensure that such property is properly inventoried, maintained, and stored to prevent loss, damage, or theft of such property”. 2 CFR 200.313(d) states that regardless of whether equipment is acquired in part or its entirety under the Federal award, the recipient must manage equipment (including replacement equipment) utilizing procedures that meet the requirement of having property records that include a description of the property, a serial number or another identification number, the source of funding for the property (including the FAIN), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. Condition: Cost of asset was incorrectly recorded in the property records. Asset # Description Cost per Property Record Cost per Invoice Variance Questioned Cost 103192 PIONEER 48000BTU A/C SPLIT UNIT $5,268 $4,684 $584 $5,268 Cause: Responsible personnel did not properly record the cost of the asset in the property records. Effect or potential effect: GDOE is in noncompliance with applicable equipment and real property management requirements. Questioned Costs: $5,268 Context: We identified 1,802 additions during the year totaling $4,841,569. We tested 40 additions totaling $86,980. The samples were statistically valid. Of 40 additions tested, one addition (or 3%) amounting $5,268 was recorded with incorrect unit cost. Questioned cost is calculated as the value of the asset that was accumulated in the equipment listing and recorded as expenditure in the current fiscal year. Identification as a repeat finding, if applicable: 2024-010 Recommendation: Responsible personnel should ensure that asset information is accurately captured in the property records. View of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.
Finding No.: 2025-015 – Matching, Level of Effort, Earmarking Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.425 Education Stabilization Fund 84.425X American Rescue Plan – Outlying Areas State Educational Agency (ARP-OA-SEA) Federal Award No.: S425X210003 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance to the ARP-OA SEA Grant Conditions for Part A: Programmatic, Fiscal and Reporting Assurances to ARP-OA SEA Guam Department of Education, the Outlying Area State Educational Agencies (SEAs) must reserve not less than 20 percent of their ARP-OA SEA allocation to carry out, directly or through subgrants or contracts, activities to address the academic impact of lost instructional time by supporting the implementation of evidence-based interventions. As issued in the Frequently Asked Questions for Outlying Areas Education Stabilization Fund and American Rescue Plan Programs for State Educational Agencies & Outlying Areas Education Stabilization Fund Governors Program issued by the U.S. Department of Education dated November 2021, answer A-4 states the following: Use of ARP-OA SEA Funds to Address the Academic Impact of Lost Instructional Time. The SEA will use not less than 20 percent of its ARP-OA SEA allocation to carry out, directly or through subgrants to LEAs or through contracts, activities to address the academic impact of lost instructional time through the implementation of evidence-based interventions, such as summer learning or summer enrichment, extended day, comprehensive afterschool programs, or extended school year programs, and ensure that such interventions respond to students’ social, emotional, mental health, and academic needs and address the disproportionate impact of COVID-19 on underrepresented student subgroups (each major racial and ethnic group, economically disadvantaged students, children with disabilities, English learners, gender, migrant students), students experiencing homelessness, and children and youth in foster care, including by providing additional support to LEAs, as applicable, to fully address such impacts. Condition: GDOE did not meet the 20% minimum spending for the specified purpose (earmarking requirement). GDOE attributed all expenditures recorded under Project Code 85040 (Curriculum and Instruction) in complying with the earmarking requirement. However, Project Code 85040 consists of expenditures related to general curriculum and instruction and expenditures related to activities to support the implementation of evidence-based interventions. GDOE did not specifically identify the expenditures within Project Code 85040 that relates to activities to support the implementation of evidence-based interventions in complying with the earmarking requirement. Cause: GDOE did not provide clear evidence that the non-payroll expenditures for supplies, tools, and materials purchased were aligned with an approved evidence-based intervention, including clear linkage to program objectives, intervention models, or measurable instructional outcomes. Effect or Potential Effect: GDOE is in noncompliance with applicable earmarking requirement. Questioned Costs: Undeterminable Context: We estimated program’s life-to-date expenditures that meet the specified purpose at approximately $8.17 million ($7.87 million in 2025 plus $302 thousand in 2024). This amount is deficient by approximately $49.22 million based on 20% of the grant of approximately $287 million. For fiscal year 2025, we estimated program’s year-to-date expenditures that meet the specified purpose at approximately $7.87 million (or 70%). The estimated ratio of costs that do not meet the specified purpose is approximately 30% (costs that do not meet the specified purpose of $126,194, divided by total cost of transactions tested of $418,267), and the dollar equivalent is approximately $3.40 million (estimated ratio of costs that do not meet the specified purpose of 30% multiplied by program’s year-to-date expenditures of $11,262,759). For fiscal year 2025, we identified 1,442 transactions during the year totaling $11,262,759. We tested 60 transactions totaling $418,367. The samples were statistically valid. For 39 (or 65%) transactions tested, supporting documentation or evidence that the cost meets the specified purpose is not sufficient. Specifically, the following expenditures relate to benefits, supplies or tools that assist teachers and instructional support staff with daily classroom instructions and library services: Item # PO/ Other Reference Description Expense Amount Questioned Cost 1 20240811 SUPPLIES $ 3,017 $ 3,017 2 20240926 SUPPLIES 168 168 3 20240927 SUPPLIES 248 248 4 20241309 EQUIPMENT/SUPPLIES 42,730 42,730 5 20240801 LIB EQPT BULK 516 516 6 20241976 BOOKS 3,712 3,712 7 20240711 METAL SHELVES 3,600 3,600 8 20241769 BOOKS 3,683 3,683 9 20240406 SUPPLIES 47 47 10 20240523 SUPPLIES 124 124 11 20241219 LIBRARY FURNITURE 14,086 14,086 12 20240686 SUPPLIES 220 220 13 20240226 SUPPLIES 513 513 14 20241455 LIBRARY FURNITURE 19,946 19,946 15 20241456 SUPPLIES 32 32 16 20241121 SUPPLIES 800 800 17 20240859 SUPPLIES 7,829 7,829 18 20240929 SUPPLIES 21 21 19 20240895 SUPPLIES 1,259 1,259 20 20240370 SUPPLIES 335 335 21 20240370 SUPPLIES 19 19 22 20241281 BOOKS 888 888 23 20240943 SUPPLIES 600 600 24 20241460 SUPPLIES 54 54 25 20241993 BOOKS 1,964 1,964 26 20241995 BOOKS 2,254 2,254 27 20242045 SUPPLIES 1,118 1,118 28 20241629 SUPPLIES 157 157 29 20241974 EBOOK 35 35 30 20241620 SUPPLIES 2,279 2,279 Item # PO/ Other Reference Description Expense Amount Questioned Cost 31 20241755 SUPPLIES 2,384 2,384 32 20241129 SUPPLIES 164 164 33 20240285 SUPPLIES 6,890 6,890 34 20241237 SUPPLIES 356 356 35 20241766 BOOKS 1,167 1,167 36 20240608 SUPPLIES 1,180 1,180 37 20240610 SUPPLIES 875 875 38 20241940 SUPPLIES 258 258 39 20241229 SUPPLIES 666 666 $126,194 $126,194 For fiscal year 2024, we estimated program’s year-to-date expenditures that meet the specified purpose at approximately $302 thousand (or 0.52%). Identification as a repeat finding, if applicable: 2024-011 Recommendation: Responsible personnel should verify that expenditures used in earmarking calculations meet the activities stated in the criteria. Furthermore, sufficient supporting documentation or evidence should be maintained to support that costs meet the specified purpose. Views of Responsible Officials: GDOE disagrees with the finding and provides details in its Corrective Action Plan. Conclusion: There is no sufficient supporting documentation or evidence that costs meet the specified purpose stated in the criteria. The finding remains.