Finding No.: 2024-011 Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425X American Rescue Plan – Outlying Areas State Educational Agency (ARP-OA-SEA) Federal Award No.: S425X210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $825,567 Criteria: 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. Finding No.: 2024-011, continued Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425X American Rescue Plan – Outlying Areas State Educational Agency (ARP-OA-SEA) Federal Award No.: S425X210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $825,567 Criteria, continued: C-2. How may an Outlying Area use ESF-SEA, ESF-Governor, and ARP-OA SEA funds to support students who have lost instructional time due to the COVID-19 pandemic? states the following: ESF-SEA, ESF-Governor, and ARP-OA SEA funds may be used to provide a variety of activities and supports to help improve the achievement of students to address the impact of lost instructional time due to the COVID-19 pandemic. For example, funds may be used for costs associated with evidence-based approaches to accelerating learning, high-dose tutoring, leveraging technology to provide embedded assessment and differentiated instruction, diagnostic and curriculum-embedded assessments, and extending the school day or year to provide additional time for student learning, enrichment, and support. These costs may include supplementing the salaries of educators and other qualified personnel to perform additional services. ESF-SEA, ESF-Governor, and ARP-OA SEA funds may be used to support the costs associated with hiring additional teachers and teacher aides to provide intensive support to students. These funds may further be used to provide professional development to educators on research-based strategies for meeting students’ academic, social, emotional, mental health, and college, career, and future readiness needs, including strategies to accelerate learning without remediation or tracking. Conditions: 1. For thirty-eight (or 95%) of forty items, aggregating $829,862 of $55,435,193 in total expenditures used in earmarking calculation, deficiencies were noted, as follows: Item # PO/ Other Reference Description Expense Amount Questioned Cost 1 ARP PP23 REGULAR SALARIES $ 10,884 $ 10,884 2 ARP PP23 REGULAR SALARIES 5,457 5,457 3 ARP PP23 BENEFITS 9,034 9,034 4 ARP PP23 REGULAR SALARIES 48,336 48,336 5 ARP PP22 BENEFITS 50,687 50,687 Finding No.: 2024-011, continued Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425X American Rescue Plan – Outlying Areas State Educational Agency (ARP-OA-SEA) Federal Award No.: S425X210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $825,567 Conditions, continued: Item # PO/ Other Reference Description Expense Amount Questioned Cost 6 ARP PP21 BENEFITS 29,593 29,593 7 ARP PP21 REGULAR SALARIES 95,785 95,785 8 ARP PP19 REGULAR SALARIES 12,955 12,955 9 ARP PP17 REGULAR SALARIES 70,074 70,074 10 ARP PP17 BENEFITS 1,152 1,152 11 ARP PP16 BENEFITS 1,226 1,226 12 ARP PP16 BENEFITS 56,740 56,740 13 ARP PP16 BENEFITS 1,132 1,132 14 ARP PP16 BENEFITS 9,973 9,973 15 ARP PP16 BENEFITS 12,100 12,100 16 ARP PP15 REGULAR SALARIES 1,794 1,794 17 ARP PP15 REGULAR SALARIES 103,677 103,677 18 ARP PP15 REGULAR SALARIES 61,981 61,981 19 ARP PP14 REGULAR SALARIES 135,654 135,654 20 ARP PP14 REGULAR SALARIES 3,209 3,209 21 ARP PP13 BENEFITS 1,262 1,262 22 ARP PP13 BENEFITS 15,804 15,804 23 ARP PP13 REGULAR SALARIES 70,081 70,081 24 ARP PP13 PART-TIME 219 219 25 SPC BENEFITS 429 429 26 20240437 INSTRUCTIONAL 2,180 2,180 27 20241145 INSTRUCTIONAL 20 20 28 20240997 LIBRARY MATERIALS 940 940 29 20241458 INSTRUCTIONAL 6,481 6,481 30 20241425 LIBRARY MATERIALS 98 98 31 20241428 LIBRARY MATERIALS 72 72 32 20240756 INSTRUCTIONAL 226 226 33 20240824 INSTRUCTIONAL 2,894 2,894 34 20232899 ADMIN OFFICE SUPPLIES 64 64 35 20231916 SUPPLIES 44 44 36 20240723 INSTRUCTIONAL 130 130 37 20240410 INSTRUCTIONAL 2,564 2,564 38 20240377 INSTRUCTIONAL 616 616 $825,567 $825,567 Finding No.: 2024-011, continued Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425X American Rescue Plan – Outlying Areas State Educational Agency (ARP-OA-SEA) Federal Award No.: S425X210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $825,567 Conditions, continued: Item #s 1 through 24 relate to the $51 million instructor’s payroll expenses who have undergone training to implement accelerated learning in the classroom. There is no sufficient supporting documentation or evidence that the cost meets the activities stated in the criteria. Item #s 25 through 38 relate to benefit, supplies or tools that assist teachers and instructional support staff with daily classroom instructions and library services. There is no sufficient supporting documentation or evidence that the cost meets the activities stated in the criteria. 2. GDOE did not meet the minimum 20% earmarking requirement of $57,388,125, after considering the effect of the condition #1 above. Cause: GDOE incorrectly concluded that the regular salaries and wages of teachers that underwent training to implement accelerated learning in classrooms during regular hours as evidenced-based interventions to address the lost instructional time. Additionally, 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: GDOE is in noncompliance with applicable earmarking requirement. The reportable questioned cost is $825,567 based on the transactions examined in verifying the costs attributed to the earmarking requirement. At the error rate identified of 99.5% (known questioned cost divided by total cost of samples tested), we project that total qualified expenditures incurred by GDOE that meet the earmarking requirement is approximately $302 thousand which is deficient by approximately $57.09 million based on 20% of the grant of approximately $287 million. Finding No.: 2024-011, continued Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund ED Subprogram: 84.425X American Rescue Plan – Outlying Areas State Educational Agency (ARP-OA-SEA) Federal Award No.: S425X210003 Area: Matching, Level of Effort, Earmarking Questioned Costs: $825,567 Recommendation: Responsible personnel should verify that expenditures used in earmarking calculation meet the activities stated in the criteria. Furthermore, sufficient supporting documentation or evidence should be maintained to support that costs meet the activities stated in the criteria.