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.