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.