Feb. 8, 2004 – Although figures released by the U. S. Department of Education in January indicate the territory is not using federal education funds wisely, Education Commissioner Noreen Michael said Friday the figures are "no cause for alarm."
On a per-student basis last year, the Virgin Islands had to send back to Washington more unused federal education grant money than any state or territory in the nation. And as of Jan. 6, the territory also had the highest percentage of federal school funds allocated but not yet used from 2000, 2001 and 2002 — five times the national average, according to data released this month by the U.S. Department of Education. (See "V. I. leads in losing, failing to use school funds".)
Speaking before the Board of Education, Michael said the figures are misleading. She confirmed that a federal report – "Unexpended obligations by recipient: federal fiscal years 2000-2002" – showed the V. I. as not having spent 41 percent of the federal funds, with $19 million being returned.
However, Michael said, on closer inspection, "it became apparent that one particular grant award was largely the reason for the overall high percentage of unexpended federal funds." For example, she said, a $15 million grant the department was suppose to have spent by Sept. 30, 2003 was spent, except for less than $14,000 "which lapsed."
Michael said the federal grants are sometimes as much as a year late arriving in the hands of the department. This particular grant did not arrive until Oct. 19, 2002, "leaving the V.I. less than one year to obligate the funds," she said.
She explained the percentages the federal figures reflect are "a yardstick – the percentage is there whether we spend the money or not." The actual percentages are closer to 25 percent, than the reported 41 percent, she said.
Going back to the initial grant at issue, the Planning Grant FFY 2001 grant funds, she said, "it's important to point out that activities described under Program Planning, Design and Evaluation in the Comprehensive School-wide plans are 100 percent supported through this grant, along with the department's accountability system project.
"The board, and indeed the public, have no cause for alarm by the large percentage of unexpended funds associated with this grant." That is because both of the major projects under this grant have until 2006 to close out, she said.
Michael said that she had gone to Washington, D.C. to plead for one particular $15 million grant which had lapsed. After explaining that the funds were to needed to help with the compliance agreement in the No Child Left Behind Act mandate, the federal Department of Education agreed to return the funds, which will not expire until 2006, Michael said.
Michael also said her department is "working aggressively to meet the requirements of the compliance agreement relative to the timely expenditure of federal funds to ensure that funds no longer lapse." (See "Progress reported in Educations's compliance".)

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