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Education Commissioner: Cutoff of Federal Funds Is 'Unfair'

July 17, 2005 — V.I. Education officials and the head of the Office of Management and Budget said Saturday that it wasn't entirely their fault that federal funding had been cut off until Compliance Agreement measures were fully implemented.
"The U.S. Department of Education believes that we have lapses in funds…that we don't spend the money they give us by the time its supposed to be spent," said Noreen Michaels, education commissioner. "But there are many instances where their grants were awarded late … we got the certificate of award sometimes four days before its expiration date. Once, we were even awarded a grant on the same day that the funds needed to be expended."
Michaels, who tried to explain the department's status to the Board of Education, also added that on the subject of setting up a third-party fiduciary system, she didn't know what to do.
"There is no other such system set up in any of the other U.S. governances, so there is no basis for us to go on. We've written to the USDOE to provide information on how to set up a third-party fiduciary, but we have not received any information as yet," Michaels said.
Lack of response on this matter hasn't kept the USDOE from sending other kinds of correspondence: a recent letter sent by U.S. Undersecretary of Education Edward McPherson said that all federal funds to V.I. Department of Education were to be cut off until the fiduciary is in place.
"This is unfair…if you give us a deadline, at least wait until the deadline has passed and then take action," Michaels said.
The third-party fiduciary, an outside individual managing the department's affairs on behalf of the USDOE, is supposed to be in place by September 30, the end of the Compliance Agreement.
But so far, the Compliance Agreement Task Force—put in place during 2002 to make sure agreement conditions are met–is only in the process of putting out a request for proposals from parties interested in providing service.
"We've been working on formulating a request for proposal …and by next week, those should hit the streets," said OMB Director Ira Mills.
Board members were not satisfied with this answer—disappointed that this has been the only progress made, Mills was asked why the project was taking so long.
"You've had three years," member Keith E. Richards said. "Why are you only sending out proposals now?"
Mills responded by expressing frustration in the creation a new financial management system—also a condition of the agreement—which has taken longer than expected.
"There are things that could have been done differently," Mills said. "When the system was first mentioned, we tried to secure a project manager to help with the undertaking…we were hoping that UVI would be able to help us with that…but people got bogged down, and eventually we had to throw the idea out."
Mills added that the Compliance Task Force then entered into negotiations with the USDOE over a new proposal, which was accompanied by a plan clearly outlining what the team intended to do.
"They asked us for a credible financial management system, and we presented them with what we had in mind" Mills said. "At first they said that it was acceptable…then, after we had begun work, they said that they wanted a more independent system, and we had to start over," Mills said.
Mills said that the third-party fiduciary was then suggested, and that the task force had been doing the best they could to get things going on the matter.
"We hope to have something in place by the September deadline," Mills said.
Mills added that the fiduciary system should be replaced in October by a new Enterprise Resource Planning System implemented to manage the prompt recording of federal grants, among other things (See "Senate Looks At Education Department's Compliance Agreement".)
"But if the system is not up, there is no federal money," Mills said.
Michaels, in order to assure the board that she was trying to spend all leftover federal money as quickly as possible, reported that the department had obligated about 57 percent of the grant money— with almost $21.1 still pending.
When further asked how many individuals under the Education Department (other than students) would be impacted by the suspension of money, Michaels said that 430 staff salaries were funded federally.
"There are 244 school-based positions and 75 non-school-based positions that are fully funded by federal money, and 25 positions that are partially funded by federal money," Michaels said.
Michaels promised the board that continuous efforts will be made to use the remaining money so that it is not lost.
Board of Education Chair Judy Gomez additionally provided information on the status of teacher certification—a final condition of the compliance agreement.
"We're supposed to have 280 teachers certified each year, in order to provide maximum teacher proficiency in the classroom," Gomez said. "I know that we've all been working hard, but the time has come for us to buckle down and really get this done."
For 2005, the third year of the Compliance Agreement, the board has only certified 67 teachers.
Keith E. Richards, also head of the board's certification committee, added that ten more individuals have recently been certified, but many veteran teachers—those who have been working for ten years or more—still need to be certified.
"It was discovered that the requirement for student teaching for some of these individuals had been waived," Richards said. "We're working on getting them certified now."
Attorney Nandi Sekou additionally asked Michaels for an update on summer maintenance projects for territory schools—information which Michaels has been reluctant to supply in previous meetings.
"We're developing Excel spreadsheets to be completed by both districts on work that needs to be done," Michaels said, adding that internal projects were being completed by maintenance staff. "However, there are always funding issues," Michaels said.
The commissioner reminded the board that Sen. Liston Davis, a former Board member, had asked that Michaels not be harassed on the topic. "Our schools are always ready to be open at the beginning of the school year," Michaels said.
Michaels added that the department had adopted a paradigm of having maintenance done on schools all year round.
"An appropriation made into the budget for fiscal year 2006 has been approved by the Senate…this gives us $900,000 dollars for maintenance, so that $1.8 million dollars of our budget is for maintenance," Michaels said.
When asked about the status of capital projects being performed, Michaels admitted that the department wasn't as far along as she had hoped, but that they were "moving expeditiously to get things done." This includes the rebuilding of classrooms recently damaged in a fire at Addelita Cancryn Junior High School.
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