The CNMI government has asked the U.S. Department of Education for a waiver on the maintenance-of-effort requirement but the application was found lacking in sufficiency and deemed “totally inconsistent” with federal standards.
Delegate Gregorio Kilili C. Sablan (Ind-MP) disclosed this to members of the Board of Education and Public School System officials during yesterday's board meeting.
Sablan revealed that because of this finding, the USDOE has asked the CNMI government to provide more data that are deemed acceptable to the MOE calculation.
The maintenance-of-effort rule requires PSS to receive a specific share in the overall budget of the CNMI government as a condition to receiving a federal grant.
The USDOE awarded the CNMI $44 million in 2009 under the state fiscal stabilization fund. Of this amount, the bulk of $32.4 million was given to PSS, with a maintenance-of-effort requirement in place. At that time, it the CNMI government was required to match each grant dollar with 40 cents. This calculation was later changed by USDOE, using instead the percentage point, which is 25 percent of the overall government budget.
Sablan disclosed that the CNMI filed the waiver application in August this year. The application, he added, was only made available by the CNMI government to the USDOE.
“Our government submitted the MOE waiver in August. You haven't seen the application, I haven't seen the application. We learned, however, that the application is under review. There are issues that the application lacks sufficiency, issues of revenue calculations and methodology used. This is why USDOE has requested data deemed acceptable to the MOE calculation.because it appears the NMI application included inconsistencies with prior years' funding submissions. That in itself, is a violation of the MOE,” Sablan told the BOE.
Sablan disclosed that the CNMI government, pursuant to the USDOE request, is preparing two new submissions to the federal agency: 1.) The government calculation of MOE using the old formula; and 2.) Calculation of MOE using the new methodology used by the CNMI.
$7M still owed to PSS
PSS federal programs officer Tim Thornburgh and financial consultant Ed Tenorio disclosed yesterday that PSS is still owed by the central government a little over $7 million for the unmet maintenance-of-effort in fiscal years 2010 and 2011.
The original amount, they said, was $11 million but in the latter part of last school year, the central government remitted some $2.6 million for personnel salary.
According to Sablan, no other state and territory has failed to meet the MOE requirement thus far. Although states may have several issues with the calculation, no one has failed to meet the requirement.
The CNMI, he said, is faced with serious trouble if USDOE decides to require the CNMI to return the $44 million that was previously awarded. He said this may negatively impact all federal grants to the CNMI.
As process, Sablan said, USDOE may hold off releasing other federal monies until such time that the CNMI returns in full the $44 million SFSF.
If and when a decision is to be made, Sablan said, it will be up to the USDOE.
Letter to Duncan
Yesterday, Sablan sent a letter to USDOE Secretary Arne Duncan, seeking a status update on the MOE waiver application submitted by the CNMI for fiscal year 2010.
“The Department of Education's Office of Legislative and Congressional Affairs has previously informed me that the department's SFSF Implementation and Support Unit has received the CNMI waiver application, but that there are issues with the supporting documentation and with the calculation methodology the CNMI proposes to use. This application is not available for public inspection. The CNMI-PSS, which is the primary beneficiary of the MOE requirement, has reviewed relevant financial information that is public record and concluded that the CNMI has not met its local funding obligation under the terms of SFSF grant,” stated Sablan in his letter to Duncan dated Oct. 24.
Sablan, in the same letter, indicated that his concern is that “if local funding has not been maintained in accordance with the requirements of the original SFSF grant, then students and educators in the CNMI may have been shortchanged for a number of school years.”
“I respectfully request that the USDOE make the SFSF MOE waiver application for [fiscal year] 2010, submitted by the CNMI, available for inspection and that the department resolve this matter in a timely fashion, providing full and fair consideration, consistent with all applicable laws, rules, and regulations,” stated Sablan, adding that if CNMI students are entitled to a greater level of financial support under the terms of an agreement between the CNMI and the federal government, then the USDOE must ensure that support is quickly forthcoming.