PSS taken off high-risk grantee list

The Public School System has been taken off the high-risk grantee status by the U.S. Department of Education.

In an Aug. 11, 2004, letter to Gov. Juan N. Babauta, USDOE deputy secretary Eugene W. Hickok said the high-risk grantee designation, which was issued in Sept. 2003, has been removed due to “significant progress” made by PSS in administering department programs.

The de-listing, according to Hickok, means that the special conditions imposed on PSS in administering its fiscal year 2004 grant awards and other remaining unexpended portion of FY 2003 grants are now lifted.

Likewise, he said that USDOE will no longer restrict PSS to a 50 percent drawdown of its grant awards, as contained in the Sept. 2003 letter.

In deciding to de-list PSS, Hickok said the department “took into account the expeditious manner in which CNMI has submitted complete audits under the Single Audit Act through FY 2003.”

“Beyond the efforts to address the findings related to fiscal accountability of Department funds, CNMI [PSS] has undertaken corrective action for programmatic audit findings and is currently instituting corrective actions,” said Hickok.

Education Commissioner Rita H. Inos said yesterday that she is pleased with the DOE’s decision.

“It’s good news and evidence that PSS has implemented the corrective actions required in the areas of financial audits, fiscal accountability, program performance reports, and administration of program funds,” she said

“It’s a product of hard work and collaboration between PSS and USDOE,” she added, noting that the decision is consistent with the report made by a five-member team from USDOE that visited Saipan earlier this year.

Last year, DOE placed the PSS under high-risk category due to unresolved delays and gaps in PSS’ submission of audit reports.

It said that PSS failed to submit audited financial reports on time under the Single Audit Act for four consecutive years—fiscal years 1997, 1998, 1999 and 2000.

Aside from being late, the audits reportedly did not have appropriate information to meet the requirements of the Act.

The department said that submission of late audits has a substantial negative impact on submitting high quality audits, while the submission of single audits past the statute of limitations undercuts the department’s ability to recover costs that are questionable.