EFSC Warns Guam DOE Has Exceeded Its FY ’11 Budget

199

Guam – The Education Financial Supervisory Commission [EFSC] has issued what they’re calling a “CODE B – Warning” to Guam DOE
for the month of December which they say means that Guam DOE exceeded its budget for that month by more than 10%.

Excessive overtime is blamed.

Their “CODE B-Warning” requires the Superintendent to submit an explanation of the variance within 5 working days.

In addition,  the EFSC also issued a “CODE C – Watch” which they say means Guam DOE is running  2%  beyond its budget for Fiscal Year 2011.  Again overtime as well as benifits are blamed.

This “CODE C – Watch” requires the Superintendent to submit a Corrective Financial Recovery Plan to eliminate Watch conditions within 20 working days.

The Warning and Watch were issued following the EFSC’s meeting this past Monday.

Read the letter from EFSC to GDOE Board Chairman Ayuyu

Read the Release from the EFSC below:

Education Financial Supervisory Commission (EFSC) News Release

EFSC ISSUES FINANCIAL STATUS DESIGNATION CODE

FOR GDOE FINANCES AS OF DECEMBER, 31 2010

FOR IMMEDIATE NEWS RELEASE (February 01, 2011 – Hagåtña) –The Education Financial Supervisory Commission (EFSC) met on January 31, 2011 to assign a Financial Designation Status to the Guam Department of Education (GDOE).  EFSC members unanimously assigned the following codes after review of the variances between the department’s actual expenditures against their monthly and annual budget plan, submitted as required by P.L. 30-164, for the month ending December 2010.

Fiscal Year-to-Date:  10/1/2010 to 12/31/2010

The Education Financial Supervisory Commission pursuant to Article 1, Chapter 3, §3133(c)(6) of Title 17, Guam Code Annotated issued a CODE C – Watch indicating that the Guam Department of Education (GDOE) has a negative variance report exceeding two percent (2%) of the approved budget amount when combining year-to-date actual and annualized projections at the time of reporting for budgetary object categories:   

112 Overtime

113 Benefits.

Month of December 2010

The Education Financial Supervisory Commission pursuant to Article 1, Chapter 3, §3133(c)(6) of Title 17, Guam Code Annotated issued a CODE B – Warning indicating that the GDOE has a negative variance report exceeding ten percent (10%) of the year-to-date budgeted amount in an expense category or five percent (5%) in aggregate at the time of reporting for budgetary object categories:

112 Overtime

P.L. 30-164 created the EFSC to provide financial oversight over the Guam Department of Education’s finances. Among the EFSC’s responsibilities is to assign a financial status designation for the Guam Department of Education; providing an indication of the financial condition of the Guam Department of Education for Taxpayers, the Guam Education Board (GEB), the Governor and the Legislature. The designation is based on review of expenditure reports submitted by the Guam Department of Education to the commission, which meets monthly.  

The description of the financial status designations are as follow:

* CODE A means Stable, indicating that the GDOE has positive variance reports in all budgeted expense categories at the time of reporting;
* CODE B means Warning, indicating that the GDOE has a negative variance report exceeding ten percent (10%) of the year-to-date budgeted amount in an expense category or five percent (5%) in aggregate at the time of reporting;
* CODE C means Watch, indicating that the GDOE has a negative variance report exceeding two percent (2%) of the approved budget amount when combining year-to-date actual and annualized projections at the time of reporting; and
* CODE RED indicates Emergency, whereby there is a failure to implement a corrective Financial Recovery Plan within fifteen (15) working days of submission to EFSC or failure to submit a Financial Recovery Plan.

The January 2011 designation requires the Guam Department of Education and Guam Education Board to take the following corrective actions, also outlined in P.L. 30-164:  

Required Action

CODE C – Watch. The Superintendent of Education, in conjunction with the Deputy Superintendent of Finance, shall submit a Corrective Financial Recovery Plan to eliminate Watch conditions within twenty (20) working days of an EFSC-issued Watch to the GEB. The GEB shall review, modify and approve by resolution the corrective Financial Recovery Plan and submit it to the EFSC within fifteen (15) working days of receipt from the Superintendent of Education.

CODE B – Warning. The Superintendent of Education, in conjunction with the Deputy Superintendent of Finance, shall submit an explanation of variance within five (5) working days of an EFSC Warning to the GEB and EFSC that explains each expenditure category above the approved budget amount as outlined in the Fiscal Year 2011 twelve (12)-month Expenditure Operations Plan.

Voting members of the EFSC include the Director of the Bureau of Budget Management & Research, Director of the Office of Finance and Budget, Public Auditor of Guam, Director of the Department of Administration and a parent of a child currently enrolled in a public school, appointed by the Chairperson of the Committee on Education of  I Liheslaturan Guahan, with at least five (5) years experience in the public or private sector in the management of business or financial expertise, public accounting, or similar professional activity.