GACS faces potential lawsuit over non-payment; GDOE says amount exceeded cap

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Guahan Academy Charter School (PNC file photo)

GDOE says an amount of $332,825 submitted by GACS for the Rex International contract “exceeded the legislative approved funding.”

Guam – A contractor for Guahan Academy Charter School says it may take legal action against the charter school for non-payment, adding to the school’s piling financial concerns.

Guahan Academy Charter School is in danger of a potential lawsuit over its failure to pay its contractor, Rex International Inc. In a letter Rex General Mananger Edward Kim sent to Guam Academy Charter School Council Chairwoman Amanda Blas dated November 28, Kim requests for the council’s assistance in the matter.

“To date, Rex, as well as most of the other contractors and suppliers, have not received even close to half of all the outstanding invoices to cover the materials, time, labor and equipment already provided, causing extreme economic hardship,” Kim tells Blas, adding, “any calls, letters or emails have only been met with a response telling us to wait.”

But Rex International cannot wait any longer as they too have an obligation to their subcontractors and suppliers who, according to Kim, “have even threatened legal action and engaging a collections agency.”

The situation is so dire that at least one supplier, says Kim, “has been barely staving off foreclosure and bankruptcy for months now due to non-payment.”

Rex International signed a contract with GACS back in May to build 50 classrooms within the existing steel warehouse with framing to be provided by a third-party supplier.

Construction of the classrooms went on as scheduled, however, in July, GACS requested for the immediate construction of classrooms to accommodate more than 300 students in time for the new school year.

But as the bills continue to pile up, Rex International says legal action may be its only recourse.

“Our only option now would be to take legal action, but that is something we really do not wish to pursue as final recourse. Therefore, we humbly request the Guam Academy Charter School Council’s advice on how we may resolve this quagmire before damages are irreparable.”

Chairwoman Blas declined to comment on the matter, pending the next work session in which she says this particular matter will be addressed.

Meanwhile, Guam Department of Education Superintendent Jon Fernandez is responding to reports that the funds to pay Rex International are tied up in a verification process at GDOE.

GDOE has the authority to verify charter school invoices which is apparently what happened with the Rex International invoice submitted by Guahan Academy Charter School.

In a statement from GDOE’s Internal Audit Office, the department said GACS submitted a request of about $332,825 for Rex Inc’s invoice near the close of last fiscal year. However, the IAO notes that this amount “exceeded the legislative approved funding and the IAO will not validate over the cap authorized by law.”

According to the Internal Audit Office, for fiscal year 2017, of the $4.81 million appropriated to GACS, $4.76 million was validated, which is a difference of about $500,000. While the Department of Administration released the funds to GACS for its appropriations, GDOE is the advisory arm. I

“We are not a party to any contract between GACS and Rex International, nor do we have access to any funding set aside by DOA for charter schools. However, we will monitor the situation and continue to review the requests being sent to us by the charters as required by the appropriations act,” Fernandez said in a statement.