ONPA RELEASES CHUUK SPECIAL EDUCATION PROGRAM FUNDS AUDIT

Palikir, Pohnpei FSM - The Office of the National Public Auditor announces the release of report No. 2009-03 Audit of Chuuk State Special Education Program Funds. The report is available for public review online at the Auditor's website www.fsmopa.fm and copies are available at the Auditor's offices in Palikir and Weno.

The audit was performed with the objectives of determining whether the Chuuk State Special Education Program Office (SEPO) complied with terms and conditions of a grant provided by the U.S. Department of Education and whether the Program complied with FSM financial laws and regulations.  Records from Fiscal Years 2006, 2007 and through March 31, 2008 were reviewed.  The audit was conducted in accordance with Generally Accepted Government Auditing Standards issued by the Comptroller General of the United States .

The audit found that SEPO had not complied with requirements regarding teacher qualifications.  Though both FSM law and the grant require that teachers be certified or at least have an associate degree, 75% of all special education teachers did not have a degree and only 20% of those without a degree are currently enrolled in a degree program. Additionally, though special education program requires that children receive an Individual Education Plan (IEP), the audit found IEPs for only approximately half of the cases reviewed. Moreover, though the SEP grant funding is supposed to be used in addition to local funding for children with special needs, the audit found that the National Special Education Office (NSEPO) could not demonstrate that it provided its required allotment of funding to children with special needs.

Additionally, the audit revealed missing/unaccounted fixed assets and mischarged expenses. Specifically, the Chuuk Department of Education, which administers SEP, could not locate two laptops, four desk top computers, an air conditioner, and other office equipment and the Department failed to document that two boat engines had been installed on boats owned by Department employees, which was the arrangement for buying engines only without boat. Additionally, SEP funds were used to pay at least $24,000 in travel expenses so that non-SEP employees could travel to off-island conferences and for the payment of the housing allowance for a non-SEP employee.

Moreover, the Department did not adequately document the distribution of school supplies and therefore the auditors could not determine whether the supplies were delivered to serve the needs of children with disabilities. A review of five vouchers totaling $45,107 revealed that there was no documentation to show who received the supplies. The Department also prepaid a gas station for the purchase of gasoline and failed to keep records to document whether all the fuel was eventually withdrawn from the gas station or whether the gasoline was used for purposes related to SEP.

Lastly, the audit revealed that three Department employees appeared to violate regulations intended to prevent conflicts-of-interest from occurring. The employees did not reveal the conflict when they were involved in the purchasing of goods on behalf of the SEP program. A SEP employee and a Department official prepared to purchase $160,016 worth of supplies from an off-island supplier that was represented by an individual related to both the employee and the official. In this instance, the proposed purchases were cancelled by the former Chuuk Special Education Coordinator because of a lack of information about the supplier and because the individuals involved in the purchase had not followed bidding requirements. In a separate instance, a Department official who facilitates the procurement for all education divisions and programs also owns a business which received $30,452 worth of purchase orders from the SEP program, though it should be noted that in this instance competitive bids were obtained prior to awarding these purchase orders.

To address the findings related to the lack of qualified teachers, the ONPA recommended that the Chuuk State Public Service Commission ensures that vacant positions are announced, that a list of eligible candidates be maintained for future hiring, and that qualified teachers be paid more than unqualified teachers so that unqualified teachers have an incentive to earn their certification. Additionally, the ONPA recommended that the Chuuk DOE actively monitor progress and take action to ensure all unqualified teachers work towards their certification. It was also recommended that the National SEP program monitor progress and provide oversight.

The report also provided specific recommendations to the Chuuk Department of Administrative Services (DAS), the FSM Finance Field Office, the Chuuk SEPO, and the National SEPO regarding the need for policies, procedures, and other controls regarding the inventory, distribution, and procurement issues identified above. The DAS agreed with all findings and recommendations. The NSEPO agreed with all findings and recommendations with the exception of issues regarding the accounting for funds dedicated to SEP children. The Chuuk Department of Education did not provide a response to the report.