ONPA Releases Audit Report on FSM Department of Education Supplemental Education Grant
Palikir, Pohnpei (Office of the National Public Auditor): October 3, 2010 - The Office of the National Public Auditor announces the release of report No. 2010-10, Audit of FSM Department of Education Supplemental Education Grant (SEG). The report is available for public review online at the Auditor's website at www.fsmopa.fm and copies are also available at the Auditor's offices in Palikir, Pohnpei and on Weno, Chuuk. The audit was conducted in accordance with Generally Accepted Government Auditing Standards (GAGAS) issued by the Comptroller General of the United States.
The audit was conducted at the request of the Chairman, Committee on Ways and Means of the FSM Congress who asked the Public Auditor to verify that SEG grant funds had been expended in accordance with the requirements. As such, the main objective of the audit was to determine if the funds were expended in accordance with the Integrated Plan and the Grant Award Notification.
Based on the audit findings by the audit team, a review of SEG travel expenditure documents identified eleven trips totaling $41,395.61 that were funded using the SEG grant, but were not authorized in the Integrated Plan's Supplemental Education Grant Budget. In addition, SEG funds were also used to pay for two trips for programs that did not have travel funds authorized per the Integrated Plan's Supplemental Education Grant fund. As a result, National Department of Education (NDOE) has over obligated its available SEG travel budget by approximately $51,942 and, it is unclear as to how NDOE will finance the trips not yet taken, but specified in the Integrated Plan.
Additionally, the audit team found that NDOE used the SEG funds to hire individuals for positions that were not included in the Integrated Plan. An Administrative Clerk in the main office and an Executive Secretary were both hired and paid using SEG funds designated for other positions. The audit team also found that the salary for the Program Manager for the Early Childhood & Elementary Education Program was not authorized by the SEG grant but by the Education Sector Grant. During the 18-month grant period, the Clerk will be paid approximately $9,200, the Executive Secretary will be paid approximately $14,400, and the program manager will be paid approximately $21,300 from the SEG grant. Use of SEG funds to pay for positions not authorized for SEG funds resulted in the shortage of funds to pay for authorized positions.
Furthermore, the audit revealed that there is no system in place to track Other Consumable Expenditure (OCE) by program. While OCE funds were used for items that are correctly classified as OCE, the usage of items purchased by program(s) was/were not recorded. For example, $1,000 of OCE funds was used to purchase twenty five $20 and fifty $10 Telecards. There is no documentation as to whom the cards were distributed, or the program. Similarly, purchase of many items such as ink cartridges and paper are most likely used by the entire department and not just those programs funded by the SEG grant. At least $27,838 of SEG funds were spent on general operating expenses that benefitted NDOE as a whole rather than the specific programs included in the Integrated Plan.
As a result, the audit team concluded that NDOE did not fully comply with the Integrated Plan pertaining to SEG. While most expenditure was made in accordance with the Integrated Plan, in some instances NDOE deviated without permission from the Grant Manager.
The audit report included several recommendations to address the aforementioned problems. The Secretary for NDOE should recognize that the Integrated Plan is a contract between the grantor and the grantee and should ensure that it is done in accordance with the approved Integrated Plan, or obtain written approval from the Grant Manager to deviate from the Integrated Plan. In regards to approved travels that are authorized for SEG funding as specified in the Integrated Plan, if deviations are also necessary, then written approval must be obtained from the Grant Manager. The Grant Manager's review of the notifications of grant award prior to execution should ensure terms and conditions are clear. In the event that the grant terms and conditions are not consistent with all intents and purposes following execution, then the Secretary should contact the grant manager to determine if an amendment should be processed and executed.
For further information on this release, please contact:
FSM Office of the President Public Information: Press, Radio, Video P.O Box 34 Palikir Station, Pohnpei, FM 96941 Tel.: (691) 320-2548/2092 Fax.: (691) 320-4356 e-mail: firstname.lastname@example.org http://www.fsmpio.fm/