NON-APPROPRIATED FUNDS
SECONDARY SCHOOLS
​SY 2017-2018 AUDIT

Title 17 of the Guam Code Annotated (GCA), Section 3210 and the Guam Education Board (GEB) Policy 715 requires an annual audit of the Guam Department of Education (GDOE)’s Non-Appropriated Funds (NAF). These funds are agency funds, held in trust by GDOE schools. The scope of this engagement is from July 1, 2017 to June 30, 2018 (School Year [SY] 2017-2018). In SY 2017-2018, GDOE had 15 Secondary schools, all of which have NAF accounts. The objectives were to: (1) Determine whether NAF were administered in accordance with Public Law (P.L.) 26-26, Board Policy 715, and schools’ NAF Standard Operating Procedures (SOP); and (2) Identify any internal control weaknesses relative to the safeguarding of NAF.

NAF has been a Single Audit finding for GDOE from fiscal year (FY) 2001 to 2014. Schools with deficiencies in their NAF balances and/or supporting documentations were identified in GDOE's Single Audit Reports. For FY 2015 to 2017, GDOE’s NAF findings were reduced from a significant deficiency to a management letter comment

​In this report, the IAO found a deficiency in unreconciled differences due to weak NAF accounting and unsupported costs due to lack of due diligence and proper transitions between outgoing and incoming NAF personnel. IAO made recommendations for NAF personnel to coordinate with IAO to reconcile differences, to include NAF in employee evaluations, for school treasurers and Principals to be more diligent in ensuring complete documentation, and for NAF personnel to continually attend annual NAF trainings to ensure compliance to Standard Operating Procedures. IAO's findings for SY 2017-2018 will be reflected in GDOE's FY 2018 Single Audit Reports.

NON-APPROPRIATED FUNDS
SECONDARY SCHOOLS
​SY 2017-2018 AUDIT

Title 17 of the Guam Code Annotated (GCA), Section 3210 and the Guam Education Board (GEB) Policy 715 requires an annual audit of the Guam Department of Education (GDOE)’s Non-Appropriated Funds (NAF). These funds are agency funds, held in trust by GDOE schools. The scope of this engagement is from July 1, 2017 to June 30, 2018 (School Year [SY] 2017-2018). In SY 2017-2018, GDOE had 26 elementary schools, 25 of which have NAF accounts. The objectives were to: (1) Determine whether NAF were administered in accordance with Public Law (P.L.) 26-26, Board Policy 715, and schools’ NAF Standard Operating Procedures (SOP); and (2) Identify any internal control weaknesses relative to the safeguarding of NAF.

NAF has been a Single Audit finding for GDOE from fiscal year (FY) 2001 to 2014. Schools with deficiencies in their NAF balances and/or supporting documentations were identified in GDOE's Single Audit Reports. For FY 2015 to 2017, GDOE’s NAF findings were reduced from a significant deficiency to a management letter comment.

In this report, the IAO found a deficiency in unreconciled differences due to weak NAF accounting and unsupported costs due to lack of due diligence and proper transitions between outgoing and incoming NAF personnel. IAO made recommendations for NAF personnel to coordinate with IAO to reconcile differences, to include NAF in employee evaluations, for school treasurers and Principals to be more diligent in ensuring complete documentation, and for NAF personnel to continually attend annual NAF trainings to ensure compliance to Standard Operating Procedures. IAO's findings for SY 2017-2018 will be reflected in GDOE's FY 2018 Single Audit Reports.

IAO REPORT NO. 19-02
​JFKHS INVESTIGATIVE AUDIT
​SY 2018-2019

IAO conducted an investigation on John F. Kennedy School (JFKHS)'s School Year (SY) 18-19 Student Activity Funds (SAF). The objectives were to: (1) Determine if there was misappropriation of NAF; and (2) Identify weaknesses in the administration of NAF, which resulted in missing funds. The scope was JFKHS's December 2018 - January 2019 SAF. The investigation was initiated on January 31, 2019. IAO completed its report on February 26, 2019.

IAO identified several notable conditions in its report. Information contained in this investigative audit is deemed confidential and not for public distribution.

IAO REPORT NO. 18-04
IMS INVESTIGATIVE AUDIT
SY 2016-2018

IAO conducted an investigation on Inarajan Middle School (IMS)'s SY 16-18 Yearbook and Sports Funds. The objectives were to: (1) verify allegations of unauthorized fundraisers relative to school activities; and (2) determine if there was misappropriation of Yearbook and Sports Club Funds. The scope was IMS's SY 16-18 (July 1, 2016 to October 6, 2017) SAF. The investigation was initiated on October 13, 2017. IAO completed its report on May 18, 2018.

IAO identified several notable conditions in its report. Information contained in this investigative audit is deemed confidential and not for public distribution.

IAO REPORT NO. 18-02
OUTSIDE EMPLOYMENT

IAO conducted an investigation on a GDOE employee's alleged dual employment. The objective was to determine if the employee worked outside of GDOE during government hours. The scope was from December 2015 to October 2017. The investigation was initiated on October 3, 2017. IAO completed its report on February 8, 2018.

IAO identified several notable conditions in its report. Information contained in this investigative audit is deemed confidential and not for public distribution.

IAO REPORT NO. 17-05
AIJMS INVESTIGATIVE AUDIT

IAO conducted an investigation on Agueda I. Johnston Middle School (AIJMS)'s SY 16-17 Student Activity Funds (SAF). The objectives were to: (1) identify weaknesses in the administration of NAF; and (2) determine if there was misappropriation. The scope was AIJMS's SY 16-17 (July 1, 2016 to June 30, 2017) SAF. The investigation was initiated on June 1, 2017. IAO completed its report on June 26, 2017.

IAO identified several notable conditions in its report. Information contained in this investigative audit is deemed confidential and not for public distribution.

IAO REPORT NO. 17-04
NON-APPROPRIATED FUNDS
​SY 2015-2016 AUDIT

Guam Education Board (GEB) Policy 715 required for each school to have Non-Appropriated Funds (NAF) Standard Operating Procedures (SOPs) and for IAO to conduct an annual audit of NAF. The scope of this engagement is from July 1, 2015 to June 30, 2016 [SY 2015-2016]. In SY 2015-2016, GDOE had 26 elementary, eight middle, six high, and one alternative schools. Of the 41 schools, Machananao Elementary and JP Torres Alternative Schools did not have NAF accounts. The number of schools with active NAF accounts in Munis was 30 for SAF and 39 for Trust and Agency Funds (TAF). ​

IAO REPORT NO. 16-12
ASSESSMENT OF
​TERMINATION BACK PAY
ISSUE DATE: 01/20/17

IAO conducted an assessment of a GDOE employee's termination back pay. The objective was to assess the validity of GDOE's application of the employee's termination back pay. The scope was from March 2011 to January 2017. The assessment was initiated on October 24, 2016.  IAO completed its report on January 20, 2017. The report was provided to the Superintendent of Education for his disposition.​

IAO REPORT NO. 16-08
OHS ASSESSMENT
SY 2013-2015 SAF CASH CONTROLS

On May 14, 2015, at the Superintendent Jon J.P. Fernandez's request, IAO initiated this assessment after concerns were raised regarding alleged missing funds from Okkodo High School (OHS)'s SAF. The objectives were to determine whether: (1) to determine whether the funds were administered in accordance with Public Law (PL) 26-26, Guam Education Board Policy (BP) 715, and OHS NAF SOPs; and (2) to identify any internal control weaknesses relative to the safeguarding of SAF.

IAO REPORT NO. 16-07
FESTPAC SCHOOL STORES
ISSUE DATE: 12/29/16

This report presents the results of our review of GDOE's Festival of the Pacific Arts (FestPac) School Stores from May 22 to June 4, 2016 (or SY 15 to 16). We initiated this review as part of the annual NAF performance and financial audit in accordance with Title 17 of the Guam Code Annotated, Section 3210, and GEB Policy 715, which requires an annual audit of GDOE's NAF.

The purpose of this review was to examine internal controls and processes that ensure the accuracy and timeliness of FestPac school stores' bank reconciliation were in accordance with NAF procedures, GEB Policy 715, and IAO's Guide to Inputting NAF Transaction into Munis, and Cash Management for FestPac. Overall, GDOE's controls over FestPac school store funds were deemed as moderate.

IAO REPORT NO. 16-06
NON-APPROPRIATED FUNDS 
​SY 2014-2015 AUDIT

GEB Policy 715 required for each school to have NAF SOPs and for IAO to conduct an annual audit of NAF. Of the 41 schools, Machanao elementary and JP Torres alternative schools did not have NAF accounts. The number of schools with active NAF accounts were 31 for SAF and 39 for TAF. The scope of this engagement is from July 1, 2014 to June 30, 2015 (SY 2014-2015). In SY 2014-2015, GDOE had 26 elementary, eight middle, six high, and one alternative school(s). 

NAF has been a Single Audit finding for  GDOE from fiscal year (FY) 2001 to 2014. Schools with deficiencies in their NAF balances and/or supporting documentations were identified in GDOE's Single Audit Reports for FY 2011, 2013, and 2014. The list continued in GDOE's Management Letter for FY 2015, as NAF findings were reduced from a significant deficiency to a management letter comment. 

IAO REPORT NO. 16-05
COLLATERAL EQUIPMENT AUDIT
ISSUED DATE:  06/23/17

Due to the deteriorating conditions of many of the island's public schools and to alleviate overcrowding in schools, Guam's legislature authorized lease/leaseback financing arrangements for seven schools' renovation, expansion, construction, and rehabilitation. As part of these arrangements, collateral equipment were provided by three contractors to seven schools and GDOE Central. Collateral equipment are certain property received through the terms and conditions of the leases to include furniture, computer systems, band equipment, and other items.

The IAO initiated the audit of collateral equipment as part of its 201-2017 Audit Plan and in response to the Office of Public Accountability (OPA) engagement with GDOE in July 2015. For increased efficiency and cost savings, the OPA agreed for IAO to expand their scope of audit services and address concerns related to collateral equipment.

This report presents the results of our audit of GDOE's collateral equipment from May 2005 to November 2014 [or FY 2005 to 2015]. Our audit objectives were to determine whether GDOE (1) had sufficient information to properly receive and account for collateral equipment, as provided in the lease agreements; and (2) properly identified, accounted for, and safeguarded collateral equipment in accordance with lease agreements, and established policies and procedures. To view this report please e-mail your request to the GDOE Superintendent.

IAO REPORT NO. 16-04
OMS CLOSE-UP CLUB ASSESSMENT
ISSUED DATE: 10/12/16

In response to the Superintendent's request, IAO initiated an assessment of Oceanview Middle School (OMS) SY 2014-2015 Close Up club. Management was concerned that OMS requested to send five adults and two students to the National Close Up Foundation Middle School Program. Based on the April 2015 GDOE Off-Island Field Trip Request form, a minimum of one adult, of each gender participating, was required to accompany for every five students. IAO became involved because fundraising activities were stated as the funding source for travel.

IAO REPORT NO. 16-03
JQSMES NAF ACCOUNT
ISSUED DATE: 06/21/16

In response to a citizen concern, the Superintendent approved an investigation of J.Q. San Miguel Elementary School (JQSMES)'s NAF account. The audit team's investigation was limited to disbursements from the school's SAF and TAF in SY 2014-2015. IAO engaged this audit on June 2, 2016, and completed its investigation on June 21, 2016. Information contained in this audit is deemed confidential and not for public distribution.

IAO REPORT NO. 16-02
TRAVEL AUDIT
​ISSUED DATE: 04/14/16

In response to a citizen concern reported to GDOE, IAO completed an audit of the administration of off-island travel relating to the 2015 International Society for Technology in Education (ISTE) and National Center for Education Statistics (NCES) Data conferences.

An audit of travel expenditures was also included in the Internal Audit Office (IAO)'s 2015-17 Risk Based Audit Plan due to the level of inherent risk. Additionally, the testing of SOPs by the IAO is a requirement stated in the 2015 GDOE Transition Plan.

Based on IAO's internal control assessment, GDOE's controls over travel pertaining to the ISTE and NCES conferences was deemed at a "Marginal" level.

IAO REPORT NO. 16-01
JQSMES LIBRARY FUND ACCOUNT 
​ISSUED DATE: 03/25/16

In response to a hotline concern, the Superintendent initiated an investigation of JQSMES's library fund account. The scope of our review was all activities of the school's library fund account from September 2013 to February 2016. 

IAO engaged this audit on March 10, 2016, and completed its investigation on March 25, 2016. Information contained in this audit is deemed confidential and not for public distribution.

IAO 2015-2017 AUDIT PLAN
2016 UPDATE
​ISSUED DATE: 10/03/16

IAO's 2015-2017 Audit Plan was updated October 2016 to reflect changes in IAO's resources, new risk-based audits, reporting of IAO's hours based on the 2015 Audit Plan Summary, and changes to the 2016 and 2017 Audit Plan listing and descriptions. IAO will update its 2015-2017 Audit Plan as necessary for 2017.

IAO REPORT NO. 15-05
NON-APPROPRIATED FUNDS
​SY 2013-2014 HIGH SCHOOLS AUDIT

GEB Policy 715 requires for each school to have NAF SOPs and for IAO to conduct an annual audit of NAF. The scope of this engagement is from July 1, 2013 to June 30, 2014 (SY 2013-2014). In SY 2013-2014, GDOE had five high schools with NAF accounts. During the school year, all high schools maintained their NAF accounts. 

Since fiscal year (FY) 2001, NAF has been a Single Audit finding for GDOE. For FY 2014, NAF was considered a significant deficiency and one of two audit findings. IAO's findings for SY 2013-2014 were reflected in GDOE's FY 2013 and 2014 Single Audit reports.

IAO REPORT NO. 15-04
NON-APPROPRIATED FUNDS 
​SY 2013-2014 MIDDLE SCHOOLS AUDIT

GEB Policy 715 required for each school to have NAF SOPs and for IAO to conduct an annual audit of NAF. The scope of this engagement is from July 1, 2013 to June 30, 2014 (SY 2013-2014). In SY 2013-2014, GDOE had eight middle schools with NAF accounts and one alternative school, J.P. Torres, with no NAF account. During the school year, all eight middle schools maintained their NAF accounts. 

Since FY 2001, NAF has been a Single Audit finding for GDOE. For FY 2014, NAF was considered a significant deficiency and one of two audit findings. IAO's findings for SY 2013-2014 were reflected in GDOE's FY 2013 and 2014 Single Audit reports. Astumbo, Oceanview, and L.P. Untalan middle schools had deficiencies for both FY's.

IAO REPORT NO. 15-03
NON-APPROPRIATED FUNDS 
​SY 2013-2014 ELEM. SCHOOLS AUDIT

GEB Policy 715 required for each school to have NAF SOPs and for IAO to conduct an annual audit of NAF. The scope of this engagement is from July 1, 2013 to June 30, 2014 (SY 2013-2014). In SY 2013-2014, GDOE had 26 elementary schools, of which 25 had NAF accounts and one, Machananao, did not have a NAF account. At the end of the school year, there were 16 SAF active accounts and 25 TAF active accounts.

IAO 2015-2017 AUDIT PLAN
​ISSUED DATE: 5/29/15

Under the direction of the Superintendent and GEB, IAO has the authority to conduct any audits, reviews, and special requests or investigate any matters within its scope of responsibilities with or without prior notice to management and/or external parties. An audit plan helps the IAO achieve its audit objectives by using its audit resources in an effective and efficient manner. The audit plan lists programs or functions to be audited by the IAO for each year.

The IAO’s 2015-2017 audit plan consists of 30 annual or mandated audits, 8 risk-based audits, and 7 discretionary or special projects. Annual or mandated audits/projects are audits/projects annually conducted by the IAO, usually due to a requirement by rules and regulations. Risk-based audits are audits selected by the IAO as priorities due to impact and likelihood of material loss to GDOE. Discretionary or special projects are projects assigned to IAO as the need arises. Complexity (Very Low to Very High), estimated hours, and staffing for each audit/project was also provided and based on auditor judgment.