Feb. 18, 2005 – The U.S. Virgin Islands Department of Education has failed to use nearly $3 million in federal funds this year, and these moneys have reverted to the U.S. Treasury.
Last year at this time the reversion came to $2,038,531; this year it has grown to $2,893,637, for a two-year total of nearly $5 million. (See "V.I. Leads in Losing, Failing to Use School Funds").
The $2,893,637 went back to the U.S. Treasury shortly after the end of the federal fiscal year, on Sept. 30, 2004. The money had been available to the USVI government for a period of three years through nine different educational grant programs, according to a report recently issued by the U.S. Department of Education. The report offers a detailed tabulation of the funds not used by all the states and territories.
The Virgin Islands, again this year, won the dubious distinction of sending more money per-pupil back to the U.S. Treasury than any other territory or state; and the contest was not even close.
This year the unused money came to $151.21 per Virgin Islands pupil – more than one hundred times the average amount of unused federal education funds in the nation as a whole. That number was $1.38 per pupil. In California the state's educators failed to use a grand total of 28 cents a pupil.
Second in the non-use-per-pupil category was Guam with a reversion of $64.69 per head. Mississippi was the state with the highest record of non-utilization, but its rate, $7.08, was about one-twentieth of that of the V.I.
Most of the non-used educational funds were in the hands of the V.I. Education Department; the total was $2,795,636 according to the US DOE. Another $78,061 in federal education funds were assigned to other agencies.
The US DOE records show that there was a remnant of $10,295 in a Drug-Free Schools program run by the Governor's Office, and the following leftovers in three programs run by the V.I. Department of Human Services: vocational rehabilitation services, $49,885; in-service training in vocational rehabilitation, $17,809; and supported employment, $72.
The big reversions were in two of the five programs run by the Education Department: $2,147,894 in the catchall category -Consolidated Grants to Insular Areas program, and $528,552 in the Technology Literacy Challenge Fund, which was designed to bring computers, Internet connections and software to the schools. These schools, in turn, were supposed to share their new technology with the community generally.
Assuming that the 19,000 students in USVI schools are organized into classrooms with 40 students each, there would be 475 classrooms; at a little more than $2000 each, it would be possible to bring a brand-new computer into every other USVI classroom, just by using this year's lapsed technology funds.
There were lapsed funds in three other education programs: grants to state education agencies, $82,419; education of children with disabilities, $4,183; and Goal 2000: Educate America Act, $2,588.
Some lapsed funds are inevitable but usually at the marginal level. Suppose a school has a grant that can only be used for buying blackboards (in this make-believe scenario). The kind of blackboard required by the federal authorities costs $1,785 each, and the grant is for $18,000. So the school buys ten of them for $17,850 and sends the remaining $150 back to Washington.
But the lapsed funds in the V.I. were not in the marginal category.
Of particular interest is the $2,147,894 in the Consolidated Grants to Insular Areas program; this program is much more relaxed in its design and in its regulations than other US DOE grant programs because it is both a formula program and one where the usual categorical funding requirements are waived. No state government can apply for a program with such relatively relaxed rules.
As background, US DOE has two kinds of grant programs, discretionary ones and those working with formulae. In discretionary programs the state education agencies (SEAs) have to write competitive proposals, and the most attractive proposals get funded and the rest do not. Only $100,000 of the lapsed USVI funds fall into this category.
The rest of the funds not used in the Virgin Islands were in formula programs, where a mathematical formula is used to distribute the funds, with the number of students and the poverty level of those students, for example, being often used within the various formulae.
The Consolidated Grants program is a formula program and it has an unusual amount of flexibility in it. The islands can use it to fund any of the US DOE categorical programs, and can (always with the feds looking over the Department's shoulder) move funds from one category to another. If there aren't many kids needing bilingual education, or many homeless kids, for example, then the funds can be switched away from those programs into other federally-authorized programs. Such arrangements in other fields are called Block Grant Programs, and are regarded fondly by state and local officials who run them, because they can be managed to meet specific local needs.
So why did the VI Department of Education send so much more back to Washington, per pupil, than every other state or territorial education agency? Was a decision made that the money was not needed? Did the Department not know of the availability of the funds? Was it incapable of managing the process of securing and spending the funds appropriately? Or was there some other reason for its actions?
The Source sought answers to these questions from the Department for more than 48 hours, starting early on Wednesday, Feb. 16, but could secure no substantive response from the Department beyond a verbal statement by Juel Anderson, the Department's press contact, that the Commissioner was looking into the matter and that a faxed press statement would be distributed to the media at some unspecified later date.
When 'and if' this arrives, the Source will report on it.
Similarly, efforts to secure substantive comments from the USVI Board of Education were not successful, but Tyrone Molyneaux, President of the St. Croix Federation of Teachers, was forthright in his reactions:
"At a time when the education system is suffering from limited local funding, and from a 15% cut in the budget, it is unacceptable that the Department is sending back millions of dollars to Washington," he said, adding "I am surprised that this is happening (assuming the federal data is accurate) when the Department has been saying that they are using all of the federal funds."
He said that the problem is a "management issue" not a question of a policy decision that the funds are not needed.
"Until the financial management accounting system required by the Compliance Agreement [between the federal and the territorial Departments of Education] is in place, we will continue to have these problems," he predicted, adding:
"The Virgin Islands cannot afford to continue losing these funds."
Molyneaux called the Source during a break in the ongoing negotiations between the teachers' union and the VI government over teachers' wages, benefits and working conditions.
Editor's note: David North has had more than 40 years of experience working with federal grant programs, in a variety of roles, as a state and federal official, as an independent panel member judging funding proposals, as a contract employee working on government grants and contracts, as a project director of government-funded grants and contracts, and as a reporter writing about such programs.
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