Gov. Charles W. Turnbull failed to respond to an Interior Department audit on the V.I. Education Department that included 11 major recommendations.
When the governor didn't respond by Sept. 3, the initial deadline, Interior's inspector general issued it anyway. It was released Friday.
The audit cites many areas of concern but zeroes in on special education.
In February federal officials withheld special education funds until the local department addressed compliance issues. In July, after conducting on-site visits to special education classrooms in the territory, U.S. Department of Education officials said the conditions for children were so poor that strict conditions needed to be imposed as a prerequisite for further federal funding.
The audit report noted that in September and October 1998, V.I. Education officials used $39,500 not including salaries to conduct a retreat on St. John to develop a plan for the special education program.
"In our opinion, these funds could have been used in correcting the compliance deficiencies that put the program at risk of losing federal funds," the report said.
The audit cited the school lunch program for not having adequate control of its inventory. Records were inaccurate and internal controls were weak, leaving potential for pilferage.
The report also revealed that the department didn't comply with procurement procedures by not purchasing competitively and by purchasing without contracts.
Equipment valued at $1 million was not adequately safeguarded and accounted for, the audit said.
Equipment was stored in unlocked cages in warehouses and left under leaking roofs.
In one instance on St. Croix, 11 items including computer equipment and a digital camera could not be found during a site inspection. Eventually they were located.
"We found that the items were stored in a leaky closet at the school and that no one in authority was aware of the stored equipment, although an instructor informed us that he had been inquiring about the requisitioned items," the report said. "This situation was brought to the attention of the district superintendent, who directed a school official to use the equipment immediately."
Additionally, two compliance alerts, which identify that a problem exists, were issued this year, one in January due to a delay in implementing the marine and aviation programs, and one in February to address the problem of the "untimely receipt of materials and equipment needed for vocational education."
The audit revealed that inadequate grant management in some areas put the department at risk of losing further federal funding due to noncompliance with grant program requirements.
Education fell short because it failed to establish procedures to verify correct codes for payroll costs; it did not ensure that personnel files were complete and accurate, and it did not enforce compliance with reporting requirements for the grant programs.
Though an audit has not been done for five years on the consolidated grant program, the report listed four related audits that have included remarks about Education. The department was still having problems in all four areas identified — two having to do with accounting procedures, one with administration of the school lunch program and one relative to vendor payments.
The letter to the governor included with the audit requested a response to the report by Friday, Nov. 12. No one could be reached by early Monday to determine if the governor responded to the next phase of the audit.