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April 14, 2004 2 min read
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Puerto Rico Faces Loss Of Federal Title I Aid

Puerto Rico stands to lose nearly $110 million in Title I aid for disadvantaged children because of mismanagement, according to a federal audit report issued March 30.

The Department of Education’s inspector general said that $16 million had already reverted to the U.S. Treasury and that another $94 million in lapsed funds would also be lost to Puerto Rico unless the education agency of the island commonwealth could show evidence that it obligated expenses during the grant periods reviewed. The funding is from five Title I grants awarded from Oct. 1, 1997 to July 1, 2001.

In May 2002, the report says, Puerto Rico was designated a “high risk” grantee because of problems with the education agency’s “fiscal and program accountability.” Those included failure to adhere to procurement requirements, lack of proper internal controls, and actions leading to the indictments of the former secretary of education and others.

In a March 12 letter, the Puerto Rico education department said it was “working in cooperation” with federal officials to ensure the reimbursement of the Title I aid to Puerto Rico as quickly as possible.

The commonwealth, the letter said, “has developed a methodology, which has been accepted by [the U.S. Education Department] in recent conversations, which will allow [it] to demonstrate the timely obligation of the Title I grants.”

—Erik W. Robelen

New York City Chided In Federal E-Rate Audit

New York City cannot adequately assure that computers and other equipment purchased with federal “E- rate” discounts for telecommunications are being used for their intended purposes, as required by law, an audit by the inspector general’s office of the federal Department of Education says.

The March 30 report says New York City lacks controls over its inventory of school computers and related equipment bought with federal funds, based on a sample of 12 schools that received a combined $536,566 in federally subsidized technology.

Federal auditors found that the schools did not consistently maintain records that identified the source of the property and the percentage of federal participation in its cost, as required by federal regulations. The report advises that the Education Department require city school administrators to adopt comprehensive policies and procedures for keeping inventories of computers and related equipment bought with federal money.

John Wall, the finance administrator of the 1.1 million-student New York City school system, responded to the inspector general’s draft report by saying he concurred with the federal recommendation.

"[W]e will continue to reinforce the procedures necessary for the management of equipment,” Mr. Wall wrote in a March 15 letter to the federal department.

—Andrew Trotter

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