Education Financial Supervisory Commission

Pursuant to Public Law 30-164, the Education Financial Supervisory Commission (EFSC) was created to monitor the financial health of the Guam Department of Education (GDOE). The role of the EFSC is to develop and supervise a financial status designation of GDOE finances as well as to identify – in advance – any signs of financial distress that may lead to operational deficits. The EFSC is mandated to advise GDOE officials and the Guam Education Board to implement corrective measures.

The creation of this Commission was also a response from I Liheslaturan Gu√•han to expeditiously respond to the “high-risk grantee” designation that was placed upon GDOE in 2010.

Enabling Legislation


§ 3133. Establishment and Composition Guam Department of     Education Financial Supervisory Commission.
(a) The Guam Department of Education Financial Supervisory     Commission (EFSC) shall consist of five (5) regular voting members and     one (1) alternate member, who shall be allowed to cast a vote only in the     event a regular voting member is absent.  The EFSC shall be comprised of     the following members:

(1) The Director of the Department of Administration,  or designated representative, who  shall be member of the Senior Management Staff;

(2) The Director of the Bureau of Budget and Management Research, or designated representative, who shall be member of the Senior Management Staff;

(3) The Director of the Office of Finance and Budget,  or designated representative;

(4) The Public Auditor, or designated representative;

(5) A parent of a child currently enrolled in a public school, appointed by the Chairperson of the Committee on Education of  I Liheslaturan Guåhan, with at least five (5) years experience in the public or private sector in the management of business or financial expertise, public accounting, or similar professional activity;

(6) The General Accounting Supervisor of the Department of Administration (Alternate);

(7) The Superintendent of Education shall serve as the Executive Secretary of the EFSC in an ex-officio, nonvoting capacity; and

(8) The Deputy Superintendent of Finance of GDOE shall serve as an ex-officio member in a nonvoting capacity.

(b) EFSC Structure:

(1) The Director of the Bureau of Budget and Management Research shall serve as the Chairperson of the EFSC;

(2) The Director of the Office of Finance and Budget shall serve as the Vice Chairperson;

(3) The EFSC  shall meet  at least once  per month using a generally accepted set of parliamentary procedures to govern meetings;

(4) Three (3) members  shall constitute a quorum for the transaction of any EFSC business.  In the absence of a quorum, all meetings shall be cancelled and rescheduled within three (3) working days of the cancelled meeting;

(5) Failure of the EFSC to meet in any month shall result in a Two Hundred Fifty Dollars ($250) fine for each member, which shall be deposited into the GDOE Interscholastic Sports Program.

(c) EFSC Scope of Authority, Duties and Responsibilities Granted. The scope of authority, duties, and responsibilities granted in this Subsection  shall be for the  purpose of organizing and assembling government of Guam resources to:

(1) make recommendations on policies and practices related to the presentation and preparation of the operating budget request;

(2) make recommendations on budget request priorities;

(3) review and approve a fiscal year twelve (12)-month Expenditure Operations Plan based on the appropriation of local funds and expected funds from other sources by September 25 for the next Fiscal Year;

(4) review and approve a fiscal year twelve (12)-month Human Resources Management Plan by September 25 for the next Fiscal Year, inclusive of merit increases, promotions and hiring that directly supports the plan outlined in (3) of this Subsection;

(5) review GDOE internal hiring policies, procedures and controls and make recommendations to the Superintendent of Education;

(6) develop financial performance indicators that produce a monthly financial status designation as outlined in Subsection (d) of this Section;

(7) review GDOE financial reports for conformity with annual budget objectives;

(8) monitor expenditures that materially exceed (or will exceed on an annualized basis) the approved budget amount for any given expense category;

(9) review and approve all contracts/expenditures in excess of One Million Dollars ($1,000,000) prior to issuance of purchase orders and bid awards to verify fund expenditures conform to the plan outlined in (3) of this Subsection;

(10) monitor all contracts and renewal dates for food service, school maintenance, office reproduction equipment, solid waste disposal and telecommunication;

(11) develop a needs assessment of the GDOE Accounting Department and recommend a training plan to the Superintendent of Education;

(12) review GDOE internal accounting procedures and controls and make recommendations to the Superintendent of Education; and (13) review all information technology purchases and upgrades related to the financial management of GDOE and provide recommendations to the Superintendent of Education.

(d) Financial Status Designations.

(1) CODE A means  Stable, indicating that the  GDOE has positive variance reports in all budgeted expense categories at the time of reporting;

(2) CODE B means Warning, indicating that the GDOE has a negative variance report exceeding ten percent (10%) of the year-to-date budgeted amount in an expense category or five percent (5%) in aggregate at the time of reporting;

(3) CODE C means Watch, indicating that the GDOE has a negative variance report exceeding two percent (2%) of the approved budget amount when combining year-to-date actual and annualized projections at the time of reporting; and

(4) CODE RED indicates Emergency, whereby there is a failure to implement a corrective financial recovery plan within fifteen (15) working days of submission to EFSC as outlined in Subsection (e)(3) of this Section. An emergency may also be declared by a unanimous vote of all EFSC members should the GDOE and GEPB fail to submit a Corrective Financial Recovery Plan that is acceptable to address conditions which caused the financial status Watch designation.

(e) Financial Status Designations; Actions.

(1) CODE A-Stable. No action required;

(2) CODE B-Warning. The Superintendent of Education, in conjunction with the Deputy Superintendent of Finance, shall submit an explanation of variance within five (5) working days of an EFSC Warning to the GEPB and EFSC that explains each expenditure category above the approved budget amount as outlined in Subsection (c)(3) of this Section;

(3) CODE C-Watch. The Superintendent of Education, in conjunction with the Deputy Superintendent of Finance, shall submit a Corrective Financial Recovery Plan to eliminate Watch conditions within twenty (20) working days of an EFSC-issued Watch to the GEPB.  The GEPB shall review, modify and approve by resolution the corrective Financial Recovery Plan and submit it to the EFSC within fifteen (15) working days of receipt from the  Superintendent of Education; and

(4) CODE RED-Emergency. Under an emergency declaration, EFSC may assume all  or part of the decision making powers of the Superintendent of Education and the GEPB until a corrective financial recovery plan is developed, implemented and successful in alleviating the conditions which caused the financial status Watch designation.

SOURCE: Added by P.L. 30-164:2 (July 16, 2010)


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