Frustration Brews in 35th Legislature Over U.S. DOE Grant Management

Lawmakers who make up the 35th Legislature are challenging the performance and accountability of a third-party fiduciary agent, tasked with managing all U.S. Department of Education grant funds allocated to the territory.

The criticism emerged during a Senate Committee meeting on Budget, Appropriations, and Finance on Tuesday, where Jenifer O’Neal, director of the Office of Management and Budget, provided an update on the status of the compliance agreement between the USVI and the U.S. Department of Education.

In 1999, due to various non-compliance issues including procurement processes and financial management, the U.S. Department of Education labeled the V.I. Government a "high-risk grantee". Consequently, in 2005, a third-party fiduciary agent was imposed to oversee financial management duties under federal regulations, due to perceived insufficient progress towards compliance.

In her statement, Ms. O'Neal explained that the current Third Party Fiduciary Agent (TPFA), McConnell & Jones LLP, took charge in December 2020. Their duty is to ensure that fiscal transactions comply with the Education Department’s General Administrative Regulations (EDGAR). The process is overseen by the OMB’s Federal Grants Specialized Processing Unit, which collaborates with the TPFA to manage funds and document expenditures.

Ms. O’Neal highlighted a plan designed to eliminate the 25 specific conditions outlined by the U.S. DOE monitoring report and transition the GVI away from the TPFA requirement. She assured that considerable progress has been made in addressing managerial deficiencies and improving documentation.