March 30, 2004

# Control Number

# ED-OIG/A02-D0020

## Honorable César A. Rey-Hernández

## Secretary of Education

Puerto Rico Department of Education

Calle Teniente González, Esq. Calle Calaf -- 12^th^ Floor

Urb. Tres Monjitas

San Juan, Puerto Rico 00919

Dear Secretary Rey-Hernández:

This is our Final Audit Report entitled *Puerto Rico Department of
Education's (PRDE) Special Education Expenditures for the period, July
1, 2002 to December 31, 2002.* The objective of our audit was to
determine if the non-salary, Individuals with Disabilities Education Act
(IDEA), Part B, Special Education expenditures reported by PRDE for the
six-month period ending December 31, 2002, were allowable and spent in
accordance with Federal law and regulations. During the course of the
expenditure review, we found that PRDE had allowed approximately \$38.1
million to lapse for the grant award years 1997 through 2001. We also
found that PRDE could not provide supporting documentation for
expenditures totaling \$122,901. Additionally, PRDE paid \$17,000 for a
trailer that was not used for Special Education students.

We provided a draft of this report to PRDE. Based on PRDE's response,
dated March 12, 2004, and documentation provided with the response, we
made changes to the final audit report regarding unsupported
expenditures. The remaining findings and recommendations did not change
due to PRDE's response. We have summarized PRDE's comments after each
finding and have included PRDE's entire response as an Attachment.

**BACKGROUND**

IDEA, Part B, was designed to ensure that all children with disabilities
have available to them a free appropriate public education that
emphasizes special education and related services designed to meet their
unique needs and prepare them for employment and independent living.

On May 29, 2002, the U.S. Department of Education (ED) designated PRDE
as a "high-risk" grantee under 34 C.F.R. § 80.12 because of problems in
PRDE's fiscal and program accountability such as:

-   late submission of Single Audits,

-   failure to adhere to procurement regulations and procedures,

-   lack of proper internal controls, and

-   actions leading to the indictments of the former Secretary of
    Education and other associated individuals.

On June 27, 2002, PRDE submitted a Corrective Action Plan that outlined
steps already taken and those to be taken to address the problems and
ensure compliance with all of the requirements applicable to ED's
programs.

On September 4, 2002, ED informed PRDE that the Office of Special
Education and Rehabilitative Services (OSERS) conditionally approved
Puerto Rico's Eligibility Document Submission for Federal Fiscal Year
2002 under IDEA, Part B. These Special Conditions included providing
quarterly expenditure and progress reports for each program.

On January 31, 2003, PRDE submitted to ED the first quarterly report,
which covered the six-month period, July 1, 2002 to December 31, 2002.
The report covered \$258 million in expenditures incurred by PRDE from
Federal education funds for this six-month period. Our audit covers
non-salary related Special Education expenditures that totaled
\$13,535,521, as reported by PRDE.

**AUDIT RESULTS**

**Finding 1 PRDE had approximately \$38.1 million in Special Education
funds that have lapsed**

PRDE did not effectively manage its Federal grant funds. As a result,
PRDE will be unable to use \$38,115,522 in five Special Education
grants, awarded from July 9, 1997, through July 1, 2001. These funds
could have been used to benefit Special Education students. Of that
amount, \$2,965,555 from one of the grant awards was de-obligated and
reverted to the U. S. Treasury on September 30, 2003. The remaining
\$35,149,968 from the other four grants lapsed and will revert to the
U.S. Treasury unless PRDE can provide evidence to ED of outstanding
expenses obligated during the grant periods.

According to 34 C.F.R. § 80.20(b)(2),[^1] "Accounting records . . . must
contain information pertaining to grant or subgrant awards and
authorizations, obligations, unobligated balances, assets, liabilities,
outlays or expenditures, and income."

The regulations at 34 C.F.R. § 80.20(b)(3) state, "Internal Control . .
. Effective control and accountability must be maintained for all grant
and subgrant cash . . . ."

Pursuant to 34 C.F.R. § 80.23(a) and (b), "Where a funding period is
specified, a grantee may charge to the award only costs resulting from
obligations of the funding period unless carryover of unobligated
balances is permitted, in which case the carryover balances may be
charged for costs resulting from obligations of the subsequent funding
period. . . . A grantee must liquidate all obligations incurred under
the award not later than 90 days after the end of the funding

period. . . . The Federal agency may extend this deadline at the request
of the grantee."

Under the "Tydings Amendment," Section 421(b) of the General Education
Provisions Act, 20 U.S.C. 1225(b), any funds not obligated and expended
during the period for which they were awarded become carryover funds and
may be obligated and expended during the succeeding fiscal year.

ED's Grant Administration and Payment System (GAPS) shows information on
grant awards, such as authorizations, confirmed deposits, draws, and
available balances. As of March 12, 2004, GAPS reported the following
Special Education grant award funds as lapsed:

**[Grant Award]{.underline} [Authorization]{.underline}** **[Lapsed
Funds]{.underline}**

H027A970115 \$ 21,308,942 \$ 2,965,555

H027A980115 31,761,179 2,476,942

H027A990115 37,448,755 6,421,710

H027A000115 43,909,097 21,897,123

H027A010115 [56,447,698]{.underline} [4,354,192]{.underline}

###### Totals \$190,875,671 \$ 38,115,522

Of the \$38,115,522 in lapsed funds, \$2,965,555 from award H027A970115
reverted to the U.S. Treasury on September 30, 2003.

PRDE did not closely monitor available grant balances. According to PRDE
officials, the problem began when PRDE's Budget Division did not open
grant accounts timely in the Puerto Rico Treasury Department's Puerto
Rico Integrated Financial Accounting System (PRIFAS). PRDE officials
stated that this forced them to charge payroll for the new grants to the
previous grant year or any other grant that had an available balance,
resulting in untimely multiple adjusting entries in GAPS.

Additionally, PRDE officials stated that their Accounting Division did
not obtain the payroll report, known as the GL 200, from the Puerto Rico
Treasury Department until two to three months after the payroll had been
processed. Consequently, PRDE had to make multiple adjusting entries
months after the charges were made and, in some instances, after the
grant had been closed in GAPS.

PRDE officials stated that they allowed charges to be made to previous
grant years because the account codes in PRIFAS remained open for five
years, as opposed to three years in GAPS. This allowed charges to be
made against the grants for funding periods already closed in GAPS.

We concluded that, had internal controls been in place to prevent lapsed
funds, approximately \$38.1 million could have been better used to
provide Special Education services to Puerto Rico's students.

**Recommendations**

We recommend that the Assistant Secretary for OSERS require PRDE to:

1.  Provide evidence to OSERS of any valid obligations made within the
    authorized award periods so that grants, with funds that have not
    yet reverted to the U.S. Treasury, can be reopened and funds
    liquidated;

2.  Access and use the data in GAPS to closely monitor available grant
    balances;

3.  Implement a system that will require PRDE's Budget Division to open
    new grant account codes upon the receipt of the Grant Award
    Notification;

4.  Open the grant account codes in PRIFAS timely and make payroll
    charges to the corresponding grant year only;

5.  Implement a system that will allow the receipt of the GL 200 payroll
    report from the Puerto Rico Treasury Department no more than two
    weeks after the payroll has been processed; and

6.  Implement a system that will require PRDE's Accounting Division to
    make timely reconciliations to the GL 200 payroll report and timely
    adjusting entries to GAPS, as appropriate.

**PRDE's response**

PRDE stated that it is working in cooperation with ED to ensure that
lapsed Special Education funds can be reimbursed to PRDE as quickly as
possible. During recent conversations with ED, PRDE explained that it
properly obligated the funds in question during the authorized period,
but ED had not reimbursed the funds. PRDE indicated that once it
provides evidence to ED of obligations that were properly incurred, but
not reimbursed, ED would reopen the grants and permit PRDE to liquidate
the funds.

**OIG's reply**

We considered PRDE's response, but did not change our finding or
recommendations. Although PRDE is working with ED to ensure that funds
can be reimbursed, PRDE must provide evidence that the obligations were
incurred within the grant period. As of March 12, 2004, the amount of
lapsed funds for grant award H027A010115 changed to \$4,354,192. As a
result, PRDE had lapsed funds totaling \$38,115,522.

Although PRDE reported it is in the process of implementing
recommendation 1.1, it did not present a corrective action plan
addressing the remaining recommendations to avoid this situation in the
future. Specifically, PRDE did not address recommendations 1.2 through
1.6. As a result, PRDE is unable to ensure that Special Education funds
will not continue to lapse and revert to the U.S. Treasury.

**Finding 2 PRDE could not provide supporting documentation and used
Special Education funds for purposes other than to serve Special
Education students**

Our review of a sample of non-salary Special Education expenditures
reported by PRDE for the period July 1, 2002, through December 31, 2002,
disclosed that PRDE could not provide supporting documentation for
expenditures totaling \$122,901 for transportation services. This
occurred because PRDE did not maintain an adequate filing system for
supporting documentation of expenditures. As a result, PRDE could not
assure ED that funds were expended properly.

Additionally, PRDE used \$17,000 of Special Education funds to purchase
a trailer that was intended for the use of Special Education students.
Instead, the trailer housed the school's counselor and social worker.
The Special Education students were not benefiting from the trailer
because PRDE's Office for Public Schools Improvement still needed to
repair the unsafe condition of the trailer's ramp.

According to 34 C.F.R. § 80.20(a), "\[F\]iscal control and accounting
procedures of the State, as well as its subgrantees and cost-type
contractors, must be sufficient to . . . (2) Permit the tracing of funds
to a level of expenditures adequate to establish that such funds have
not been used in violation of the restrictions and prohibitions of
applicable statutes." Further, 34 C.F.R § 80.20 (b)(2) states, "Grantees
and subgrantees must maintain records which adequately identify the
source and application of funds provided for financially-assisted
activities. These records must contain information pertaining to grant
or subgrant awards and authorizations, obligations, unobligated
balances, assets, liabilities, outlays or expenditures, and income."

The regulations at 34 C.F.R. § 80.20(b)(6) state, "Accounting records
must be supported by such source documentation as cancelled checks, paid
bills, payrolls, time and attendance records, contract and subgrant
award documents, etc."

**Recommendations**

We recommend that the Assistant Secretary for OSERS require PRDE to:

1.  Return to ED \$122,901 in unsupported costs or provide supporting
    documentation of costs expended;

2.  Institute controls to ensure all expenses paid are allowable and all
    documentation supporting expenses paid to contractors are
    maintained; and

3.  Complete the trailer's handicapped facilities to make them
    accessible for Special Education students.

**PRDE's response**

PRDE provided supporting documentation for the unsupported
transportation expenditures for the Bayamón region and described its
process for reimbursement of transportation costs. PRDE re-assigned the
trailer for use by Special Education students. PRDE provided an
affidavit signed by the school director acknowledging that the Special
Education teacher started using the trailer effective February 23, 2004.
Additionally, PRDE stated that although none of the students required
wheel-chair access to enter the trailer, they planned to decrease the
slope of the ramp to make the trailer wheel-chair accessible. Finally,
PRDE stated it would use this trailer for the Special Education program
and students for the remainder of its usable life.

**OIG's reply**

We reviewed PRDE's response and numerous exhibits and determined that of
the \$612,429 in unsupported transportation expenditures reported in the
draft audit report, \$122,901 remained unsupported. PRDE did not provide
payment vouchers supporting these transportation expenditures. PRDE's
corrective actions should improve the process for approving, paying, and
maintaining supporting documentation for transportation services.

Our position and recommendation remain unchanged regarding PRDE's use of
the trailer. As a result of our finding, PRDE became aware of the
improper situation and relocated the Special Education teacher to the
trailer. Additionally, our recommendation has not been fully implemented
because PRDE was still in the process of making the trailer wheel-chair
accessible.

**OTHER MATTERS**

During our audit work, we noticed significant lapsed funds in program
areas that are in addition to the scope of this audit. On December 9,
2003, we issued an Interim Audit Memorandum (State and Local No. 04-02)
to ED's Chief Financial Officer identifying a total of approximately
\$217.4 million in ED grant funds that would lapse by December 31, 2003.
This amount included the \$38.3 million reported in the draft of this
report, the \$96.3 million reported in our concurrent draft audit report
on PRDE's Title I Expenditures (report No. ED-OIG/A02D0014), and \$82.8
million we identified in grant funds that are from programs outside the
scope of these two audits. As of March 12, 2004, PRDE had lapsed funds
totaling \$38.1 million and \$109.8 million for Special Education and
Title I grants, respectively. Had internal controls been in place to
prevent lapsed funds, pending evidence of any outstanding obligations,
approximately \$230.7 million in ED grants could have been better used
to provide services to Puerto Rico's students.

**OBJECTIVE, SCOPE, AND METHODOLOGY**

The objective of our audit was to determine if the non-salary, Special
Education expenditures reported by PRDE for the six-month period ending
December 31, 2002, were allowable and in accordance with Federal law and
regulations.

To accomplish our audit objective, we reviewed PRDE's fiscal year 2002
Single Audit report and documents supporting the expenditures selected
for testing. In addition, we interviewed PRDE's Central Office officials
and PRDE's regional and school officials. We performed our fieldwork at
PRDE's offices in Hato Rey, Puerto Rico, from June 25, 2003, through
October 20, 2003, the date of our exit conference.

To test the expenditures for petitions of funds and transportation
services, we made site visits to schools and regional offices. We made
site visits from September 10, 2003, through September 18, 2003, to the
following schools: Benigno Fernandez Garcia, Abraham Lincoln, Ramon
Marin, Walter MC Jones, Ramon B. Lopez, S.U. Eugenio Maria de Hostos,
and Almirante Sur I. We also made site visits to the Ponce, San Juan,
and Bayamón School regions on September 16, 19, and 22, 2003,
respectively.

To achieve our audit objective, we selected both random and judgmental
samples from the universe developed from the \$29,263,065 of Special
Education expenditures reported by PRDE in its January 31, 2003, report
to ED. Of that amount, \$13,535,521 represented non-salary related
expenditures. Included in this total were expenses not covered by the
Special Conditions reporting requirement (2002/2003 expenditures). We
stratified our sample between non-salary related expenses for those
expenditures covered by the Special Conditions and those expenditures
not covered by the Special Conditions. The universe of non-salary
expenditures covered by the Special Conditions included 55 expenditures
totaling \$4,499,350. The universe of non-salary expenditures not
covered by the Special Conditions had 621 expenditures totaling
\$9,036,171, including numerous negative adjusting transactions.

We sampled 14 expenditures from the universe of expenditures covered by
the Special Conditions; 25 expenditures from the universe of
expenditures not covered by the Special Conditions; and 5 judgmentally
selected negative expenditures from the universe of expenditures not
covered by the Special Conditions.

The sample of 14 expenditures were stratified by dollar volume, omitting
transactions under \$10,000 using the following strata:

> \$10,000 - \$399,999 10 expenditures
>
> \$400,000 plus 4 expenditures

The sample of 25 expenditures from the universe of positive expenditures
not covered by the Special Conditions was stratified by dollar volume,
using the following strata:

> \$10,000 - \$99,999 12 expenditures
>
> \$100,000 - \$399,999 6 expenditures
>
> \$400,000 plus 7 expenditures

The judgmental sample of 5 negative expenditures not covered by the
Special Conditions was based on the highest dollar expenditures.

In total, our samples accounted for \$8,072,669 (60 percent) of the
total reported non-salary related Special Education expenditures.
However, included in our samples were seven "Petition of Funds"
transactions. These transactions represented the disbursement of funds
to Community Schools and were not actually seven transactions, but
multiple (10 plus) expenditures, supporting one transaction. As a
result, we selected a judgmental sample based on the schools receiving
the most funds. Using this basis, we judgmentally selected seven schools
receiving \$3,000 or more.

To achieve our objective, we relied on the computer-processed data
provided by PRDE to ED in its report dated January 31, 2003. To test the
reliability and completeness of PRDE's data, we attempted to reconcile
the expenditures reported by PRDE to drawdowns reported in GAPS. Based
upon this test, we concluded that the data was not complete, but was
sufficiently reliable for audit purposes. While verifying PRDE's GAPS
reconciliations, we found five grants with closed funding periods that
had lapsed funds. Consequently, we incorporated this matter and its
effects in the AUDIT RESULTS section of this report.

We conducted the audit in accordance with generally accepted government
auditing standards appropriate to the limited scope of the audit
described above.

**STATEMENT ON MANAGEMENT CONTROLS**

As part of this audit we assessed the system of management controls
applicable to PRDE's administration of Special Education expenditures
and Special Education account balances. Our assessment was performed to
gain an understanding of PRDE's system. Based on previous knowledge
gained through our prior audits (ED-OIG/A01-90006, ED-OIG/A01-90007,
ED-OIG/A01-A0004, ED-OIG/A02-B0012, ED-OIG/A02-B0025, and
ED-OIG/A02-C0017) and ED's designation of PRDE as a "high-risk" grantee
under 34 C.F.R. § 80.12, we determined the level of control risk, that
is the risk that material errors, or irregularities, or illegal actions
may occur, to be high. We found that PRDE lacked adequate controls for
managing its Special Education account balances and for expending
Special Education funds. These weaknesses and their effects are fully
discussed in the AUDIT RESULTS section of this report.

**ADMINISTRATIVE MATTERS**

If you have any additional comments or information that you believe may
have a bearing on the resolution of this audit, you should send them
directly to the following Education Department official, who will
consider them before taking final Departmental action on the audit:

Troy R. Justesen

> Acting Deputy Assistant Secretary
>
> Office of Special Education and Rehabilitative Services
>
> U.S. Department of Education
>
> 400 Maryland Ave., SW
>
> Washington, D.C. 20202

It is the policy of the U.S. Department of Education to expedite the
resolution of audits by initiating timely action on the findings and
recommendations contained therein. Therefore, receipt of your comments
within 30 days would be greatly appreciated.

Statements that managerial practices need improvements, as well as other
conclusions and recommendations in this report represent the opinions of
the Office of Inspector General. Determinations of corrective action to
be taken will be made by the appropriate Department of Education
officials.

In accordance with the Freedom of Information Act (5 U.S.C. § 552),
reports issued by the Office of Inspector General are available to
members of the press and general public to the extent information
contained therein is not subject to exemptions in the Act.

Sincerely,

/s/

Daniel P. Schultz

Regional Inspector General

for Audit

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**Attachment**

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height="0.5986111111111111in"}

# 

# 

# OIG DRAFT AUDIT REPORT

**PRDE's SPECIAL EDUCATION EXPENDITURES**

## AUDIT CONTROL NO. ED-OIG/A02-D0020

The Puerto Rico Department of Education (PRDE) appreciates the
opportunity to respond to the Office of Inspector General (OIG) findings
set out in its January 26, 2004, draft audit report. This response was
originally due thirty days after the date of the letter (February 25,
2004). On February 17, 2004, the PRDE requested an extension to respond
to the findings due to the ongoing negotiations with the U.S. Department
of Education on the Finding One. OIG granted the extension and required
that this response be submitted no later than March 12, 2004.

PRDE has the following response to the findings contained in the audit
report.

#### [Finding One -- PRDE had approximately \$38.3 million in Special Education funds that have lapsed]{.underline} 

Finding One states that \$35,374,583 of Special Education grant money
"will revert to the U.S. Treasury unless PRDE can provide evidence to ED
of outstanding expenses obligated during the grant period."

PRDE is working in cooperation with the U.S. Department of Education
(ED) to ensure that these funds can be reimbursed to PRDE as quickly as
possible. During recent conversations with ED, PRDE explained that it
properly obligated the funds in question during the authorized award
periods. Federal accounts were properly opened, and expenses incurred to
the relevant accounts, but funds were not reimbursed to PRDE. It should
be noted that because these Special Education grants exceed \$10
million, PRDE is required to use the zero balance/reimbursement
technique for these funds under the Treasury-State Agreement between the
United States and Puerto Rico.

PRDE has developed a methodology, which has been accepted by ED in
recent conversations, which will allow PRDE to demonstrate the timely
obligation of the Special Education grants. ED has stated that once PRDE
provides evidence of obligations that were properly incurred, but not
reimbursed, ED will reopen these grants and permit PRDE to liquidate the
funds in question.

[**Finding Two -- PRDE could not provide supporting documentation and
used Special Education funds for purposes other than to serve Special
Education students**]{.underline}

(a) ***Transportation Expenditures***

During its audit, OIG identified a series of transportation expenditures
from the Bayamon Region and requested that PRDE provide documentation
supporting the allowability of the costs to determine if the
transportation expenses were provided to eligible students with
disabilities. During the audit period, PRDE staff could not locate
supporting documentation at the Bayamon Region, and its constituent
school districts, Naranjito, Toa Alta, Bayamon, Catano, Dorado and
Guyanabo school district, for those transactions processed on the
payment request numbers: 03AP0139 and 03001326. These transactions total
\$612,429.

The unsupported expenditures were paid to vendors that provided
transportation services to students with disabilities. To obtain payment
as a vendor, each vendor is required to submit a reimbursement request
to the District Office designated for transportation. This request
identifies the vendor's name, social security number and date the
transportation expenditure was incurred. After receipt of the payment
request or invoice, an official then completes a certification document
to authenticate the expenditures as valid expenditure for a child with a
disability. These requests for reimbursement are then combined into a
payment document for review at the regional level.

The Regional transportation officer compiles a payment document with
several invoices to be paid for submission to the Treasury Department
for payment. This payment document identifies the payee, the payee's
social security number, the date services were rendered, the amount to
be paid, and the Federal funding source for payment. This document is
reviewed and certified by the Regional transportation official
designated to review transportation expenses and is submitted to the
Treasury Department for processing and input into the PRIFAS system.
Checks are issued to the vendors after the review process is completed.

PRDE has collected supporting documentation for the unsupported
expenditures requested for review by the OIG audit for transportation
expenditures from the Bayamón region. Below is a table summarizing the
information from the Bayamón region for the expenditures not reviewed by
the auditors:

\[The table contained names and payment details. We removed the table
due to the Privacy Act.\]

\(b\) ***Trailer***

During the Spring Semester, the Benigno Fernandez Garcia Pre-Technical
School purchased a trailer for the use of special education students.
This trailer was purchased to serve students with disabilities in the
pre-vocational program located at the school. However, due to a
programmatic change, the pre-vocational program was relocated to the
Salvador Brau School. The Benigno Fernandez Garcia Pre-Technical School
redesignated the office for use of the social worker and a school
counselor from August of 2003 to February 20, 2004. The audit determined
that because the trailer was intended for the use of Special Education
students, but the school temporarily directed that the trailer house the
school's counselor and social worker, that the \$17,000 be converted to
the exclusive use of eligible special education students.

PRDE has since reassigned the trailer for use by special education
students. The special education teacher for the Benigno Fernandez Garcia
Pre-Technical School has been relocated to the trailer. The students are
those students who require a separate classroom at the local school.
None of the students requires wheel-chair access to enter the ramp.
Since February 23, 2004, the trailer has been used exclusively as a
classroom location for twenty-five special education students. See Ex.
68. PRDE will use this trailer for the special education program and
students for the remainder of its usable life.

**[RECOMMENDATIONS:]{.underline}**

***2.1. -- Return to ED \$612,429 in unsupported costs or provide
supporting documentation of costs expended:***

PRDE has fully supported the identified costs. Should the OIG require
additional documentation to support these funds, PRDE can provide this
documentation.

***2.2 -- Institute controls to ensure all expenses paid are allowable
and all documentation supporting expenses paid to contractors are
maintained; and***

PRDE has taken steps to consolidate its ability to track expenditures
for transportation. In the fall of 2003, PRDE created a pilot program at
the Caguas Region designed to streamline delivery of services to
students with disabilities and to consolidate much of the central
administrative functions at the local level. As part of the pilot
program, the Caguas Region has designated an official responsible for
provision of appropriate

transportation to students with disabilities and instituted new
procedures to verify transportation expenses. These procedures include:

-   Verification of Attendance of students with disabilities

-   Periodic Targeted monitoring of vendor's routes

-   Certification by school directors of each date of attendance

This pilot program, including the revised procedures for processing
transportation expenses, will be instituted in all regions on the Island
for the 2004-2005 school year. PRDE also proposes the following
corrective actions to remedy this finding:

-   [Analysis of the documentation procedure at the Regional Level
    regarding expenditures paid through the PRIFAS system]{.underline}

    -   PRDE's Manual for the new Pilot Program includes new procedures
        outlined above regarding transportation expenditures. These
        procedures will become mandatory for all regions for the
        2004-2005 school year as those regions are converted into the
        new service delivery model.

    -   PRDE proposes to conduct an evaluation of the steps currently
        used to track expenditures. PRDE is currently developing a plan
        to restructure the financial and administrative procedures for
        the Special Education Department. This analysis will contain a
        cost-benefit analysis and a weighing of the potential risks in
        pursuing this option to determine if methods are available to
        simplify the process.

    -   The PRDE will enhance its system of controls by providing
        additional training to personnel from the Offices of External
        Resources and Finance. This training will be conducted during
        the first quarter of the upcoming year.

-   [Additional mechanized remedies]{.underline}. PRDE is investigating
    additional mechanized remedies that may improve its ability to track
    payments to vendors. Within the short term, PRDE is considering
    implementing the following actions:

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-   The revised procedures for the Caguas pilot project require that the
    transportation official include new requirements for verification
    and supporting documentation for transportation expenses.

-   PRDE will implement the revised procedures currently being
    implemented in the Caguas Region on an Island-wide basis during the
    next school year. PRDE will review and, if necessary, revise the new
    procedures regarding processing of transportation expenses for
    private vendors to determine if further adaptations are required.

***2.3 -- Complete the trailer's handicapped facilities to make them
accessible for Special Education students***

As described above, the trailer has been redesignated for the sole use
of Special Education students. The existing ramp for the trailer is at
too steep an incline for wheel-chair bound students to enter the
trailer. Currently, none of the students assigned for class in the
trailer requires wheel-chair access. However, PRDE will take the
necessary steps to decrease the slope of the ramp, so that it is
wheel-chair accessible.

[^1]: Unless otherwise specified, all regulatory citations are to the
    July 1, 2002 volume.