July 1, 2008

Honorable Benigno R. Fitial

Governor of the Northern Mariana Islands

Caller Box 10007

Saipan, MP 96950

Dear Governor Fitial:

We are pleased with the progress that the Commonwealth of the Northern
Mariana Islands Public School System (CNMI PSS) continues to make to
improve its programmatic and fiscal accountability. We would also like
to recognize the efforts of the CNMI PSS staff under the leadership of
Commissioner David Borja to ensure fiscal accountability of Department
funds, while continuing to implement corrective actions to address audit
findings. The Department will continue to monitor the progress of CNMI
PSS, and offer technical assistance to the extent feasible when it is
requested by CNMI PSS.

Grant awards made to CNMI PSS for FY 2008 will be awarded subject to the
three special conditions enclosed, which the Department will incorporate
into CNMI PSS's FY 2008 grant award documents. Based on consistent
progress that CNMI PSS has demonstrated, the frequency by which CNMI PSS
must submit reports to the Department will be reduced from biennial to
annual reporting. However, should appropriate corrective actions cease
or fiscal or program accountability problems recur in the future, the
Department reserves the right to take appropriate actions, such as:
reinstating CNMI PSS's "high-risk" status and imposing additional
special conditions to CNMI's grant awards.

If you have any questions or require further assistance, have your staff
contact Christine Jackson, the primary contact for the Management
Improvement Team within the Office of the Secretary, at (202) 260-2516
or via

e-mail at christine.jackson@ed.gov.

We are hopeful that CNMI PSS will sustain its progress toward improving
the use of, and accountability for Department funds to support
educational services to benefit its students. We look forward to
continuing to work with you to improve the delivery of Federal education
services so that no child in CNMI is left behind.

Sincerely,

/a/ Philip A. Maestri

Philip A. Maestri

Director

Risk Management Service

cc: Dr. David Borja

Commissioner of Education

CNMI Public Schools System

Mr. Roman C. Benavente

Chairman

Board of Education

Enclosure

[Commonwealth of the Northern Mariana Islands Public School System -
Special Conditions]{.underline}

1.  **Single Audits and Reports:** CNMI PSS shall continue to conduct
    single audits and submit reports on an annual basis in a timely and
    complete manner. All single audits shall be completed and the
    reports published within nine months after the end of each fiscal
    year, as required by the Single Audit Act of 1984, as amended. If,
    for any reason, CNMI PSS expects an audit or report to be delayed
    and late, it shall notify the Department's contact person of the
    reason and extent of the delay as soon as possible.

2.  **Updates on CNMI Web Site:** CNMI PSS shall continue to post
    information regarding its budget, applications, and reports on its
    website for access by the general public.

3.  **Reporting Requirements:** CNMI PSS shall continue to provide a
    detailed report on an annual basis that describes its administration
    of program funds, including both direct and indirect expenditures,
    and progress of each significant aspect of the programs at the
    district and State levels. Specifically, CNMI PSS shall also
    demonstrate how it is addressing the repeat audit findings
    associated with monitoring and evaluating Department programs, and
    tracking of property purchased with Department funds. These reports
    shall be signed by the authorized official of CNMI PSS and submitted
    to the Department no later than thirty days after the end of the FY
    2008 budget period. If a report is not timely or is not considered
    acceptable by the Department, i.e., does not contain enough
    information to demonstrate progress, after consultation with CNMI
    PSS, the Department may restrict the amount of grant funds that can
    be drawn down until sufficient documentation is provided.

> All required reports submitted by CNMI PSS to the Department under
> these special conditions should be submitted to:
>
> Christine Jackson
>
> Senior Consultant
>
> Risk Management Service
>
> Office of the Secretary
>
> 400 Maryland Avenue, S.W.
>
> LBJ Building, Room 7E230
>
> Washington, DC 20202