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COMMITTEE ON EDUCATION AND WORKFORCE DEVELOPMENT. 06/25/2025-AMENDED AND REPORTED OUT TO THE FLOOR 06/17/2025-AMENDED AND REPORTED OUT TO THE COMMITTEE ON RULES AND JUDICIARY BILL NO. 36-0064 Thirty-Sixth Legislature of the Virgin Islands March 28, 2025 An act amending title 33 Virgin Islands Code, chapter 111, section 31001 to align the disbursement and spending limitations of funds allotted to public schools from the Education Initiative Fund with the realities of academic planning, ensuring that funds are used to maximize student success PROPOSED BY: Senators Kurt A. Vialet and Angel L. Bolques, Jr. Co-sponsors: Clifford A. Joseph, Sr., Novelle E. Francis, Jr. Milton E. Potter and Ray Fonseca WHEREAS, school funds are allocated for schools in October to be expended by September, creating a restrictive spending window; WHEREAS, these funds are not distributed to schools until March, significantly reducing the time available for effective planning and utilization of resources; WHEREAS, the summer break beginning in June further shortens the timeframe, leaving administrators with only a brief period to plan and utilize funds before the September deadline; WHEREAS, when schools resume in August, administrators are left with just one month to spend remaining funds, often leading to rushed or inefficient expenditures that do not align with long-term educational priorities; WHEREAS, the current funding timeline limits schools’ ability to make strategic investments in staffing, infrastructure, instructional materials, and student programs; 2 WHEREAS, any funds unexpended by the September deadline are returned to the Education Initiative Fund, reducing the total amount available for direct educational use; WHEREAS, the requirement to return unspent funds results in schools expending less than their full allotment, thereby hindering their ability to implement critical programs, purchase necessary resources, and enhance student achievement; WHEREAS, the failure to fully expend allocated funds may create a misleading perception that schools require less funding than is actually needed, potentially leading to reduced future appropriations and negatively impacting long-term educational planning; WHEREAS, amending the law to make funds "available until expended" would provide schools with the necessary flexibility needed to allocate resources effectively ensuring that financial decisions are based on educational priorities rather than arbitrary spending deadlines; and WHEREAS, allowing funds to carry over beyond the fiscal year would minimize wasteful spending, improve financial and academic planning, and ensure that resources are fully utilized to maximize student success; Now, Therefore, Be it enacted by the Legislature of the Virgin Islands: SECTION 1. Title 33 Virgin Islands Code, chapter 111, section 3100i is repealed. SECTION 2. 33 Virgin Islands Code, chapter 111, section 3100i is amended by striking the language in its entirety and inserting the following language: (a) There is established in the Treasury of the Virgin Islands, a fund to be known as the Virgin Islands Education Initiative Fund (hereinafter the “Fund’’). The Commissioner of Finance shall provide for the administration of the Fund as a separate and distinct fund in the Treasury of the Government of the Virgin Islands and shall promulgate rules for the expenditure of funds and the reporting of such expenditures pursuant to the provisions of this section. (b} The Fund shall consist of: 3 (1) thirty-five percent of the proceeds derived from the games under each contract between the Virgin Islands Lottery and a private contractor of lottery games, including the proceeds under a contract with a contractor of video lottery games authorized under title 32 Virgin Islands Code, section 246(a)/ 1); (2) all sums appropriated thereto by the Legislature of the Virgin Islands; and (3) al! donations, gifts and bequests. (c) Monies in the Fund shall be dispersed by the Commissioner of Finance into an imprest fund checking account pursuant to the following formula: {1} A base allocation of $65,000 and $20,000 per public school and public adult education facility, respectively. Each public school and public adult education facility shall receive the additional sum of $20.00 per student for every enrolled student over five hundred, as determined by the fall school population report of the Office of Planning, Research and Evaluation, and the Department of Education. The fall school population report shall be submitted no later than September 1* of each fiscal year. The funds should be released within 30 days after the report is submitted. (2) Each fiscal year, each superintendent must receive the sum of $75,000 from the Fund to manage district related academics and social and emotional programs. (3) Each fiscal year, the Commissioner of Education must receive the sum of $176,000 from the Fund to pay non-American Federation of Teachets coach stipends for athletic programs. (4) Each fiscal year, the sum of $250,000 shall be allocated from the Fund to the Department of Education for the purpose of covering administrative costs incurred in the operation of the Fund and to retain one Financial Control Officer per school district to aid principals in complying with the reporting requirements of the Fund. 4 (5) Atthe end of the fiscal year, all remaining funds will remain with each school to be used for enhancing classroom instruction and resources, and for student support and intervention. The uses include the acquisition of textbooks, software, and related educational resources. (d} Principals may use monies from the Education Initiative Fund for costs associated with the management and operation of the school district's administrative functions to include: (1) Salaries and benefits for district-leve! financial control officers; (2) Communication costs, such as telephone and internet for administrative offices; (3) Professional development for administrative and financial staff; (4) Data processing costs related to student information and _ financial management systems; and (5) Necessary operating expenses for the district's administrative offices. (e) Principals shall not use monies from the Education Initiative Fund to purchase: (1} entertainment items, goods, or services; (2} more than $8,000 worth of equipment and supplies for administrative offices annually; (3) donations, raffle tickets, or other related expenditures; (4) more than $5,000 per person, legal entity, employee, or more than fifty percent of the school's total allocation on professional services, professional services provided by non-employees with specialized skills under independent contractor agreements, excluding payments for goods, materials, and travel expenses of independent contractors; (5) delinquent prior obligations; {6) vehicles; or (7) employee travel. (f) Each superintendent and school receiving an allocation under the Education Initiative Fund shall have established an imprest fund checking account. (g) The principal of each school or facility, or the next highest ranking assistant principal in the principal's absence shall be the sole authority empowered to write checks on the respective school’s imprest fund checking account. (h} All monies due to schools and educational facilities shall be allocated, disbursement, and reported in accordance with the provisions of this section as follows: (1) The Virgin Islands Department of Education shall initiate the process by formally requesting the necessary funds and preparing documentation outlining the proposed distribution of funds no later than October 1* of each fiscal year. (2) The Office of Management and Budget shall authorize the release of funds no later than November 1* of each fiscal year. (3) The Department of Finance shall disburse the funds, including processing payments to schools, no later than December |* of the fiscal year. (4) Each principal and superintendent shatl submit to the Commissioner of Education a monthly report detailing the amount, the nature, and the justification for each expenditure. Reports shall be submitted by the 15' of each month and must include receipts, and any other documentation required under the guidelines of the Virgin Islands Education Initiative Fund and the laws of the Virgin Islands. (5) The Department of Education shall compile an annual financial report summarizing the fiscal year's activities for submission to the Department of Finance by the 30th day of the month following the end of the fiscal year. (i) The Commissioner of Finance shall maintain comprehensive records of all monies deposited into and disbursed from the Fund and shall submit an annual report on the status of 6 the Fund to the Governor and the Legislature no later than the sixty days after the close of the fiscal year. G) Violations and Enforcement: (1) Any suspected or confirmed violations of the rules of the Fund to include misappropriation, misuse, or unauthorized expenditure of funds disbursed under this section shall be investigated by Department and appropriate law enforcement agencies. Where applicable, offenders shall be subject to administrative sanctions, including suspension or termination, and civil or criminal penalties under applicable laws. (2) Principals or superintendents who fail to submit required monthly or annual financial reports may have subsequent disbursements suspended until compliance is achieved and may be subject to disciplinary action by the Department of Education. (3) The Department of Education shall develop and enforce a system of progressive penalties for noncompliance, which may include written warnings, mandatory financial management training, reduction in allocations, and referral to the Virgin Islands Inspector General or Attorney General for further action. SECTION 3. The Virgin Islands Inspector General shall conduct a bi-annual audit of each Imprest Fund checking account and issue a report of the findings to the Governor and the Legislature of the Virgin Islands. BILL SUMMARY This bill amends title 33 Virgin Islands Code to align the disbursement and spending limitations of funds allotted to public schools from the Education Initiative Fund with the realities of academic planning, ensuring that funds are used to maximize student success. Section! repeals title 33 Virgin Islands Code, chapter 111, section 31001. Section 2 amends (re-enacts) title 33 Virgin Islands Code, chapter 111, section 3100i by establishing a fund to be known as the Virgin Islands Education Initiative Fund. 7 Section 3 directs the Virgin Islands Inspector General to conduct a bi-annual audit of each Imprest Fund checking account and issue a report of the findings to the Governor and the Legislature of the Virgin Islands BR25-0427/February 24, 2025/PFA/Revised/March 3, 2025 nels AMENDS 36th Legislature\ VIALET, KURT A\Amendment 36-436 wll AMENDS \36th Legislature JOSEPH, CARLA Amendment 36-4355 wn\se\.:ls AMENDS'\36th Legislature\VIALET, KURT A\Amendment 36-432