FESTPAC cost $8.1M with $89K questioned cost
Adelup claims festival brought in $125.5M in visitor economic activity
The government of Guam spent $8.1 million when it hosted the two-week Festival of Pacific Arts that showcased 27 island countries and territories, but the Office of Public accountability identified $89,000 in questioned costs.
Te governor's office said the event brought $125.million to Guam.
While three agencies — the Council on the Arts and Humanities Agency, Guam Visitors Bureau and Department of Administration — accounted for portions of FESTPAC funds, OPA found that no agency was assigned to account for FESTPAC funds overall.
Based on its compilation, OPA determined that $8.5 million in cash was received, of which $8.1 million came from government appropriations and federal funds,and $436,000 from donations, sponsorships, fundraising events, and vendor fees.
FESTPAC, which ran from May 22 to June 4, 2016, drew thousands of spectators daily.According to a press release from Adelup, Guam welcomed 65,846 visitors thought the festival period, accounting for a 25.5 percent increase in arrivals compared to the same period in 2015.
“This provided $125,590,710 in direct, indirect and induced impacts to Guam’s total economy, supporting more than 1,500 jobs,” the governor’s office said. “Much of the capital improvement projects related to FestPac continue to benefit our island, such as the renovation of the Paseo Stadium and recreation center, the Festival Village, renovated bathrooms at public parks, additional bathrooms at Chamorro Village, and a safer crosswalk in front of Chamorro Village.”
A total of $8.3 million in cash was spent on the following: $4.4 million paid to CAHA and GVB events managements services contractors; $2.2 million for 34 festival village huts; $1.1 million for FESTPAC-related overtime expenses for Guam Police Department, Guam Fire Department, and Department of Public Works; $293,000 for the Chamorro Village traffic light controlled crosswalk; $164,000 for reimbursement of FESTPAC-related public schools’ expenses; and $135,000 for programming expenses paid by CAHA. FESTPAC raffle and other fundraising activities of $103,000 were accounted for.
The questioned costs included:
· $53,000 in FESTPAC-related goods and services purchased did not comply with Guam procurement law and regulations; and
· Of the $4.4 million purchased through CAHA and GVB events management services contractors, OPA identified $36,000 in questioned costs consisting of $20,000 in supplies expenses for payments processed using vendor quotes instead of invoices for coconut fronds and various supplies; and $10,000 in printing expenses due to payments processed using vendor quotes instead of invoices for $9,630 for 172 foam boards, as well as $299 for print media without supporting documentation; $6,000 in contractual services expenses for production fees paid using a vendor quote instead of an invoice; and $320 in meals expenses, of which $298 was unclear what items were purchased.
OPA also found a $22 reimbursement for coconut oil, which was paid with food stamps, which is in violation of the U.S. Supplemental Nutrition Assistance Program and is considered fraud.
“A person may be found guilty in a court of law of a misdemeanor as the amount falls below $100,” OPA said “Although the individual subsequently paid back the reimbursement after we brought this to the FESTPAC Committee’s attention, this finding remains since it should not have been reimbursed in the first place.”
The audit also found that that $411,000, or 44 percent of the $942,000 in contractual services expenses, was paid to one vendor for janitorial services.
“Prior to April 2016, procurements totaling $3.1 million were made through CAHA, with the largest being the construction of the festival huts at $2.2 million, followed by events management contract at $800,000, and $135,000 for various Programming Committee requests,” OPA said. “This $3.1M spent by CAHA must comply with Guam procurement law and regulations.”
Nevertheless, OPA concluded the FESTPAC committee delivered a festival “that Guam can be proud of.”
“While we recognize that Guam’s opportunity to host FESTPAC is a rare event, future Committees of island-wide events should learn lessons from this experience to ensure that controls are in place for a successful event, both culturally and financially,” OPA said.
The benefits of FestPac, according to governor's office, also included international media exposure, serving as a platform for local businesses to display their “Made in Guam” products and to share their local crafts with the world.
"What is important to note, is that the funds spent also allowed for improvements around the island for our island community to enjoy for years," the governor's office said. "Previous festival hosts had noted that much of the Festival sites they created are nearly non-existent just a few years later. This is one way Guam set itself apart from the crowd."
Adelup said the expenditures for FestPac resulted in capital improvement projects such as the following:
• The Paseo Stadium and the attached recreation center were renovated
• Additional bathrooms were added to the Chamorro Village
• The huts for the Festival Village is an expanded area for Chamorro Village and has been used by various local groups to host their own events.
• Renovated restrooms at local parks throughout the island were renovated.
• Additionally, the canoe purchased by the committee is now being used for high school paddling program.