• By Mar-Vc Cagurangan

Liberation Day Carnival committee's $300K purchases questioned

OPA: Mayors Council found procurement rules 'impractical'

A recent audit of the 75th Guam Island Fair and Liberation Day Carnival expenditures found a total of $300,000 worth of purchases that either did not have procurement records or were improperly made through sole source method, according to the Office of Public Accountability.

OPA said audits of previous years' fairs have repeatedly detected circumvention of Guam's procurement rules due to the Mayors’ Council of Guam's "ineffective oversight."

"The MCOG believes that following Guam procurement is not practical due to factors including a limited timeframe in planning and executing the fair and lack of annual government appropriations," OPA said in an audit report released Sunday. "Though MCOG may find it impractical to follow Guam procurement, their adherence ensures accountability and transparency of the fair’s activities."

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Records showed that the Guam Island Fair Committee spent $1.5 million for the celebration. Of this amount, $157,000 remained outstanding and had not yet been paid as of December 2019.

The audit found that the committee did not comply with Guam procurement rules and regulations for purchases of major goods and services for the 75th Liberation Day celebration, OPA said.

Auditors found no procurement records for purchases totaling $234,000 paid to 11 different fair vendors that provided electrical and plumbing services ($89,000), car raffle prize ($21,000) and containers ($20,000), among others. Such disbursements, OPA said, "did not have the rationale for the procurement method, vendor selection or rejection, and the basis of price."

OPA also said the committee used improper procurement method for $66,000 purchases of goods and services, such as the carnival security ($34,000), which was treated as a small purchase through a request for quotation. Such a purchase, OPA said, should have been a competitive sealed bid as the costs exceeded the small purchase threshold.

The committee also used sole source procurement to fly in an entertainer from the U.S. mainland to perform at the carnival. The performer was booked despite the mayors council's "cash flow concerns," OPA said.

Guam-born pop singer Pia Mia, who had her own Liberation Day float, was a major attraction at the 75th Liberation Day celebrations.

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"There were concerns from MCOG regarding the costs of booking this entertainer. Although the committee was not charged a regular talent fee, the entertainer’s specific accommodations for airfare, hotel, car rental and parade float cost the committee $59,000," OPA said. "In comparison, $35,000 was spent on all other entertainers. The expenses for this entertainer were treated as sole source as they were approved based on the entertainer’s requests."

Audit found that acquisitions of goods and services for the Liberation Day carnival expenditures were not properly managed. For example, procurements of goods and services for the fair were done by individual subcommittees, without any committee member overseeing the entire procurement processes.

"MCOG’s understanding is that its mandated oversight responsibilities, including ensuring compliance with Guam procurement, may be delegable to the appointed committee," OPA said. "Additionally, MCOG admitted that they lacked the capability and resources to effectively perform their mandate due to its primary responsibilities and conveyed their desire to no longer be the fair’s oversight entity."

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The law requires the appointment of an OPA representative to the committee. However, since OPA is mandated to audit the fair, Public Auditor Benjamin J.F. Cruz said is office opted not participate as a committee member "due to the inherent impairment of audit objectivity. "

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“Although I was recused from participating in the audit, I want to recognize and acknowledge OPA’s accountability auditors’ work in completing this mandated audit," Cruz said. "I urge the community leaders and policymakers to engage in effective dialogue and discussions to implement the audit recommendations.”

OPA recommended the legislature amend the law to relieve the mayors council of its oversight responsibility and "replace them with an entity equipped with the resources and capability to provide effective oversight and assume full responsibilities of the fair." OPA also recommended that it be removed as a committee member


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