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43% of Guam Highway Fund expended on mayors' salaries; payroll cost exceeded budget level

Updated: Jul 8, 2022

By Mar-Vic Cagurangan

A big chunk of the government's revenue collections for the Guam Highway Special Revenue (GHF) and the Capital Projects Fund (CPF) in fiscal 2021 was expended on mayors' salaries, according to the Office of Public Accountability.

OPA's audit found that GHF and CPF revenues increased by $483,000, from $20.1 million in fiscal 2020 to $20.6 million in fiscal 2021.

"However, similar to prior years, $9.3 million, or 43 percent, of FY 2021 total expenditures were unrelated to highways or transportation plans, programs and projects," OPA said.

These unrelated expenditures included $8.2 million for the Mayors Council of Guam’s salaries and wages. OPA noted that the expended amount exceeded the $5.6 million budget appropriated by the legislature for the council's payroll under Public Law 35-99.

Public Auditor Benjamin Cruz has recommended that the Department of Administration set internal controls to ensure total expenditures matched the appropriation.

"According to DOA, internal controls will be reviewed to present recurrences of these excess expenditures as exceeding appropriations relating to salaries and wages are difficult to resolve and reconcile with Personnel Rules and Regulations," OPA said.

Another unrelated expenditure was the $1 million deposited into the Better Public Service Fund, which was earmarked for the Department of Revenue and Taxation’s staff training and systems.


Besides the unrelated use of funds, OPA also called the legislature's attention to conflicting laws governing the GHD.

"5 GCA § 54102 created GHF for the purpose of performing maintenance on Guam’s highways and roadways, in addition to implementing highway safety plans, programs and projects," OPA said.

"Section § 54102 (e) states that 'no part or portion of the monies in the Territorial Highway Fund (now GHF) or from whatever source derived shall be used for the maintenance or operation of a public transit system,'" OPA added.

The auditing agency noted that annual budget laws appropriate funds from the GHF-CPF to the Guam Regional Transit Authority.

OPA said the legislature needs to address the two conflicting statutes to determine which law should be followed.

Independent auditors at Ernst & Young LLP also cited misplacement of funds.

For example, auditors noted that diesel fuel surcharges are recognized as GHF revenue when they were supposed to be placed in a separate fund known as the Public Transit Fund.

OPA advised that the surcharges in question must be to the Public Transit Fund instead of the GHF.

Other highlights of the audit are as follows:

  • GHF and CPF ended FY 2021 with a net loss of $1.2 million compared to the operating deficit of $5.2 million in FY 2020. The two governmental funds, which both ended FY 2021 with a positive fund balance – GHF with $37,000 and CPF with $176,000 – for a combined total of $213,000

  • Though collections from liquid fuel taxes and use of money and property decreased $1.6 million and $2,000, respectively, there was a $2.1 million offset in collections from vehicle registration and surcharge fees, and driver’s license fees.

  • Total expenditures decreased by $3.7 million, from $24.2 million in FY 2020 to $20.5 million in FY 2021, as a result of decreased appropriations of $2.4 million by the Guam Legislature for GHF and CPF.

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