Autonomous agencies have not remitted funds to Guam treasury since 2011
By Pacific Island Times News Staff
Three autonomous agencies have not made remittances to the general fund since 2011, owing the Guam treasury more than $36 million during the assessment years, according to the Office of Public Accountability.
OPA said the Guam Power Authority, Guam International Airport Authority and the Port Authority of Guam were required to transfer a proportioned contribution of the aggregate sum of $3.5 million annually to the general fund.
On March 31, 2011, the Department of Administration invoiced GPA, PAG, and GIAA $12.3 million each, representing an annual assessment of $875,000 for each of the fiscal years 1998 to 2011.
The collections fund was created in 1985 as a transfer policy for autonomous agencies or payment-in-lieu-of-taxes for GPA, GIAA and PAG.
The OPA’s found “little to no activity” recorded for this fund due to various barriers in transferring surplus revenues from GPA, GIAA and PAG.
“The barriers include a raise in power rates to offset the surcharge, a prohibition from bond covenants, and certain government services already provided by the agencies,” OPA said.
GPA obtained approval from the Consolidated Commission on Utilities to offer a settlement amount of $2.6 million.
However, such settlement offer was conditional on the approval by the Public Utilities Commission of a surcharge to recover the assessment from ratepayers.
The PUC has yet to approve the surcharge and no liability or other impact was recognized.
GPA has made no payments to the AACF since the fund’s inception. Subsequently, in October 2011, the U.S. Federal Emergency Management Agency (FEMA) reimbursed GPA for approximately $1.8 million for certain typhoon-related costs incurred in 2002.
DOA planned to offset the amount of the reimbursement against billings to GPA related to the AACF but due to the uncertainty of receipt, GPA has not recorded the reimbursement in the accompanying financial statements, OPA said.
Federal regulations and law, and bond covenants prohibit GIAA from transferring any funds from its operating surplus to the general fund.
Any diversion of their revenues under any formula will place them in breach of the Bond Indentures and will jeopardize ongoing and future federal funding, possibly even subjecting GIAA to millions of dollars in federal civil penalties. Accordingly, GIAA has transferred none of its revenues to the general fund for the AACF.
In May 2011, PAG requested DOA further review their $12.3 million assessment, as they believed they did not owe the entire amount based on previous transfers in 1994 and 1997 of $500,000 and $3.5 million, respectively, related to relief efforts for Typhoon Paka and the Base Realignment Closure.
“After the issuance of the invoices in March 2011, we noted the AACF has not been presented as a special revenue fund in the Government of Guam’s Basic Financial Statements from fiscal year 2012 through 2020,” OPA said.