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Guam governor tells senators to quit dipping into ‘so-called excess revenues'

Speaker Terlaje retorts, 'look who's talking'

Governor gives the legislature a crash course in government accounting

By Mar-Vic Cagurangan

Earmarking unaudited “excess revenues” exposes the government to the risk of “blind spending” that may result in a deficit, Gov. Lou Leon Guerrero said. “Though our administration will work to implement this budget bill, it is important for the legislature to observe sound accounting principles in its appropriations, and to refrain from continuing to appropriate from ‘excess revenues’ prior to the audit,” the governor stated in a letter to Speaker Therese Terlaje after signing the government of Guam's $1 billion budget for fiscal 2023. The budget bill, now Public Law 36-107, carries five separate appropriations totaling $5 million which forms a portion of the remaining “excess revenues” from fiscal 2022. The “excess revenues” tapped by the budget law are allocated as follows: $1.48 million for the increased cost of living adjustments, $2 million for sewer connection assistance, $371,602 for the Office of the Public Auditor, $90,000 for the Guam Ancestral Land Commission, and $962,500 for charter schools. Expressing her exasperation over the legislature’s “practice of appropriating so-called excess revenues,” the governor explained the “complex accounting and cash management realities” that are factored into government financial management. “This includes the common circumstance wherein payables may not accrue in the year expenses have been incurred, which occurs frequently in the ordinary course of government accounting,” Leon Guerrero wrote. “These delayed accruals occur for a variety of reasons and in diverse circumstances – federal fund write-offs, belated payables submitted by agencies over which the administration has no direct authority or oversight, or canceled and reissued solicitations,” she added. Besides expenditures for daily obligations, the governor said, the government also covers payables for expenses incurred in prior years. “By the same token, some revenues are received in subsequent years than the fiscal year in which they are reported, resulting in limited cash flow despite reported ‘excess’ collections,” Leon Guerrero said.


The “excess revenues” remain “fluid” until they are completely audited, the governor said.

Responding to Leon Guerrero’s letter, Terlaje pointed out that the governor herself has used half of the excess funds reported by the administration for fiscal 2022. The Consolidated Revenue and Expenditure Report for July identified $65.9 million in excess revenues for fiscal 2022 revenues, plus $35.8 million in “net unobligated projected general fund revenue,” the speaker said. “Over the course of this legislative term, the administration has previously paid several appropriations utilizing either fiscal year 2021 or fiscal year 2022 excess general fund revenues,” Terlaje said. She noted that the administration has implemented programs established by previously enacted appropriation laws that were funded by “unaudited excess general fund revenues."

The following programs were funded through excess revenues from fiscal 2022: the Prugråman Ayuda Para I Taotao Ta Energy Credit Program ($26.38 million), Pharmaceutical Fund ($3.19 million), Rainy Day Fund ($15 million), a six-month moratorium on liquid fuel tax ($5 million) and the Local Employers’ Assistance Program ($25 million).


Excess revenues from fiscal 2021 have been appropriated as follows: Guam Unique Merchandise and Art ($250,000), Guam Office of Veterans Affairs ($500,000), Guam Preservation Trust for Francisco Q. Sanchez Elementary School, and Guam War Claims Fund ($10 million).

“Even after implementing programs funded with unaudited FY 2021 excess revenues, there was a general fund revenue surplus of $31 million, according to the FY 2021 GovGuam audit,” Terlaje said.

She said the remaining balance should be more than enough to cover the appropriations for COLA, sewer connections, OPA, GALC and charter schools.

"I am requesting that there be no delay in implementing these provisions mandated in Public Law 36-107,” the speaker added.

“Picking and choosing instead of funding all of these appropriations would be inconsistent with how FY 2021 and FY 2022 unaudited excess revenue appropriations were handled these last two years,” she added.

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