OPA: Conflicting rules compromise use of Guam EPA’s recycling fund

By Jayvee Vallejera

The Office of Public Accountability has tagged five deficiencies in the use of the Guam Environmental Protection Agency's Recycling Revolving Fund, resulting in limited transparency, weakened accountability and impaired reliable use of the funds.

An OPA audit today identified a primary issue: the new rules governing how the Recycling Revolving Fund is supposed to be used.

The updated rules are not reflected in the Guam Administrative Rules and Regulations. This has resulted in conflicts between laws and regulations and uncertainty on key requirements.

The audit also found that funds from the Recycling Revolving Fund that were allocated to the Mayors Council of Guam’s Island-wide Environmental Clean-up Program were not spent according to legal and budgetary requirements.

There were also unresolved questions regarding the use of the funds, OPA said, including whether the amounts reflected current-year spending or prior-year obligations. This made it difficult to determine the actual use of the funds.

“These conditions reflect material weaknesses in RRF governance, financial accountability, internal controls, and compliance oversight, which can prevent timely service delivery and erode public trust," said Public Auditor Benjamin J.F. Cruz. 

Other audit findings include OPA’s inability to determine actual revolving fund expenditures, non-compliance with legal requirements for fund disbursement and missing board-approved expenditure plans.

The audit found that, although Guam EPA updated the rules and regulations governing the use of the revolving fund, the GARR was not updated to reflect the new rules.

New laws do not automatically update the Guam Administrative Rules and Regulations. Guam EPA was supposed to update the rules for the use of the revolving fund, but this did not happen.

“The regulations were not updated to reflect the current law, internal reports could not be reliably reconciled to official records and closed-year figures were subject to unexplained revision,” the audit stated.

The Guam EPA blames the Mayors' Council of Guam for inefficiencies in the use of the Recycling Revolving Fund, citing alleged mismanagement and delays, according to the audit.

On top of persistent delays, long-standing close-out issues persisted because villages did not consistently provide receipts or maintain adequate accountability, the audit said.

The audit also found that large portions of funds allocated to the mayors council’s environmental clean-up program were not being fully used and large percentages of the allocated funds were sitting unspent.

Expenditure data from GEPA showed that, from fiscal 2017 through 2023, total expenditures of the revolving fund only totaled 52 percent (about $6.3 million), the audit said.

In one instance, the mayor’s council used only $833,000 (38 percent) of the $2.2 million certified in fiscal year 2018 for the island-wide clean-up program, resulting in the lowest utilization rate during the audit period.

GEPA granted extensions on these unspent funds through March 31, 2026, covering three previous fiscal years, but unresolved invoices dating back to fiscal 2022 made vendors reluctant to work and later reconciliations revealed missing documentation.

Ultimately, the mayors council withdrew entirely from the cleanup program in September last year.

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The mayors cited procurement restrictions, bid protests, limited vendor participation, unpaid vendor invoices dating back to 2022 and inability to achieve visible results as reasons for withdrawal.

The mayors’ council wants to return the entire Recycling Revolving Fund program, including tires, white goods and electronics, to Guam EPA, citing limited manpower and unfunded implementation costs, such as fuel, labor and personal protective equipment.

OPA recommends that Guam EPA take charge of updating the revolving fund regulations, clarify the interactions between procurement waivers and the Guam procurement law, and strengthen internal controls and monitoring for compliance.

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