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OPA: GovGuam wasted federal funds on unused hotel rooms procured during Covid pandemic



By Mar-Vic Cagurangan


The government of Guam squandered millions of dollars of pandemic-related federal funds due to its failure to track the utilization of Covid-19 isolation and quarantine facilities, the Office of Public Accountability reported, noting that the administration paid for more hotel rooms than needed.


The audit found that GovGuam maintained several thousand hotel rooms that were left unoccupied, resulting in $15.7 million in questioned costs from the 171 invoices paid by the Department of Administration.


While acknowledging the requirement for a significant number of rooms during the peak of the pandemic, the OPA pointed out that GovGuam failed to reckon the reduced need for quarantine and isolation facilities when the number of Covid-19 cases subsided and the restrictions were eased.


The OPA noted that the use of quarantine and isolation facilities surged between March 2020 and April 2021, and decreased significantly during recovery response months from June 2021 through October 2021.


“The need for quarantine and isolation facilities was vital to combat the Covid-19 pandemic. While we recognize that the number of individuals needing isolation was harder to predict and control even with the rollout of vaccinations, the number of visitors and returning residents traveling to Guam requiring quarantine began to decrease significantly because of vaccinations and the lessening of quarantine requirements,” Public Auditor Benjamin J. Cruz said.


“Therefore, they should have amended to reduce the minimum number of guaranteed rooms at the quarantine facility. Instead, it was not until October 2021 that GovGuam reduced the number or minimum guaranteed quarantine rooms,” he added.


Cruz said GovGuam should have used available data and information to help reduce unnecessary expenses.


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The OPA’s audit of GovGuam’s expenditures on the Covid-19 quarantine and isolation facilities from March 2020 to April 2022 found that 206,405 occupied rooms for $49 million were utilized at 74 percent while 122,424 unoccupied rooms for $12 million were utilized at 44 percent.

“We also found that the unreliability of Guam National Guard reports utilized by the Guam Homeland Security is unreliable for validating the invoices that were transmitted to the Department of Administration for payment and reports submitted did not reconcile with the purchase order or invoices,” the OPA said.


For the quarantine facilities combined, auditors found that 65 percent of rooms were unused, accounting for $2.7 million, and 35 percent of rooms used accounted for $1.3 million.


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The isolation facility did not distinguish between used or unused rooms and was invoiced at 100 percent used, accounting for $322,000, the OPA said.

At the end of May 2020, GovGuam continued to use emergency procurement for five hotels.


“Of the combined quarantine facilities, based on available data, we found 32 percent of rooms were unused, accounting for $2.2 million, and 95 percent of rooms used accounted for $17.8 million during the period,” the audit said. “For the isolation facilities, we found that 62 percent of rooms were unused, accounting for $1.5 million, and 38 percent of rooms used accounted for $2.1 million.”


The Department of Public Health & Social Services attributed the disproportionate utilization rate to the need to isolate people who tested positive for Covid-19.


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Guam has received its allocation of $553 million in coronavirus state fiscal recovery funds from the American Rescue Plan Act of 2021.


In a previous audit report released in June 2021, the OPA identified several irregularities in the procurement of hotels that had been designated as Covid-19 isolation and quarantine facilities, resulting in $3 million in questioned cost.


The OPA found a potential conflict of interest when Gov. Lou Leon Guerrero's then legal counsel and son-in-law, Haig Huynh, was placed in charge of the initial procurement for quarantine and isolation facilities.


The governor invoked her emergency powers when the government procured hotel facilities that were used to quarantine arriving passengers and government employees.


OPA, however, questioned the governor's role in the acquisition process.


While the executive order authorized the director of public health to exercise all powers set forth in the declaration, the governor delegated her legal counsel to handle the initial emergency procurement for quarantine and isolation facilities.


The governor bypassed the procuring authority already provided to the DPHSS director, the authority of GSA’s Chief Procurement Officer, under Guam procurement law, OPA said.



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