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OPA: PBS Guam audit found $554K in questioned costs

Updated: Dec 30, 2022

By Pacific Island Times News Staff

An audit of PBS Guam’s fiscal 2021 federal fund expenditures found more than half a million dollars in questioned costs involving the use of the Education Stabilization Fund, the Office of Public Accountability said in a report released today.

Citing the independent audit conducted by Ernst & Young, OPA noted that the questioned costs, amounting to $554,000, were linked to transactions identified as “not allowable activities” and other expenditures that were not properly documented.

The independent auditors attributed the spending anomaly to the PBS Guam management’s lack of experience with administering federal programs.

“Management was not aware that PBS Guam funds must be disbursed prior to requesting reimbursement,” the report said. “Effect: PBS Guam is non-compliant with the requirements of the cash management principle.”

The Education Stabilization Fund was created in 2020 under the Coronavirus Aid, Relief, and Economic Security Act “to prevent, prepare for, and respond to coronavirus."

Funds were made available to states, local educational agencies, private schools, and institutions of higher education "to support the transition to remote learning, provide support services to students, protect education-related jobs, provide institutional support, and provide grant aid to postsecondary students."

In fiscal 2021, PBS Guam had $1.2 million in total federal expenditures as a subgrantee from the Office of the Governor of Guam’s Covid-19 Education Stabilization Fund, according to OPA.


Of the total amount spent, auditors tested $751,000 worth of transactions involving 48 activities. Auditors found that:

  • 10 transactions totaling $21,547 are not allowable activities as they are not direct costs related to administering the PBS University Program;

  • 15 transactions totaling $514,700 do not have adequate documentation to support the cost charged to the program; and

  • Associated unallowable costs totaled $18,524.

In the area of cash management, the auditors noted that PBS Guam did not have written procedures as required by the Uniform Guidance for federal grants.

“In a test of 48 transactions, 28 did not have sufficient support to demonstrate that funds were disbursed prior to requesting reimbursement,” OPA said.

PBS General Manager Ina Carillo explained that the government-run television station followed its memorandum of understanding with the Office of the Governor.

“As per the MOU, PBS Guam billed the Guam State Clearinghouse based on the agreement rates, which were on PBS Guam’s rate card approved by the board of trustees,” she wrote in response to the auditors’ report.

“However, during the government of Guam-wde audit, PBS was identified as a subrecipient of the federal awards and as such, PBS is required to follow the Uniform Guidance,” she added.

OPA recommended that PBS Guam review Uniform Guidance requirements and the grant agreement and improve its procedures to ensure compliance with the cash management principle.

In a separate letter, Ernst & Young noted that during the control testing of PBS equipment purchased with federal awards, the auditors found that seven of the 30 samples did not have the federal or PBS equipment tags.

“We recommend that management enforce that the federal and PBS tags are mounted to equipment as soon as they are in service,” the auditors said.

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