By Mar-Vic Cagurangan
The Office of Public Accountability has red-flagged several anomalies in the government of Guam's disbursement of federal grants received in 2021, resulting in $41.7 million in questioned costs.
The OPA cited unjustified sole-source and emergency procurements, unnecessary spending, expenditures that were not supported by accounting records and noncompliance with the reporting requirements among several deficiencies.
GovGuam and its line agencies’ federal award expenditures have substantially increased to $1 billion in FY 2021, the OPA said.
"While the FY 2021 financial statements saw the first surplus for GovGuam since 2013, the single audit identified a substantial increase in federal expenditures, compliance findings, and questioned costs," the audit report states. "Questioned costs for federal awards have also continued to grow, from $1.1 million in FY 2019 to $41.7 million in FY 2021."
Some of the deficiencies cited by the OPA are as follows:
· Rationales for using the sole-source procurement method were not sufficient.
· In the small purchase method, less than three informal price quotes were on file.
· GovGuam is noncompliant with applicable reporting requirements.
· Required reports were not prepared or submitted.
· Reported expenditures were not supported by accounting records.
· Federal award program case files documentation demonstrated ineligibility or were not sufficient to substantiate eligibility.
· Expenditures did not agree with the recipient listing.
The OPA said GovGuam spent $732,791 on hotel rooms designated as isolation facilities that were never used, hence counted as an unnecessary cost.
Between August 2020 and May 2021, GovGuam was paying between $120 and $175 per room. During that period, however, a total of 2,183 rooms remained unoccupied, OPA said.
"Although we understand that mass reservation may have been necessary to accommodate an unknown number of quarantined travelers, we are not aware of monitoring efforts and analytics to more accurately project the required number of rooms and to minimize the cost of unoccupied rooms as experienced with the pandemic progress," OPA said.
The OPA also noted $7.2 million in questioned cost resulting from GovGuam's failure to monitor compliance with the requirements for federally funded local programs such as the Small Business Pandemic Assistance Grant and the Small Business Rental Assistance Grant, both established through the governor's executive order.
The Guam Economic Development Authority failed to check the recipients' eligibility and monitor their compliance with the requirements to ensure that the awarded grants were used for the authorized purposes.
The OPA red-marked the sole-source procurements of janitorial services, case management services and Covid isolation facilities with a combined cost of $93,953.
"Given the ease of emailing capabilities and other social media platforms, other potential suppliers should have been solicited and given opportunities to participate in these federally funded transactions," the OPA said.
For the Pandemic Unemployment Assistance, the Dislocated Workers Grants, and the Lost Wage Assistance, which were audited separately, the OPA found that a number of ineligible claimants received payments.
"Independent auditors Deloitte & Touche LLP identified 30 findings in FY 2021, of which 11 were repeat findings from the prior year and an increase from the 18 findings in FY 2020 and the eight findings in FY 2019," the OPA said.
Click here to read the full report.