OPA raises flag on GovGuam's $1.3M questioned cost for federal grants
The government of Guam questioned costs for federal awards continue to grow, from $432,000 at the beginning of fiscal 2016 to $1.3 million in FY 2020, according to the Office of Public Accountability. The latest OPA audit showed that while the number of findings has fluctuated over the same period, the lowest in FY 2018 with four findings, it has increased substantially in FY 2020. Independent auditors Deloitte & Touche, LLP identified 18 findings in FY 2020, 16 of which relate to the 10 major federal programs. Eight of these did not comply with applicable requirements rendering them material weakness, four of which are over $200,000 in questioned costs. GovGuam and its line agencies expended$837.5 million in federal awards from 16 grantors in fiscal 2020. The largest grant came from the U.S. Department of Labor at $384 million, of which $378.5 million was for the PandemicUnemployment Assistance (PUA) and FederalPandemic Unemployment Compensation (FPUC). The second-largest grantor was the U.S. Department of Health and Human Serviceswith $184.7 million for various programs such as Medicaid at $112.8 million and Children’s HealthInsurance Program at $28.7 million. The third-largest grantor was the U.S. Department of Agriculture at $124.5 million for which $116.5 million was for the Supplemental Nutrition Assistance Program (SNAP) or better known as food stamps. In addition, GovGuam component units expended $279.4 million in federal awards.
The top three agencies were the Guam Department of Education at $75.4 million, Guam Waterworks Authority at $72.5 million, and Guam Housing and Urban Renewal Authority at $49.8 million. GovGuam also received non-cash awards of $114.6 million in FY 2020 for food stamps. Of the 18 findings in FY 2020, eight had a total questioned cost of $1.3 million, which is $202,000 more than the previous year.
The independent auditors identified four findings with questioned costs surpassing $200,000.
First was GovGuam's failure to report a $413,000 collection of overpayments to refund the federal share, which is considered as a questioned cost. OPA said although there was no disagreement with this finding, the Department of Public Health and Social Services(DPHSS) will submit a report to the Department of Administration (DOA) to reconcile overpayment records and account for the federal share. The audit also found that GovGuam did not have an analysis done on absorbing credit card fees and hotel reservations for unoccupied hotel rooms. While these may have been necessary expenditures to stimulate payments of taxes and other fees to the government and help minimize the hotels’ costs during the pandemic, no analytics supported these charges. As a result,a $400,000 questioned cost remains.
DPHSS did not have records of a recertification form for a Medicaid beneficiary who may have been ineligible for coverage. Accordingly, a prior certification was extended rather than being recertified to determine eligibility but was lacking. For this reason, a questioned cost of $226,000 resulted. The independent auditors also noted this as a repeat finding.
The independent auditors found noncompliance with Guam procurement law for an emergency procurement method and small purchase solicitations.
These findings relate to the procurement of three ambulances and construction services to upgrade a gym’s interior lighting, public restrooms, and recreational facilities. This resulted in a total questioned cost of $218,000 and noted as a repeat finding.
GovGuam’s AS400 is overdue for a replacement. DOA Division of Accounts could not facilitate a timely and periodic closing of the accounting system and generate financial information.
Consequently, the independent auditors required additional time and effort to complete the FY 2020 financial audit. GovGuam is currently procuring a replacement.