27% of highway funds used for non-related purposes

April 13, 2018

 

 

While pumping up the liquid fuel tax to augment more revenue for road projects, the government has actually been using a large portion of the Guam Highway Fund for non-related expenditures including general fund operations, according to the Office of Public Accountability.

 

OPA found that more than a quarter of GHF’s $21.4 million total expenditure in 2017 was reprogrammed for other purposes.

 

An independent audit by Deloitte and Touche found that $15.5 million, or 73 percent, of the total expenditure was spent for highway and transportation related expenditures including the Department of Public Works’ bus operations, transportation maintenance operations, and public streetlight operations.

 

The remaining $5.9 million, or 27 percent, was diverted to other entities for non-related expenditures, such as $2.1 million for the Mayor’s Council of Guam operations, $2 million for general fund operations, $986,000 for Better Public Service Fund, $500,000 for the University of Guam and $279,000 for the Guam Community College.

“The GHF is used primarily to maintain Guam’s highway and roadways, and implement highway safety plans, programs, and projects,” OPA said. “However, over the years, a number of non-highway projects have been funded.”

 

OPA said seven projects for bus repairs, street repairs, and a road with a budget of $2.6 million had no expenditures in 2017.

 

“The capital projects fund had a fund balance of $176,000 with minimal movement in the last two years,” OPA said.

The auditors also spotted a “repeat finding” regarding the Guam Regional Transit Authority’s sole source procurement for bus transportation services.

 

“Local fund totaling $2.36 million were used for Guam Regional Transit Authority for bus transportation expenditures which demonstrated no competitive procurement or which were procured through inappropriate procurement method,” Deloitte stated in the audit report.

In its previous audit, OPA said, it issued “a similar finding where the procurement record did not contain justification for the sole source procurement.”

 

At any rate, Independent auditors Deloitte and Touche, LLP issued a clean opinion on GHF’s 2017 financial audit.

“Total revenues of $20.3 million increased $690,000, or 4 percent, from fiscal year 2016 and expenditures of $21.4 million decreased by $253,000, or 1 percent,” the OPA report states.

 

OPA attributed the revenue increase to the increases in collections for liquid fuel tax and vehicle registration/drivers’ license fees.

In October last year, Gov. Eddie B Calvo signed Public Law 44-34, which raised liquid fuel tax by 04 cents, which took effect in January.

 

Sen. Frank Aguon earlier this week introduced Bill 270-34, proposing a rollback of the fuel tax increase.

 

“Without using the revenues from the increase in liquid fuel taxes, Aguon said the legislature appropriated $1.8 million from the Fiscal Year 2018 budget besides $2 million in federal funding specifically designated for road improvements,” Aguon said. “The funds appropriated to the Department of Public Works allows the agency to begin work on 19 village road improvements.”

 

Read related story

Aguon: Roll back liquid tax hike 

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