Guam OPA Uncovers Questionable Costs From 2012

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After nine audits, OPA makes 24 recommendations to fix issues

By Mar-Vic Cagurangan

HAGÅTÑA, Guam (Marianas Variety Guam, August 14, 2013) – Guam’s Office of Public Accountability (OPA) has conducted nine performance audits that uncovered a total of $4.3 million in questioned costs in 2012.

"Performance audits are audits that improve the effectiveness and efficiency of government operations," OPA said in its Citizen Centric report released Monday. "We provided six insight and three oversight reviews which found internal control and efficiency issues."

OPA cited for example the performance audit of the Guam Memorial Hospital, which found weak compensation controls to ensure authorized and accurate compensation to personnel, resulting in $100,000 in questioned costs annually.

During the analysis of GovGuam’s top 10 vendors, OPA found a lack of due diligence with locally funded compared to federally funded procurement that amounted to $3.7 million in questioned costs.

An audit of GovGuam’s gas fleet card program revealed that agencies do not reconcile fuel billings and that the government was paying a higher fuel price compared to autonomous agencies.

OPA issued a total of 24 recommendations for the nine audits conducted.

Low risk

OPA’s Citizen Centric Report also concluded that among GovGuam agencies receiving federal grants, the Guam Community College (GCC) continues to be the only recipient that holds a low-risk status.

GovGuam agencies require improvements in compliance in order to achieve good governance, according to OPA.

"OPA aspires for GovGuam and all its component units to become low-risk auditees," the report said. "All entities who receive federal grants should become low-risk auditees to give our people and the federal government confidence in our ability to manage federal funds."

Challenges

GCC President Mary Okada said the college has been faced with several challenges for the past several years.

"As stewards of our taxpayer dollars, we all need to be cognizant of the ways in which we expend our resources," she said.

GCC receives funds from both external federal sources and from the local government to support the expansion of career and technical workforce development opportunities for students.

"Safeguarding our financial status allows us to continue to receive these funds and sets an example of accountability for our students and for the public," Okada said.

Clean audit

An audit of GCC for fiscal 2012 released earlier this year found "no material weakness or significant deficiency" in the college’s financial records. OPA commended GCC for maintaining its low-risk status for the 12th consecutive fiscal year.

GCC closed FY2012 with a $2.3 million increase in net assets, which is a significant decrease of 73 percent, or $6.2 million, from its FY2011 $8.6 million increase in net assets.

"This was mainly due to decreases in American Recovery and Reinvestment Act grants and other federal grants, and increases in operating expenses, notably in scholarships and fellowships and institutional support," the audit said.

Sequestration

The impact of the federal government’s mandated sequestration on funds spent on Guam remains uncertain, OPA said.

"OPA will continue to work with government agencies as GovGuam addresses the uncertainty of federal funding due to the federal deficit and budget sequestration coupled with the reduced military buildup being pushed [back]," the report said.

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