Audit Shows Inconsistencies In GovGuam Merit Bonuses

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Agencies calculated bonuses differently, paperwork not always complete

By Kyle Daly

HAGÅTÑA, Guam (Pacific Daily News, Dec. 26, 2014) – An audit report of GovGuam's merit bonus program released on Christmas Day reveals several inconsistencies with the way local government agencies have awarded retroactive bonus payments to employees.

The audit, from the Office of Public Accountability, also uncovered that bonuses totaling $11,862 were awarded to three government employees who did not receive the highest rating on evaluations. Additionally, the report states there were missing evaluation forms for two employees whose bonus payments totaled more than $5,000, and that some performance evaluations were missing authorization signatures.

The report shows agencies differed on how they calculated bonuses, how they interpreted a so-called "superior" performance rating, and the timeframe they used in evaluating an employee's performance.

The public auditor's office examined bonus pay records from fiscal years 2009 to 2013 and "other periods deemed necessary." During those five fiscal years, GovGuam spent $12.6 million in retroactive payments for more than 4,200 employees.

The Government of Guam Competitive Wage Act of 2014 suspended the merit bonus program until the Department of Administration could examine the evaluation processes agencies used to give employees bonuses, according to the report. The Department of Administration also will come up with a policy of further evaluation to administer bonuses that are granted.

The GovGuam merit bonus program was enacted in September 1991; however, several freezes on the program were put into effect for fiscal years 1996, 2002, 2003 and 2014, according to the report. The government began issuing the "first-ever payments" of merit bonuses in December 2012.


In a 2013 executive order, Gov. Eddie Calvo ordered merit bonuses be paid to employees of line agencies and the Department of Education, and that the payments cover whatever was owed to employees from previous years.

The report states that different legal opinions among the agencies' legal counsels "created inconsistencies" in the timeframe under review. Review periods ranged from three to 23 years among different agencies.

The audit also shows inconsistencies with the way merit bonuses were calculated, and found that agencies had "different interpretations of the law." According to Guam law, a merit bonus is a payment in addition to a salary increment. Some agencies calculated bonuses based on current salaries, while others used increment salaries.

Auditors also found that the Judiciary of Guam awarded bonuses to employees who did not achieve the highest rating on a performance evaluation. The judiciary considered "outstanding" as the highest rating and "superior" as the second highest rating.

"Employees who received either outstanding or superior ratings, even though not the highest rating possible, received a merit bonus because of the interpretation of the law by JOG's legal counsel," the report states. "All other agencies tested interpreted the law by awarding a merit bonus to employees who received the highest possible performance evaluation rating."

Other problems

For the audit, OPA took a small sample of government employees of different agencies and found that seven merit bonus payments were awarded to three employees who did not receive the highest rating to be eligible for a bonus. Those employees were from the Guam Visitors Bureau, the Guam Police Department and the Department of Corrections. Their evaluations resulted in bonus payments that totaled $11,862.

The report states that three evaluations for two Guam Housing Corporation employees, which resulted in a total of $5,020 in bonus payments, could not be verified because the evaluation forms were missing.

Missing signatures

OPA also found that of a sampling of more than 180 performance evaluations from different agencies, 19 signatures on 14 evaluations were missing. Resulting payments for these evaluations totaled more than $21,800.

From the five fiscal years examined, the report states that the highest merit bonus awarded was $29,710 and the lowest was $237. The Department of Public Health and Social Services had the highest total cost of merit bonuses with $2.2 million.

The wage act did not set a deadline for DOA to submit an evaluation policy for awarding bonuses. the Office of Public Accountability suggests in its report that the Department of Administration submit an assessment no later than Sept. 30, "but not without first seeking clarification on the Merit Bonus law from the Attorney General."

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