The Office of Public Accountability has released the Guam Highway Fund’s (GHF) FY 2020 Financial Statements and Report on Compliance, showing that 35% of GHF expenditures are unrelated to highways and transportation.
GHF’s otal expenditures increased by $4.5M (or 22%) from $20.5M in FY 2019 to $25.0M in FY 2020. Of the $25.0M in expenditures, 65% (or $16.3M) was related to highways or transportation. These included $12M to Department of Public Works’ operations, $2.3M to the Guam Regional Transit Authority, $1.2M to Guam Police Department’s highway patrol, $856K in utilities for Guam Highway Streetlights, and $40K towards the Department of Education operation of public school buses.
GHF is primarily secured for the maintenance and construction of highways and roadways, as well as the implementation of all highway safety plans, programs, and projects.
However, similar to prior years, 35% (or $8.7M) of FY 2020’s total expenditures were unrelated to highways or transportation. Unrelated expenditures included $7.9M to the Mayors’ Council of Guam’s (MCOG) salaries and wages, of which only $6.2M was appropriated by the Guam Legislature.
FY 2020 Books Not Closed on a Timely Basis
In a separate issued management letter, independent auditors noted GHF’s FY 2020 books were not closed on a timely basis. Additional man-hours incurred could have been avoided if an updated financial management system was in place. DOA noted that the delay’s root cause was that the financial management system was not updated to include financial year closing as a standard feature, and their preferred remedy is to invest in a new financial management system that incorporates all required year-end closing procedures as standard features. Procurement for the new system has begun under Executive Order 2020-44, and 2021-07.
Two Material Weaknesses Related to Expenditure Accounts
Independent auditors also identified two material weaknesses in GHF’s internal control over financial reporting. One item concerned how GHF did not recognize a $1M understated liability owed to a vendor for construction services rendered as of FY 2020 end. The second finding noted that GHF’s expenditures to MCOG’s salaries and wages exceeded the amount appropriated as stated by Public Law 35-36. According to DOA, internal controls will be reviewed to prevent recurrences of these excess expenditures.