Governor Calvo Orders Cash Containment; First in Series of Steps to Fix Systemic Financial Problems

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Guam – Governor Eddie Baza Calvo today took the first steps to stop runaway government spending. The Governor issued Executive Order 2011-01 just moments ago, suspending any pending personnel actions approved prior to January 3.
The Governor’s fiscal team is validating the government’s cash position. Further actions are expected once the fiscal situation is assessed and verified. In the meantime, Governor Calvo decided it was critical to stop unnecessary government spending. This comes at a time when vendor payments are being withheld, the hospital is running short of supplies, the education agencies are struggling and tax refunds are falling further behind.

“There is no doubt about the cash shortage,” Governor Calvo said. “Not a single cent will be wasted. The government can’t go on spending at the rate it is spending. I will not jeopardize government jobs and public services by allowing the fiscal condition to persist. We are taking bold actions now.”

The order specifically states, “While assessments and recommendations by the Public Auditor and the heads of government entities are being conducted and developed, all requests for personnel action, to include but not limited to recruitments, transfers, promotions, reinstatements, reemployment and limited term appointments, but excluding any and all federally funded positions, which were approved previous to January 3, 2011 and currently pending action by the Department of Administration (DOA) and Bureau of Budget & Management Research (BBMR), shall be held in abeyance until further notice.” There are exceptions to this order. They include hiring for positions directly affecting the health, education and safety of the people, which will be reviewed by the BBMR Director.

Orders to the Cabinet

The Governor directed his Cabinet to reassess agency operations and budgets, including each agency’s liabilities, reported and unreported. He also ordered them to reduce costs while enhancing efficiencies, and to identify revenue enhancement initiatives. These assessment reports are due within 21 days.

“I’m counting on these very talented men and women to contain costs and to find solutions,” Governor Calvo said. “We’re not going to wait for a payless payday to take action.”

Public Auditor Assessment of Debts

The Governor also is asking Public Auditor Doris Flores Brooks to assess and verify the liabilities of the government of Guam.

“We have to know what we owe so that we can effectively pay it down,” Governor Calvo said. “I’m grateful the Public Auditor is helping us to provide an independent assessment of our liabilities. This is information the Legislature and the executive branch can use to craft effective fiscal policy and fix these problems once and for all.”