Senator Therese Terlaje has raised concerns that the Legislature has not been provided all of the necessary financial information to properly prepare for its fiscal year 2021 budget discussions.
In a letter to the Legislature’s appropriations committee, Terlaje said it was revealed during today’s budget hearing with the Department of Administration that the FY 2019 financial audit for the Government of Guam is still not ready to be released due to a delay from GHURA and that the audit findings will not be available for at least another three weeks.
“When asked if there was a surplus for FY 2019, the DOA director said yes, but he was unwilling to share the total surplus amount prior to the final release of the audit. We also will not have a full picture of revenues collected for FY 2020 since the federal tax filing deadline was moved to July 15th. An updated CRER and Special Funds Tracking report will not be available until August 20th. In addition, the administration still has not provided an updated projection of revenues for FY 2021,” Terlaje said.
In a May 13th letter, Terlaje requested that the Office of Finance and Budget provide for appropriations committee members an independent projection of revenues for the remainder of FY 2020 to compare with those being projected by BBMR.
According to Terlaje, BBMR and DOA have both indicated that it had incorporated federal aid passed by Congress in March 2020, including CARES Act funds, in the revenue projection estimate, to offset the withholding and BPT losses.
“The formula used to incorporate federal funds into the revenue projections is not further explained nor set forth in the CRER. It is this formula for estimate of withholding and BPT losses, and formula for incorporation of federal aid, that I would like OFB to analyze and recommend. It is also unclear if the federal aid estimated by the administration in March is close to the actual amount of aid received by the government of Guam,” the senator said.
In addition, Terlaje said BBMR’s May 2020 Special Funds Report estimated at least $21 million in revenue losses, with a $9 million loss in the TAF. The senator said this amount of loss to the TAF is much smaller than the amount projected by GVB itself as a loss.
“Thus, I am looking to OFB for its analysis and recommended formula for predicting FY2020 losses to TAF in light of the two differing projections from GVB and BBMR. I am also concerned that the administration, notwithstanding the May 5th enactment of P.L. 35-86, has yet to transmit to the Legislature any report of COVID-19 expenditures funded by local or federal funds. As you know, it is important for the Legislature to have a complete picture of any potential budget shortfalls for the FY 2020 that might impact the FY 2021 budget and to have a realistic and responsible FY 2021 revenue estimate to avoid deficit spending,” Terlaje said.