GovGuam Facing $59 Million Dollar Deficit From Last Fiscal Year

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DOA Director Christine Baleto told lawmakers that it appears as if GovGuam will be recording a $59 million dollar deficit for last fiscal year.

Guam – The Department of Administration told lawmakers today that GovGuam had a $59 million dollar deficit last fiscal year. This made vice-Speaker BJ Cruz even more apprehensive about the current year finances and next fiscal years budget.

 

During an oversight hearing at the legislature DOA Director Christine Baleto admitted to lawmakers that it appears as if GovGuam will be recording a $59 million dollar deficit for last fiscal year. “How much of a deficit have you seen in your review of the audit?” asked Cruz. “The same,” replied Baleto. “60 or 25?” asked Cruz. “59,” replied Baleto.

 

The Vice-Speaker asked DOA Director Christine Baleto if she believed that the deficit was due to not collecting as much money as they anticipated last fiscal year or due to overspending. “There’s several issues one of them is for example the Guam solid waste we’re paying all the bonds and I guess it’s an unfunded expenditure. There’s also some expenditures for DOE,” said Baleto.

The Vice-Speaker asked that they make sure their agencies bring realistic requests to the legislature when budget hearings begin for this coming fiscal year. “We now realize that we’ve had two fiscal years with $60 million dollars in deficits we’re now going to have to take off straight off the top the two percent. Some of our revenue projections may be overstated we should become more realistic,” said Vice-Speaker Cruz.

Cruz called for today’s(Tues.) oversight hearing to get an accurate picture of GovGuam’s finances after April’s Consolidated Revenue and Expenditure’s Report showed a collection of $9.3 million dollars from GMH that Cruz believed was a paper entry rather than actual cash. Today(Tues) Baleto told the Vice-Speaker that money was recorded because they believed it would be collected soon. In fact Baleto says that money was collected on June 17th and it was even slightly more than they expected or about $10.8 million.

However Cruz found out that this money was only released after DOA released about the same amount of cash to GMH. “Did you guys transfer any money to them or do a cross exchange of cash?” asked Cruz. “Well we do normally release to them on a Friday,” replied Baleto. “And how much did you release to them last Friday?” asked Cruz. “I think it was close to $11 million,” replied Baleto.

Cruz believes DOA paid GMH so that GMH could pay them. “After our meeting last Monday you transferred 11-13 million dollars to them coincidentally enough to pay yourselves back correct?” asked Cruz. “Yes,” replied Baleto.

Despite having at least a $10 million dollar shortfall in collections year to date the administration is still confident that GovGuam is on track to meet and even slightly exceed it’s forecasted revenues for this fiscal year. “Our forecasts for the remaining months are based upon five year historicals and our projections do indicate that we will meet the adopted revenues based on historical collections for the rest of the year. So you asked for the basis for it. It is a forecast and there is some methodology that is being utilized to come up with the forecast,” said BBMR Deputy Director Lester Carlson.

However, Vice-Speaker Cruz remains skeptical that GovGuam will meet forecasted revenues for this fiscal year. During the hearing he pointed out that the months of June through August are historically bad months for revenues. Nevertheless Carlson says the administration stands by it’s forecasted revenue projections.