GovGuam’s fiscal management compromised by outdated technology

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Outdated technology and policies impede the government of Guam’s ability to manage its finances, according to the transition committee’s report released Thursday.

A lot of ground was covered in the comprehensive section about GovGuam’s fiscal agencies. Some of the advice given to Gov. Lou Leon Guerrero would ensure her administration has a better handle on obtaining an accurate assessment of the government’s books.

For instance, the administration is urged to implement a real-time financial management system because the software currently in use is not up to par for employees who use it as part of their duties.  The report says the system’s deficiencies result in duplication of efforts and the use of manual spreadsheets.

The transition team also focused on how to make things more convenient for end consumers.  The report recommends the creation of a true “One Stop” center consisting of “all government permitting and licensing processes.”  The status quo needs “serious review and improvement,” according to the subcommittee.

Decisions on how to cut costs or contain expenses could be out of individual departments’ hands in the future. The transition report argues for centralizing these fiscal decisions—believing the Bureau of Budget and Management Research should “ultimately be accountable for ensuring that agency expenditures are in line with the budgeted amounts.”  The change, the report states, would prevent inefficiencies caused by the current decision-making process.

More tax breaks could be offered under Governor Leon Guerrero.  The report notes that enhancing Guam’s bottom line can only be accomplished through spending cuts and raising revenue.  In order to bring more tax dollars in, the transition team recommended the creation of special qualifying certificates.  A similar program is credited the development of Guam’s tourism industry decades ago.

“Perhaps, QCs for other industries can be developed to encourage new, additional investment on our island,” the report opines—although no specific examples of recommended new industries are offered.

But that’s not the only way the transition team envisions the government making more money.  The report also suggests some fees at the Department of Revenue and Taxation could be increased because some have stayed stagnant for years “while the cost of service delivery has risen.”

Existing tax exemptions for local companies may also go away temporarily, increasing the cost of doing business on Guam.  The current definitions that regulate incentives offered to main contractors has resulted in “serious abuse,” according to the report.  The transition team argues these exemptions should be suspended until an update to the law is made, which would result in “immediate additional revenue for the government.”

The report also hints at the first policy change the governor could be conflicted out of handling herself.  In order to get rid of a “disincentive” facing taxpayers, the subcommittee recommends GovGuam negotiate acceptable discount rates from credit card companies and banks, to minimize costs enough to eliminate the current service charge imposed on credit card transactions.  Doing so would encourage more payments and “potentially reduce existing collection costs related to returned checks.”

The transition report’s financial section also recommends reevaluations for legal reviews of high-value procurement bids; updates personnel rules and regulations; the hiring of at least 19 more people to fill critical positions within financial agencies; and mandating online filing of tax returns.

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Jolene Toves
Jolene joined the PNC team in 2017, as a producer, co-anchor and investigative reporter covering law enforcement, courts and crimes. Notable coverage includes the Ehlert case, the Mark Torre Jr. trial, the Allan Agababa trial, exclusive pieces on the Life of a Drug Dealer/Addict, and Life behind bars...the story of Honofre Chargualaf and Kevin Cruz. In 2019, she was promoted to Assistant News Director and Lead Anchor. From 2015 to 2017 she served as Public Relations and Promotions Manager, for the Hotel Nikko Guam handling local radio and advertorial promotions, as well as produced and directed tv commercials for the hotel. Prior to this she worked with KUAM for three years as a reporter and segment host. She began her journalism career in 2012, working with Glimpses of Guam contributing to the Guam Business Magazine, R&R magazine, MDM magazine and the Marianas Business Journal.