The Calvo Administration stressed the total questioned costs represents just one percent of the $8.4 million for FESTPAC expenditures.
Guam – According to the latest findings in an Office of Public Accountability audit, there are $89 thousand in questionable costs associated with expenses incurred as a part of the 2016 Festival of the Pacific Arts or FESTPAC.
This includes $53 thousand in goods and services that were not purchased according to Guam procurement law and regulations. There was $20 thousand spent on coconut fronds and various supplies that was based on vendor quotes and not actual invoices. $10 thousand was spent on printing things like foam boards without proper documentation. $6 thousand was spent on production without an invoice. $320 was spent on food without any documentation of what food was purchased. $22 was spent on coconut oil using food stamps which is “in violation of the U.S. Supplemental Nutrition Assistance Program.” The audit also found $411 thousand was spent on only one janitorial services vendor while other services had several vendors.
In conclusion Public Auditor Doris Flores Brooks writes that Guam can be proud of the FESTPAC that the committee was able to put together but the deficiencies found should serve as lessons to future committees of island-wide events.
Meanwhile the administration sent out an official response from the FESTPAC committee stating that the $89k in questionable costs represents 1% of the total $8.4 million dollars worth of FESTPAC expenditures. Out of this amount the committee says the audit itself points out that $36K was not subject to GovGuam’s procurment process thus the committee believes there were really only $53K in questioned costs.
The FESTPAC committee says these $53K in costs were used to sole source purchase things like canoes and “other cultural arts supplies and production of FESTPAC related audio programs.” The FESTPAC committee attributes these expenditures to the Council of the Arts and Humanities or CAHA. The committee writes that “CAHA did its best to follow the procurement process on these expenditures, but proper documentation was not provided.”
READ FULL EXECUTIVE SUMMARY BELOW:
12th Festival of Pacific Arts (FESTPAC) Follow-Up Audit
OPA Report No. 17-06, December 2017
Guam successfully hosted the 12th FESTPAC, the two-week cultural event that showcased 27
island countries and territories from the Pacific and drew thousands of spectators daily from May
22, 2016 to June 4, 2016. In our second FESTPAC audit, we found that three agencies, the Council
on the Arts and Humanities Agency (CAHA), Guam Visitors Bureau (GVB), and Department of
Administration (DOA), accounted for portions of FESTPAC funds, but no agency was assigned to
account for FESTPAC funds overall. As a result, we compiled data from the three agencies to
determine the overall revenues and expenses related to FESTPAC. Based on our compilation:
$8.5 million (M) in cash was received, of which $8.1M came from government
appropriations and federal funds, and $436 thousand (K) from donations, sponsorships,
fundraising events, and vendor fees;
$8.3M in cash was spent on the following:
$4.4M paid to CAHA and GVB events managements services contractors;
$2.2M for 34 festival village huts;
$1.1M for FESTPAC-related overtime expenses for Guam Police Department (GPD),
Guam Fire Department (GFD), and Department of Public Works (DPW);
$293K for the Chamorro Village traffic light controlled crosswalk;
$164K for reimbursement of FESTPAC-related Department of Education (GDOE)
public schools’ expenses; and
$135K for Programming expenses paid by CAHA.
FESTPAC raffle and other fundraising activities of $103K were accounted for.
Overall, we identified $89K in questioned costs, including:
$53K in FESTPAC-related goods and services purchased did not comply with Guam
procurement law and regulations; and
Of the $4.4M purchased through CAHA and GVB events management services
contractors, we identified $36K in questioned costs as follows:
$20K in supplies expenses for payments processed using vendor quotes instead of
invoices for coconut fronds and various supplies;
$10K in printing expenses due to payments processed using vendor quotes instead of
invoices for $9,630 for 172 foam boards, as well as $299 for print media without
$6K in contractual services expenses for production fees paid using a vendor quote
instead of an invoice; and
$320 in meals expenses, of which $298 was unclear what items were purchased. In
addition, a $22 reimbursement for coconut oil was paid with food stamps, which is in
violation of the U.S. Supplemental Nutrition Assistance Program and is considered
fraud. A person may be found guilty in a court of law of a misdemeanor as the amount
falls below $100.1 Although the individual subsequently paid back the reimbursement
after we brought this to the FESTPAC Committee’s attention, this finding remains
since it should not have been reimbursed in the first place.
Unlike the other expenditures that had several vendors, we found that $411K, or 44% of the $942K
in contractual services expenses, was paid to one vendor for janitorial services.
Prior to April 2016, procurements totaling $3.1M were made through CAHA, with the largest
being the construction of the festival huts at $2.2M, followed by events management contract at
$800K, and $135K for various Programming Committee requests. This $3.1M spent by CAHA
must comply with Guam procurement law and regulations. Of the remaining $135K spent by
CAHA, we found that $53K in FESTPAC-related goods and services purchased did not follow
Guam procurement law and regulations.
Upon realizing that CAHA’s events management services contract was limited to $800K, the
Committee sought approval from the Attorney General to use GVB’s existing events management
services contract to support FESTPAC. According to the Attorney General, the GVB and CAHA
events management services contractors were not required to follow GovGuam procurement laws
The Committee delivered a FESTPAC that Guam can be proud of. However, we found several
deficiencies in the handling of FESTPAC funds. While we recognize that Guam’s opportunity to
host FESTPAC is a rare event, future Committees of island-wide events should learn lessons from
this experience to ensure that controls are in place for a successful event, both culturally and
Doris Flores Brooks, CPA, CGFM