OPA finds flaws in GovGuam use tax processes


The Office of Public Accountability has found significant flaws and deficiencies in GovGuam’s use tax data and processes.

OPA attributed the findings of the audit — which ran from Oct. 1, 2016 through Dec. 31, 2018 — to inadequate oversight, monitoring, and coordination among key players Customs and Quarantine Agency (CQA), the Department of Revenue and Taxation (DRT), and Department of Administration (DOA).

In calendar year 2018, CQA’s Air Cargo Operations received incoming cargoes worth $1.6 billion.

However, based on CQA’s professional judgment, GovGuam only collected $136,000 or 0.2 percent from air cargo in CY 2018.

If collected, OPA said the 4 percent use tax rate could have provided GovGuam with approximately $65.5 million.

In addition, OPA said the manual recording and assessment of incoming air cargoes has resulted in errors such as incoming cargoes not found in the E-Log records and Master Airway Bill (MAWB) numbers off by one number, and assessment of cargoes 10 days after arrival.

Without an effective system in place (preferably an electronic system) to collect, track, and record quantities and values of incoming air cargoes, OPA said CQA is exposed to risks of unaccounted, unrecorded, and unassessed incoming cargoes.