Guam – Public Auditor Doris Flores Brooks has found “potential fraud and misuse” with DPW’s management of its heavy equipment.
According to a report from the OPA this potential fraud and misuse includes unconfirmed allegations that DPW heavy equipment and parts were used for personal purposes. Although the OPA could not prove this their findings do show “significant internal control lapses.” For example, management did not conduct physical inventories, reconcile purchase reports, and ensure proper authorization for repair orders and parts. DOA’s inventory report did not include $3.1 million in equipment and DPW’s inventory report did not include $1.1 million in equipment. There is $459 thousand in unreconciled heavy equipment purchases, $160 thousand in unnecessary heavy equipment rentals to compensate for a missing lowboy and $28 thousand in rentals for heavy equipment that was already available to DPW.
In addition, the OPA found that the DPW director accepted free heavy equipment rental services from a DPW employee’s company because DPW periodically did not have adequate heavy equipment. The OPA says the director took specific action to clear allegations against the DPW employee by requesting the Governor to accept the contribution pursuant to a section of Guam law he cited. The OPA has referred this matter to the Attorney General.
The OPA also conducted physical inspections of DPW’s heavy equipment inventory. They found that equipment could not be located, 8 units including some federally funded equipment were found parked in private residences. Some equipment was improperly cannibalized for parts. 25 units had expired registrations. They also found unusual repair orders for idle nonworking heavy equipment. For example, there were two purchase orders for two transmissions and two oil coolers for the same dump truck that has been idle since 2014.
Ultimately the OPA recommended that DPW management conduct a physical inventory check of their heavy equipment and investigate all of the findings of the report. DPW has submitted a corrective action plan to address these findings.