OPA questions some GovGuam employees’ extra pay during COVID-19 shutdown

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According to OPA, federal appropriations allowed Adelup to enforce a differential pay policy. (PNC file photo)

As all GovGuam employees return to work and all suspended GovGuam operations resume, the Office of Public Accountability (OPA) has released a performance audit on GovGuam’s COVID-19 payroll expenses, finding that between March 14, 2020, and May 11, 2020, two GovGuam agencies utilized a double pay provision to compensate their employees, while 45 departments and agencies used Executive Order 2020-08 to implement differential pay for their employees.

According to OPA, GovGuam employees were paid $10.4 million for differential, double, or other pay in response to the state of emergency due to COVID-19. This was in addition to the GovGuam employees’ regular pay received during the closure and suspension of GovGuam services.

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Specifically, OPA found:

· $2.5 million in double pay for GPA and GWA;

· $2.0 million in 25% differential pay for 26 departments and agencies with top three users: GFD, GMHA, and GPD;

· $933,000 (K) in 15% differential pay for 29 departments and agencies with top three users: GMHA, MCOG, and GDOE;

· $568,000 in 10% differential pay for 42 departments and agencies with top three users PAG, GMHA, and DPHSS; and

· $4.9 million in Other Pay for 34 departments and agencies with top three users: GMHA, GWA, and GIAA.

In addition, OPA identified unclassified employees, including department and agency heads and certain elected officials, who received COVID-19 related compensation as part of the differential pay policy. This would have been in violation of Title 4, Chapter 6, §6218.2 of the Guam Code Annotated (GCA), which prohibits bonus payments for unclassified employees. However, federal appropriations allowed the Governor to enforce a differential pay policy. There were 54 elected and appointed officials who received $176,000 COVID-related compensation.

COVID-19 Relief Fund Grant

Under the Coronavirus Aid, Recovery and Economic Security (CARES) Act, the Federal Government directed $118 million to assist Guam during the COVID-19 pandemic. The CARES Act budget was based on the April 2020 U.S. Department of Treasury Guidance for State, Territorial, Local, and Tribunal Governments and submitted to the Guam Legislature in May 2020. Of the $118.0 million, $29.2 million was budgeted for COVID-19 payroll expenses for public safety, public health, health care, and human services.

GPA and GWA Utilized Double Pay Provision

According to OPA, GPA and GWA were the only GovGuam agencies that utilized the Rule 8.406 double pay provision, while other GovGuam departments and agencies used the E.O. 2020-08 Differential Pay Policy. With $2.5 million in double pay, GPA spent $1.5 million and GWA spent $1.0 million. OPA noted that these payroll expenses for GPA and GWA were not paid out of or reimbursed by the COVID-19 Relief Fund Grant.

Guam Power Authority

According to OPA, GPA compensated 399 employees $1.5 million in double pay if they reported to work or teleworked. The GPA Authority Policy on Pandemic Influenza Preparedness and Response Plan stated that personnel working from home shall be compensated at their regular pay. Essential personnel on duty were to earn regular pay and overtime based on hours worked beyond the 40-hour workweek. But according to OPA, GPA did not follow their own policy. Therefore, OPA questioned the $1.5 million in double pay given to employees during this period.

Guam Waterworks Authority

According to OPA, GWA compensated 333 employees $1.0M in double pay if they reported to work. Teleworking employees were compensated at their regular pay. Although GWA sought guidance from DOA and other GovGuam agencies on the conflicting provisions, OPA said there were conflicts relative to the interpretation of the guidance. GWA ceased the double pay and tracked employee hours for the 10% differential pay when Pandemic Condition of Readiness 2 was declared in May 2020. However, GWA employees were not paid the 10% differential because of numerous ongoing legal and legislative discussions.

Differential Pay Policy

E.O. 2020-08 implemented a Differential Pay Policy for employees working in support of the public health emergency, in areas necessary for the elimination or reduction of immediate threats to life, public health, or safety, and whose work could expose them to COVID-19. Depending on the level of potential COVID-19 exposure, the E.O. outlined three categories of differential pay: Category 1 at 25%, Category 2 at 15%, and Category 3 at 10%. Differential pay was paid out of the COVID-19 Relief Fund Grant for some agencies.

Table 1: Breakdown of Differential Pay Categories

CATEGORY AMOUNT TOP THREE AGENCIES
CAT 1 (25%) $          1,956,041 GFD, GMHA, GPD
CAT 2 (15%) $             933,442 GMHA, MCOG, GDOE
CAT 3 (10%) $             568,432 PAG, GMHA, DPHSS
TOTAL $          3,457,915  

Other Pay

In addition to the double pay provision and differential pay policy, OPA also identified $4.5 million for other pay was utilized for 34 departments and agencies with top three users: GMHA, GWA, and GIAA. Examples of other pay include compensatory time off, overtime, and night differential.

Unclassified Employees Received COVID-Related Compensation

According to OPA, unclassified employees, including department and agency heads and certain elected officials, received COVID-related compensation as part of the differential pay policy. OPA said this would have been in violation of 4 GCA §6218.2, which prohibits bonus payments, however, federal appropriations allowed the Governor to enforce a differential pay policy. In the 1978 case of Wong v. Camina, Congress can directly appropriate to GovGuam where the appropriation or grant does not provide for local legislative control nor the authority for the Guam Legislature to re-appropriate these funds. But OPA noted that the U.S. Department of Treasury guidance for the CARES Act did not specify guidance regarding classified and unclassified employees’ payroll expenses. Thus, OPA said 4 GCA §6218.2 would not be applicable to this situation.

Subsequent Event

In November 2020, the Governor of Guam’s legal counsel submitted the October COVID-19 Relief Fund report to the Guam Legislature. Of the $25.7 million COVID-19 budget-related payroll expenses, $16.4 million was spent for executive branch agencies, the Judiciary, and GMHA. There is $9.3 million available as of October 31, 2020. According to OPA, these amounts do not include the compensation for autonomous or semi-autonomous agencies, unless otherwise budgeted. The COVID-19 Relief Fund was to be spent or encumbered by December 30, 2020.

“There was an inconsistent use of legal authority for GovGuam employees’ compensation during the state of emergency in March 2020. Due to the potential violations of legal statutes, we made three recommendations to the Office of the Attorney General. We recommended they review the circumstances surrounding the application of (1) the double pay provision for GPA and GWA, (2) the compensatory leave credits for GWA, and (3) the payment of elected and appointed officials receiving COVID-related compensation. We also asked them to determine if reimbursement is necessary for employees that received this additional pay should they concur with our findings,” stated Public Auditor Benjamin J.F. Cruz.

The report may be viewed in its entirety at www.opaguam.org.

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