OPA: GovGuam Gets “Qualified Opinion,” Again, On Its Handling of Federal Grant Funds

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Guam – GovGuam has once again received a “qualified opinion ” on its Compliance and Internal Controls for the expenditure of Federal Funds during Fiscal Year 2010.

A qualified audit opinion is given if the auditor disagrees with the treatment or disclosure of information in the financial statements. GovGuam has received qualifications on its Single Audit reports in each of the past 20 years, since Fiscal Year 1991, which OPA says is the earliest records on file.

The independent audit was conducted by Deloitte and Touche.

READ the audit Highlights of GovGuam’s Compliance and Internal Controls

Among the issues cited:

9 Findings of which 7 are considered Material Weaknesses:

1. Cash Management: Federal Funds can NOT be used to pay debts or expenditures beyond the scope of the award … BUT … in December 2010 the Guam Department of Administration transferred $3 million dollars for the Bryne Memorial Justice Grant to fund daily operations of the general fund. The $3M was subsequently returned in January of this year.

2. Post-Closing Adjustments: a significant number of post-closing adjustments were approved 7 to 8 months after the fiscal year ended.

3. Fixed Assets: The Layon Landfill ($43.8M), the Southern Region Health Center ($6M) and federally funded highway projects ($882-thousand) were not recorded as construction work in progress Superior Court did not record $615K in equipment.

4. Reporting: GovGuam agencies did not consistently prepare the required reports or maintain accounting records to support the report amounts.

*2 outlays on 2 required federal award forms submitted by Guam DOL differed from expenditures by $44K and $202K.
*total outlays reported by DPHSS differed by $145K
*total outlays reported by Civil Defense differed by $44K

5. Eligibility:

* no documentation on $2.4 million to indicate verification of income eligibility in 70 cases of  Medicaid and Temporary Assistance for Needy Families.

*this has been a continuing finding

6. Procurement, Suspension & Debarment: In 9 transactions, services were extended past the end of the contract period without written determinations indicating why it was not practical to award another contract at the time of the extension.

7. Equipment and Real Property Management:

*GovGuam has not performed the required comprehensive inventories of its physical property in FY 2010 or in previous fiscal years. This has been a continuing finding.