Port Audit: No Findings; Port Could Qualify as Low-Risk Auditee Next Fiscal Year

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Guam –   The Port of Guam’s net financial position was just $92-thousand dollars at the end of Fiscal Year 2013, compared to $2-million net the prior year,  according to an audit released Friday by the Guam Office of Public Accountability [OPA].  

 

The independent audit, conducted by Deloitte & Touche,  attributed the decrease primarily to a #3.3 million dollar write-off and loss from disposal of property, plant and equipment.

The write-off was related to environmental studies and surveys for projects in the Port Modernization Plan that will no longer be pursued under the revised, down-sized Port Master Plan.

The audit also noted that the total number of containers and tonnage handled continued to decline, however operating revenues increased because higher Port handling charges took effect.

READ the OPA’s Highlights of the Port audit HERE   

And although cargo activity declined, overtime nearly doubled. It went from $664K in FY 2012 to $1.3M in FY 2013. The increase in overtime was attriobuted to “required scheduling described in the Port’s personnel rules and regulations”.

General expenses also increased by $798K due to merit bonuses, loan fees, and legal fees. Merit bonuses of $192K and loan fees of $116K were paid out for the year.

Legal fees also increased by 209% or $624K from $299K to $923K.

Deloitte & Touche gave the Port an unmodified, clean, opinion on its financial statements and compliance report over major federal programs. The auditors also “applauded” the Port because there were no findings pertaining to federal funds in either FY 2013, or FY 2012.

That means that the Port may qualify to become a low-risk auditee next fiscal year.

Highlights:

* Number of containers handled has been on a decline from the high of 98K in FY 2010 to 93K in FY 2012 and 91K in FY 2013

* Total cargo revenue tons declined to 1.9M

* Although containers and tonnage handled decreased, the increase of tariff rates offset the impact.

*  FY 2013 operating revenues increased 19%,  or $6.8M,  from $35.2M in FY 2012 to $42M

* Most of that came from the $5.9M increase in cargo throughput charges, due to the new crane surcharge fees implemented in January and March 2013

* Equipment and space rental increased by $610K from $6.9M to $7.5M  

* The Port’s FY 2013 operating expenses increased by 17% or $5.9M from $34.9M in FY 2012 to $40.8M in FY 2013

* That was primarily due to equipment maintenance costs

* 3  used gantry cranes were purchased in FY 2013, which caused the Port to absorb maintenance costs that were once paid for by Matson

*  FY 2013 equipment maintenance costs increased by $2.4M from $5.3M in FY 2012 to $7.7M in FY 2013.