Guam – A Management Letter, issued following a just released audit, cites the Port of Guam for a significant deficiency because some procurement documents for a 2009 local procurement, were not available for their review.
In accounting terms, a “significant deficiency” is defined as a deficiency that adversely affects a company’s ability to report financial data, reliably. According to the Management letter the procurement in question was No. PAG 08-007/09-0001 which was procured in FY2009.
“Documentation related to disqualification of an offeror, score sheets of the accepted offerors, and rationale for vendor selection were not readily available in the Authority’s procurement files.”
Port General Manager Joanne Brown told PNC that the issue had to do with fuel purchases. And the Port deals with GSA and the documents for fuel purchases are not maintained at the Port.
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The Management letter cites 5 other “deficiencies” which are:
1. Port Modernization Plan
Comment: As discussed in note 8, construction in progress related to the Port Modernization Plan consists of several task orders totaling $13.8 million as of September 30, 2012. Task orders are presented to the Board of Directors for approval. As of September 30, 2012, the Authority has not charged task orders to specific capital assets.
Recommendation: Considering potential changes in the Guam military buildup, the Authority should review and analyze the costs charged to the Port Modernization Plan. The Authority should also identify the capital assets to which the costs will ultimately be charged to.
2. Status Monitoring of Construction in Progress
Comment: Monitoring of capital project status is not in place. Currently, the Accounting Department inquires of the project status with the Engineering Department based on a review of the movement of capital projects costs.
Recommendation: The Authority should consider periodic reviews of capital project status, e.g. on a monthly or quarterly basis. Monitoring procedures should include regular meetings between project managers and accounting personnel.
3. Leave Form Approval
Comment: For one annual leave form tested (Employee no. 1420), the approver signed an annual leave form but the number of hours was left blank.
Recommendation:We recommend that leave forms be properly completed to evidence that vacation hours taken by the employees are authorized.
4. Journal Entries
Comment: Our tests of journal entries indicated that seven journal entries (Document Nos. 6438,8287, 8288, 8289, 8290, 8291 and 8386) did not contain a description or an explanation.
Recommendation: Journal entries should include an explanation of the entry.
5. Lapsed Grant Funds
Comment: Federal funding sources are to be expended within the project period specified in the grant or extension. Under grant CIP-2007-1, $39,164 in grant funds were not spent as of the grant completion date.
Recommendation: The Authority should strengthen the monitoring of grant period of availability to minimize fund lapses.
The audit notes that, despite years of economic challenges and a scaled down military buildup, the Port of Guam ended the 2012 Fiscal Year with an increase in net assets of $2.1 million dollars, the 10th straight year of increases.
The independent audit was conducted by Deloitte and Touche which gave the Port of Guam an unqualified, clean, opinion from independent
auditors Deloitte & Touche, LLP for both its financial statement and compliance report over major federal programs.