Investigation probes questionable spending at GPA - KUAM.com-KUAM News: On Air. Online. On Demand.

Investigation probes questionable spending at GPA

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by Jolene Toves

Guam - An investigation into the Guam Power Authority's spending is currently underway by the Public Utilities Commission. Six months ago the Consolidated Commission on Utilities became concerned after noticing that GPA management did not comply with a PUC order. The order detailed that the agency was authorized $4.4 million for two projects but according to CCU chairman Simon Sanchez, the way it was spent is what is being scrutinized.

"Two projects that required $4.4 million one was consulting work related to the development of liquid natural gas plan and the other had to do with engineering work to repair a power plant of ours the Temis power plant," he said.

Sanchez says the consulting work for LNG project was allotted $3.9 million while the repair at the plant received $500,000. "The problem that has emerged however is GPA uses the program management group to do the LNG study the repair at the Temis power plant required some work and GPA management decided to ask the PMO that's helping for liquid natural gas to also look at that project," he said.

What should have happened is GPA was supposed to hire a new PMO or do as much as possible in house, but because they chose to use the PMO for the repairs at the plant they exceeded the $3.9 million cap. He said, "So there is a PUC order that says you can't pay the PMO more than $3.9 million well in management when they came to the CCU and says hey we goofed we did spend the $3.9 million for the PMO and we did spend the half a million dollars for the Temis repair but we used the same consulting group."

This raises the question - has GPA used the same PMO to perform other duties? "I think the PUC and the CCU are also concern that management may have asked the PMO to perform duties that might have been otherwise done in house I know the PUC in particular is looking at some marketing that was spent you know we have marketing people within GPA so you know that's a concern we brought to management as well," he said.

At this time Sanchez says a University of Guam accounting class is reviewing the expenditures. He stresses that GPA did spend the authorize amount of $4.4 million and the total cost to the rate payers did not change.

Sanchez says the GPA has acknowledged to the CCU that they have made an error in judgment in terms of the way they manage the PMO.
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