Performeter shows GovGuam is overspending
by Nick Delgado
Guam - The Government of Guam continues to spend beyond its means. That's the response from the public auditor after releasing its Performeter report for Fiscal Year 2009. And the island's public sector is coming dangerously close to reaching its debt ceiling.
"The analysis takes into consideration the government's financial ratios and they try to give an overview of how the government performs financially and its overall health," said Joy Baluto, an auditor with the Office of Public Accountability. The Guam OPA released its Performeter report for FY09 and out of a scale of 1 to 10 (10 being the most favorable), GovGuam received a 1.3. Auditors noted this is Guam's lowest score in seven years for the Performeter analysis and the lowest score among the ten other insular areas similarly analyzed.
Public Auditor Doris Flores Brooks said, "Nothing has changed, we continued to spend beyond our means, our deficit continues to decline and that's why if you look overall our scores are pretty low."
The report states the unfavorable rating continues primarily due to its $157 million deficit. The report adds of GovGuam's $1.2 billion in assets, 113% was funded with debt or other obligations. This means that for every dollar of assets, the Government of Guam owes $1.13 to others.
And if you think that's bad, audit supervisor Rodalyn Marquez says GovGuam is inching closer to a billion-dollar debt ceiling. "As of December 31, 2010," she said, "The Government of Guam had $753 million in obligations that are counted against the debt ceiling. What that means is that there's only a balance of $267 million available for future debt."
Marquez admits that balance is much less today, she says already $186 million has been approved for financing.
The report details $16 million of the additional FY2010 debt is going towards the Department of Land Management building; $8 million for the Guam Fire Department; $25 million from the Guam Memorial Hospital; $97 million from the Tourist Attraction Fund; and $40 million from the University of Guam's capital improvement projects.
"So if you think about it, the Government of Guam's revenue is a little close to a half-billion dollars," said Marquez, "and then a big portion - about $150 million - is scheduled to be paid for debt services. And that's a lot of money."
While this means Guam is nowhere qualifying for any cash reserves, the report did commend GovGuam for making significant efforts to resolve cumulative questioned costs, which is now at $5 million from $51 million a decade ago. As for any recommendations on what GovGuam can do to see some light at the end of the tunnel, Brooks says, "It's a delicate balance of, pardon the expression, getting your act together and how strongly can they tell you to get your act together because Guam is an independent territory, we have debates of whether or not how heavy do you want Uncle Sam to tell you what to do.
"But regardless, I think the real message is GovGuam continues to spend more than what it takes in, and as a result the deficit continue to increase, we continue to owe more tax refunds and the present scenario has not changed."
Governor's deputy press secretary Phill Leon Guerrero says their fiscal policy team is reviewing and analyzing the report.