Delayed audit flags CLTC lease management and collections

A delayed audit flags significant concerns with the Chamorro Land Trust Commission, which administers about 33% of Government of Guam property.  While auditors issued a clean opinion, finding no material weaknesses in internal controls and improved financial standing, the audit shows long-standing problems with lease management and collections. 

A concerning 94% of the CLTC's commercial lease payments were delinquent, or in arrears, in Fiscal Year 2023, totaling some $1.2 million.  This according to a recently released financial audit from the Office of Public Accountability.  Public Auditor BJ Cruz says the CLTC urgently needs assistance in collecting rent on commercial leases. 

"As you saw, there was like $1.2 million outstanding lease payments, on commercial leases. Someone should be out there collecting that money so they can get that money in and run the department, maybe expand the staff, maybe even use the money to pay for surveys so they can survey some areas and start dividing up the properties to be able to lease them out. But unfortunately, they have all these problems," he said.

The audit also found that the CLTC continued collecting rent on 12 properties with expired commercial leases without formal lease extensions. "I think the most major outstanding lease was the golf course," Cruz stated.

One the properties listed is the former Yigo Raceway Park that was closed down in early 2023 after the CLTC evicted the Guam Racing Federation for violating lease agreements.  "After we came out with our audit about it, about the fact that they were getting ripped off on it. The performance audit showed problems with that," he explained.

Today, the property remains unutilized. Lease negotiations with new prospective tenants, the Guam Motorsports Association, continue to drag for the last year and a half. 

The audit also points to ongoing operational challenges, including lease processing delays, limited funding for property surveys and installing basic infrastructure, and costs often passed on to land trust recipients. 

Meanwhile, Cruz says the audit was delayed due to the CLTC's accounting software issues and the constant change in leadership, noting, "Well, it is a concern that it is delayed because it’s a component unit of the Government of Guam and their not reporting on time could possibly delay the GovGuam audit."

"The unfortunate bit is the constant change in leadership up there results in not being able to keep on top of things. What they need to find is an executive director that is going to stay for an extended period to get things in order."

The last permanent CLTC director was Alice Taijeron, who stepped down in 2023. Following her departure, the role has been filled by interim leadership in an acting capacity.

KUAM News has reached out to the CLTC for comment.