The practice in past gubernatorial administrations of maintaining what’s euphemistically called “net payroll” – when the government of Guam doesn’t actually pay (as it is required to do) the taxes and other items deducted from employees’ paychecks – has repeated at Guam Memorial Hospital as recently as all of last year.
Altogether GMH has been assessed $8.7 million in unpaid taxes and penalties for not remitting withholding tax payments that were already deducted from GMH employees’ paychecks.
GMH failed to make the required payments to Rev and Tax in the final quarter of 2014; the first, second and third quarters of 2015; the final quarter of 2017; and throughout 2018.
This took place during Gov. Eddie Calvo’s administration. The Leon Guerrero administration asserts this problem isn’t happening under its watch.
Still, the $8.7 million debt has been kicked over to the new administration.
On Wednesday, GMH Chief Financial Officer Benita Manglona was let go. She was the hospital’s CFO in most of the years these withholding tax payments weren’t remitted.
When asked for Manglona’s explanation, GMH's months-old chief executive officer, Lillian Perez-Posadas, said: “I don’t want to dwell on that. Going forward is what I want to focus on.”
It's not about dwelling on a problem.
There needs to be an explanation to the public and an attempt to get some form of accountability. Did Manglona act alone? Did she do so at the direction from or with cooperation of the Calvo administration's fiscal team, former GMH CEO PeterJohn Camacho and ultimately Gov. Calvo and Lt. Gov. Ray Tenorio? Chances are Manglona didn’t act alone.
The new administration asked Manglona to stay, in the interim, even after the change of administration, so to let go of her now seems to be an attempt to brush aside this systemic problem.
This isn't the first time GovGuam has failed to remit payroll-deducted money that it's legally obligated to hand off to the appropriate entity. Past gubernatorial administrations and certain other agencies have withheld the remittance of retirement contributions from the Government of Guam Retirement Fund. Certain GovGuam employees’ paycheck-deductible loan payments have also been delayed in prior years.
The practice of skimming employees’ tax payments and retirement payments keeps repeating because the only consequence of note has been for a GovGuam entity to enter into an installment plan to pay what's owed. We don't recall anyone being prosecuted for it.
And when these GovGuam debts get so big that installment plans are no longer sustainable, GovGuam borrows the money, resulting in double jeopardy to taxpayers.
There are things GovGuam can do to avoid a repeat of this problem.
GovGuam can trim its payroll to a level that won't force it to skip legally obligated payments.
In GMH's case, the core issue is for the public hospital to reevaluate its workforce numbers and costs.
While it must fill medically necessary vacated positions for nurses, physicians and other key medical staff, the size and justification for its sizable administrative pool needs a thorough and honest review.
GMH and its board need to figure out whether keeping the status quo is more important than keeping the lights on, elevators working for patients, its roof from leaking, and making payments to medical suppliers.