Public Auditor Benjamin Cruz, who is familiar with how Guam laws are made, enforced, and sometimes broken, plans to bring up an idea to island senators in hopes legislation will be introduced that would raise the bar on accountability for directors of autonomous agencies.
The former judge and justice, who is also a former lawmaker, plans to propose that senators pass legislation that would require pay raises for directors of government agencies be tied to their respective agencies' handling of finances – as shown in annual audits.
The idea sprang from the recent Guam Housing and Urban Renewal Authority pay-raise issue.
The chairman and commissioners on GHURA's board are supposed to hold the executive officials accountable.
In other words, if there are red flags showing the lack of full compliance with how federal housing funds were spent and accounted for, then there should be no pay raises for that director and deputy director, according to Cruz.
GHURA's board wields that power but has opted not to use it.
Instead, against the advice of the public auditor on the eve of its Sept. 11 meeting, GHURA's board decided to approve raises – not just moving forward, but also retroactively for eight months – for Ray Topasna, GHURA's director, and his deputy, Elizabeth Napoli.
The thing that bugs the public auditor about this is GHURA has had accountability issues with the proper record-keeping and accounting of how federal Department of Housing and Urban Development funds have been spent and recorded. HUD pays for nearly all of GHURA's programs, including the Section 8 rent vouchers that cost $31 million in fiscal 2019 alone. Section 8 has been relied upon by thousands of families who need help to put roofs over their heads.
GHURA has had trouble meeting deadlines when it comes to financial reporting and has been dinged, according to the Guam Office of Public Accountability, on some deficiencies, such as:
• failure to properly account for $100,000 of expenditures;
• not properly recording four properties GHURA acquired, worth $706,000;
• overstating $4.5 million in deferred revenue; and
• not properly recording $539,000 in assets and $941,000 in liabilities – instead characterizing them as "not considered material" in the audit reporting.
The public auditor also noted that under the watch of the current GHURA management, the agency singlehandedly caused a delay in the issuance of the government of Guam-wide financial audit. And this delay, by almost two months, placed all of GovGuam at risk of being questioned by bond-rating agencies, which is not a good place to be, according to the public auditor.
The consequences of GHURA's audit issues can be severe.
The public auditor said persistent failures on financial accountability can lead to the risk of being placed under federal receivership or third-party financial oversight, as was the case with the Guam Department of Education, which can be costly to the government of Guam and its taxpayers.
At this rate, based on the latest audits, Guam DOE has a better track record of financial accountability than GHURA, the public auditor said.
The legislation will be necessary, the public auditor said, because the boards and commissions that have oversight over certain autonomous agencies in the government of Guam have not lived up to their watchdog role.
Cruz compares some of the GovGuam boards and commissions to grandparents who spoil their grandchildren.
The public auditor offered the analogy of grandparents whose grandchild flunked in the 12th grade but the grandparents still gifted the kid with a car.
It's time for a better accountability system that doesn't reward public officials for their shortcomings.