2006 - The Office of Public Accountability

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CreditWatch for the Government of Guam In March 2007, Standard & Poor’s placed Guam on a CreditWatch with negative implications. “The action was based on the government’s disclosure of the need to borrow up to $6 million from local banks to meet its current payroll obligation for public school system employees. The liquidity crisis is directly attributed to Guam’s longterm structural financial imbalance, with recurring deficits, a large and growing negative general fund balance, and massive long-term liabilities. The CreditWatch placement also reflects the possibility that these challenges will further diminish the government’s ability to meet operational responsibilities, while addressing long-term requirements”. The report also noted, “the government’s financial position continues to deteriorate. The general fund balance at fiscal year-end September 30, 2005 was a negative $376.9 million, compared with the total general fund expenditures of $368.6 million; the preliminary budget forecast for fiscal year 2006 indicates another $16 million general fund deficit.” Added to the FY06 deficit will be an additional $30M for earned income tax credit based on the court settlement and $123M for the payment of cost of living allowances to retirees. The projected FY06 deficit may exceed half a billion dollars. OPA Quality Control Review Government Auditing Standards, more commonly known as the Yellow Book, require audit organizations to undergo a quality control or peer review every three years. Our first review took place in August 1999, the second was in November 2002, and the third review was completed in March 2005. The OPA received a full compliance rating in 2002 and in 2005, the highest of three levels of compliance given to audit organizations. The next peer review will be conducted in 2008. Staff Training The Yellow Book also requires that all auditors performing audit work under Government Auditing Standards complete 80 hours of continuing professional education credits (CPEs) every two years, of which 24 must be government-related. 5 G.C.A. § 20304 also requires CPEs for all government auditors and accountants. CPEs are mandatory for the maintenance of professional competence. The Public Auditor recognizes the importance of ongoing training, retraining, and professional development for all personnel and is committed to maintaining, fostering, and improving OPA audit capabilities and technical skills. All staff received the required continuing professional education hours defined in the Government Auditing Standards. Over the past six years, the Public Auditor has been a strong advocate of continuing professional education. The USDA Graduate School, in conjunction with the Pacific Islands Training Initiative (PITI) grant, has provided the majority of the training. At least 40 hours of audit training annually is provided not only to Guam OPA, but also to the other Association of Pacific Islands Public Auditor (APIPA) audit offices. We again wish to express our appreciation to the Department of the Interior Office of Insular Affairs (DOI-OIA) for the continued funding of the PITI and to USDA Graduate School. Most especially, we thank Stephen OPA 2006 Annual Report p.16
Latimer for continuing to be responsive to the training needs of OPA. In 2006, OPA staff received an average of 58 CPE hours after attending some of the following courses: • Fraud Prevention & Internal Controls • Government Auditing Standards, 2003 Revision • Ethics in the Public Sector • Assessing Internal Controls in Performance Audits • Auditing for Internal Fraud • Management Controls for Directors and Managers • Tips for Auditing Procurement, Procurement Investigations, Concepts in Procurement & Grant Fraud • Financial and Performance Perspectives, Auditing in the 21st Century, Public Corruption, Yellow Book Updates, GASB Updates, AICPA Updates, Utilities Reform, Performance Measurement Featuring InstaMeasure Toolkit • Department of Interior Auditor and Investigator Training Program • Introduction to ACL for Windows DOI Training Grant In October 2003, David B. Cohen, the Department of the Interior’s Assistant Secretary for Insular Affairs, approved a $38,100 reimbursable training grant for auditor training. An additional $19,050 was approved for Investigator-related training in July 2004. A third increase of $95,200 was approved for On-the-Job Training at Department of the Interior Office of the Inspector General (DOI-IOG) Field Offices in November 2004. A fourth increase was approved in February 2007 in the amount of $66,500 for auditor and investigator training, bringing the training grant total to $218,850. Of the total $174,379 has been expended from the grant thus far. The grant is a joint initiative with the DOI- OIG, DOI-OIA, and OPA. The grant provides for reimbursement of auditor and investigator training at the Inspector General Academy, On-the-Job Training at OIG offices, and other related training. We wish to express our appreciation to DOI- OIG Insular Area Liaison Ben Privitt, who was instrumental in the development of the training grant; to Inspector General Earl Devaney for providing the On-The-Job- Training at the various offices; and to Assistant Secretary David Cohen for providing the funding. DOI-OIG Field Office Training In February 2006, OPA Management Analyst Maripaz Perez and Auditor Rodalyn Marquez attended a two-month training with the DOI-OIG’s Central Region Office in Lakewood, Colorado. This training was funded by the DOI Training grant. The program provides hands-on DOI-OIG audit training and allowed the OPA staff members to be “a part of the team.” Left photo: Response to 2005 Hurricanes in the Gulf of Mexico audit team. Right photo: Internal Control Best Practice audit team. Center photo: Guam interns Maripaz Perez and Rodalyn Marquez. OPA 2006 Annual Report p.17
Page 1 and 2: Office of the Public Auditor Annual
Page 3 and 4: Public Auditor’s Message Now in m
Page 5 and 6: Table 1: Audit Recommendations Summ
Page 7 and 8: Guam Public School System (GPSS) An
Page 9 and 10: provide sufficient oversight over t
Page 11 and 12: was not scrutinized by the Guam Eco
Page 13 and 14: July 2006 to I Mina Bente Ocho Na L
Page 15 and 16: inability to verify tax-related bal
Page 17: Graph 1: Total Revenues and Transfe
Page 21 and 22: June 2006. The four-day event featu
Page 23 and 24: OPA Management Analyst Angela Quint
Page 25 and 26: OPA Budget For FY 2006, OPA’s bud
Page 27 and 28: certain U.S. territories. Among the
Page 29 and 30: (L-R); Yuka Cabrera, Mika Cabrera,
Page 31 and 32: Appendix A, cont. Page 2 of 9 Waste
Page 33 and 34: Appendix A, Cont. Waste, Abuse, and
Page 39 and 40: Appendix B Financial Audits Issued
Page 41 and 42: Appendix B, Cont. Schedule of Feder
Page 43 and 44: Appendix B, Cont. Financial Audits
Page 45 and 46: Appendix B, Cont. Page 7 of 9 Finan
Page 47 and 48: Appendix B, Cont. Page 9 of 9 Finan
Page 49 and 50: Appendix D Hotline Calls Logged in
Page 51 and 52: March 6, 2006 The Office of the Pub
Page 53 and 54: May 24, 2006 The Office of the Publ
Page 55 and 56: Management Letter June 30, 2006 The
Page 57 and 58: August 22, 2006 The Office of the P
Page 59 and 60: December 14, 2006 Public Auditor su
Page 61 and 62: Appendix F Legislative Mandates
Page 63: eports, in written and electronic f

2006 - The Office of Public Accountability

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