The Guam Office of the Public Auditor (OPA) announced that the Guam Homeland Security/Office of Civil Defense (GHS/OCD) may owe over $34 million in misused federal funding to the Federal Emergency Management Agency (FEMA) and may owe the territory’s general fund over $8 million after FEMA restricted federal reimbursements due to severe mismanagement in the agency.
An independent auditor hired by FEMA found that GHS/OCD misused $34.7 million in funds, recommending the agency require the island’s government to pay back the costs. Due to continuous mismanagement and GHS/OCD’s failure to better handle the funding, FEMA restricted reimbursement and funding.
According to the audit, OPA found a “lack of monitoring budgets and system controls,” in GHS/OCD, adding that the federal reimbursement restriction “indicates how risky it is for the federal government to continue to invest in GHS/OCD.” While OPA began the audit after receiving a whistleblower complaint, FEMA’s earlier, private audit could not “confirm or verify the costs incurred by GHS/OCD,” or “determine whether the costs were allowable and allocable.”
The restrictions of the Homeland Security and Emergency Management grant programs require GHS/OCD to provide additional documentation and meet more criteria to access funding, which totals around $2.2 million annually. While GHS/OCD is supposed to be fully funded by the federal government, the restrictions forced Guam’s government to subsidize the agency with $8.4 million from the island’s general fund.
Auditors wrote, “Since the general fund is owed $8.4 million, a determination is needed for whether or not the general fund would be reimbursed by federal funds. Expenditures continue to be incurred without corresponding federal reimbursements.” FEMA is still reviewing reimbursement requests for the amount.
It is still unclear whether or not Guam will have to repay FEMA $34 million and incur the $8 million cost without FEMA reimbursement. OCD Administrator Charles Esteves said “FEMA could ask for zero back, or ask for all of it. I don’t know,” adding that GHS/OCD has taken steps to improve budget implementation and management but warned that without experienced personnel remaining in the agency. Esteves added, “If there’s no continuity, you can get a breakdown in internal controls. We can’t be changing out administrative assistants, grant managers, and program managers every year or two because the learning curve is too steep.”
Still, the OPA found that GHS/OCD has repeatedly failed to correct the funding inconsistencies or meet federal guidelines, and has faced grant reimbursement and federal funding restrictions since 2018. OPA is currently conducting a second audit. During a hearing before the Legislature of Guam, OPA Supervising Accountability Officer Vincent Duenas highlighted “These documents have repeatedly warned that if corrective action is not taken that there is a potential danger of GHS/OCD losing its federal funding. These noncompliance issues were caused by a lack of consistent GHS/OCD leadership and a qualified fiscal and grants management team.”
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