GPSS faces budget shortfall
2006 funds used for prior obligations

Article published December 14, 2005

By Oyaol Ngirairikl
Pacific Daily News

The Guam Public School System can't continue living paycheck to paycheck, which is what's its having to do to meet payroll and other obligations, education officials said.

Education spokesman Gerry Cruz said the department already was "in the red" at the beginning of the school year because it had not received the full $165 million appropriation for fiscal 2005.

"We've been using 2006 funds to pay for our prior year obligations because we didn't get all of our budget for last fiscal year," Cruz said. "And we're not getting the full amount owed to us on a monthly basis, which makes it harder for us to keep up with all our obligations."

Felix Calvo, GPSS acting controller, said he's worried GPSS won't have money to pay the last of three pay periods this month or some of its vendors on time.

"We're concerned with the last payroll," Calvo told acting superintendent Kenneth Chargualaf, GPSS personnel administrator Luis Reyes and Sen. Larry Kasperbauer after a hearing yesterday. "We don't have the cash right now."

Education officials met with senators yesterday in what was scheduled as a continuation hearing on a bill that would incorporate GPSS financial operations into the Department of Administration. But the discussion focused instead on chronically short and late payments to GPSS even after senators created a direct funding system meant to cure that problem.

According to a new funding system, GPSS has a $160 million appropriation from the government's General Fund for fiscal 2006. But the monthly payments are based on 83.2 percent of the government's monthly collection of withholding tax -- an amount that varies from month to month.

Education officials said they're being frugal with spending because of fluctuating tax collections. And while education officials and senators are concerned with the current financial flow, the direct funding system will help ensure GPSS receives its full appropriation.

During the hearing Sen. Robert Klitzkie, R-Yigo, said he was not satisfied with the answers to his and other senators' questions about the less than 83.2 percent of the funding sent to GPSS. Lourdes Perez, DOA director, said this month's $3.4 million shortfall may have been "an oversight."

"We are trying our best because this is a new requirement," Perez said after the hearing. "Our intention is to comply with the law."

Perez said DOA on Monday sent the $3.4 million owed to GPSS, fulfilling its obligation to pay 83.2 percent of withholding taxes this month.

Calvo yesterday confirmed GPSS received the payment, which was sorely needed to pay out the $5.1 million for GPSS employees' paychecks this week.

That leaves the question of where the money for almost 4,000 education employees' last paycheck of December will come from.

'No payless paydays'

It's a dilemma that Calvo and Chargualaf are hoping to solve with the help of DOA and Bureau of Budget Management and Research officials.

Carlos Bordallo, BBMR director, and DOA's Perez said they have agreed to meet with education officials.

"We're working with DOE and there's still time, ... there will be no payless paydays," Bordallo said yesterday. "We're taking a look at what they have in the bank, we're going to work to make sure they have the money to meet payroll at the end of the month."

The school system has received about $31 million for the first three months of the fiscal year, which started Oct. 1.

But according to education officials, payroll for school teachers, staff and central office employees is more than $35 million for three months.

Calvo said each pay period is about $5 million. December has three pay periods, which totals more than $15 million for personnel.

Bordallo and Shawn Gumataotao from the governor's office both said GPSS should have known that it would have to save money to pay this month's three paychecks.

Gumataotao said whatever financial oversight GPSS officials have made, considering they are without a chief financial officer at this point, the governor "has dedicated the entire resource pool of the government to address this issue."



More Articles in December 2005