(May 7, 2012 – Hagåtña)  The Office of the Public Accountability
should audit the Qualifying Certificate (QC) Program for what may be
an overly generous loss of tax revenue. That is what Vice Speaker
Benjamin J.F. Cruz told Public Auditor Doris Flores Brooks in a letter
today, citing a 2001 report by the Department of Interior Office of
the Inspector General stating GEDA recommended approval of QC’s with
“unnecessarily generous” tax benefits.

This report authored by the U.S. Department of the Interior – Office
of the Inspector General found among other things:

•       That “the Government of Guam lost tax revenues of at least $769,650
and could lose future tax revenues totaling about $70.8 million
because the Authority recommended the approval of Qualifying
Certificates with unnecessarily generous tax benefits to hotel and
tourist industry firms that may not have needed the level of tax
benefits given”; and

•       “Gross receipts taxes of more than $5 million and an undetermined
amount of use taxes were abated improperly and without verification of
the amount or eligibility.”

•       “Legally mandated investments in Guam’s economy totaling at least
$2.3 million may not have taken place because the Authority did not
include language in Qualifying Certificates requiring beneficiaries to
reinvest tax benefits and, for those Certificates that included the
reinvestment requirement, did not monitor the beneficiaries’
compliance.”

“In light of these austere times, our government must reassess not
only its essential functions but the various tax incentives we
continue to provide to select island businesses,” Cruz wrote the
letter sent to Public Auditor Brooks this morning.

Cruz wants Brooks to do a follow-up audit of the federal report. He
said that a current audit could measure the effectiveness of this
program, the extent of the revenue losses we may be experiencing, and
the manner in which QC requirements are enforced.

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For more information please contact Carlo Branch at 477-2520.

Cruz: Electronic Billing Investment at GMH Could
Save Hospital $1.5 Million Every Year

(May 6th, 2012 – Hagåtña) The Guam Memorial Hospital loses approximately $1.5 million each year because of faulty billing documentation—and it does not need to. This is the sentiment expressed by Vice Speaker Benjamin J.F. Cruz in a letter sent to Interim Hospital Administrator Rey Vega.

The letter comes as a result of an April 30th oversight hearing on GMH, in which Cruz questioned the causes behind the hospital’s $77 million “provision for bad debts.” While rejected billing caused by a lack of documentation accounts for just 1-2% of this total amount, it means $1.5 million in real cash. “GMH could avoid this continuing revenue bleed by investing in both an updated pharmaceutical billing system and computer terminals for physicians,” Cruz wrote.

Vice Speaker Cruz is also seeking a detailed cost analysis of the required investments in the hope of aiding the hospital in its upcoming 2012 budget discussions. “Government can cut costs without putting families out of work and on welfare—we just have to be committed to that
goal,” Cruz Said

According to the Office of Public Accountability, for Fiscal Year 2011, the Guam Memorial Hospital Authority had its largest loss in over a decade

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For more information, contact Carlo Branch at 687-7567.

Cruz: Reduced lighting costs in public schools could be achieved
through local businesses

(April 29, 2012 – Hagåtña)  Energy efficient lighting can reduce
school monthly utility costs through partnerships with local
businesses. In a letter sent Friday afternoon, Vice Speaker Benjamin
J.F. Cruz told Governor Eddie Baza Calvo that there are local
businesses that can finance the replacement of school light bulbs with
more energy efficient and longer-lived ones by using a portion of the
monthly utility savings.

“There are a number of businesses on Guam that have helped other local
businesses save in utility costs by replacing fluorescent fixtures
with more energy-efficient and longer lived LED tubes,” Cruz wrote.
“And they are using a portion of the savings to finance the
replacement of lighting fixtures. The net result is a reduction in
overall monthly costs to the business.”

The Vice Speaker told the governor that if he would assist the
Department of Education, possibly through the Guam Energy Office, to
conduct a lighting fixture inventory of the island’s schools, he would
work on legislation authorizing the department to enter into these
types of contractual arrangements.

For Fiscal Year 2011, the Department of Education spent $12.4 million
for electrical utility services. For the current fiscal year, it is
authorized to spend $13.6 million. In the executive budget the
governor submitted for Fiscal Year 2013 in January, he asked to budget
$14.3 million in electrical utility costs.

A recent evaluation of the Legislature’s building found that lighting
represents about 8 percent of the Legislature’s total monthly power
bill. If we were to assume that the Department of Education used
similar light fixtures as the Legislature, 8 percent of the
department’s electric utility cost would equate to about $1.1 million
in annual lighting costs. Cruz believes this amount could be reduced
in half by replacing the tubes.
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For more information please contact Carlos B. Pangelinan at 477-2520
or carlos.pangelinan@senatorbjcruz.com.