By Gerardo R. Partido
Variety News Staff

AS OF Sept. 30, 2006, various Government of Guam agencies owe the Guam Power Authority $34.7 million, the Office of the Public Auditor reported yesterday.
The GovGuam debt is broken down as follows: the Guam Public School System, $13.2 million; the Department of Public Works, $10.9 million for its streetlights; the Guam Waterworks Authority, $9.8 million; and the Guam Memorial Hospital, $759,724.
OPA said for the last several years, independent auditors have expressed significant uncertainty over the “collectability” of the more than $30 million in GovGuam receivables.
Payment of the receivables has been made dependent on appropriations from the general fund or GovGuam’s issuance of bonds.
But only last month, Standard & Poor’s placed GovGuam on a credit watch with negative implications and indicated that GovGuam has a “liquidity crisis.”
According to OPA, the DPW money was used mainly for power services provided to public streetlights from 1999 to 2003 and DPW has not made any payments on the note.
GPA has been trying to collect this debt because according to its bond covenants, “electric power should not be provided to any entity free of charge.”
To date, OPA said the DPW receivables are “significantly delinquent” and questions as to the legality of the note have risen.
For the first time, too, OPA said independent auditors have identified the DPW receivables as a material weakness because this has constrained the utility’s cash flow.
As a result, GPA has been required to borrow on the commercial paper market to make up for the shortfall.