What rules govern lapsed funds at the Legislature?

by Ken Wetmore, KUAM News
Monday, January 17, 2005

By law the Governor of Guam is required to report to the Guam Legislature all lapsed funds from the Executive Branch at the end of the fiscal year. The idea behind the legislation was to use the unspent money to help pay for increments long overdue to many Government of Guam employees. Today Speaker Mark Forbes received a letter from Governor Felix Camacho stating a preliminary report indicates the island's public sector had about $7.3 million in lapses last fiscal year.

So while the Governor is being help accountable by the Legislature for lapsed funds and how they're spent - who's holding the Legislature accountable for their lapsed funds? You can - using documents obtained from Legislature showing lapsed funds, we let you make the decision about lapsed funds there.

As the 27th Guam Legislature left office they left more than $1.3 million in unspent budgeted money. So what happens to that money? Quite simply, it's rolled over. Senators that are returning to the 28th Guam Legislature get to tack the money they saved in the past onto their current budget. Senators who didn't win a seat in the 28th can transfer their lapses to other senators.

Democrat senator Lou Leon Guerrero received the most in lapsed fund transfers. Through transfers from former speaker Ben Pangelinan and former senator Toni Sanford, Senator Leon Guerrero wound up coming into the 28th Legislature with an over half-million dollar nest egg to supplement her minority member budget. I asked her what she was planning on doing with the money, to which she replied, "Well, certainly the monies that were given to me were given to me also in request to keep on the legislative staff of those various offices; not all the legislative staff but those people that would be able to be funded for a two-year term."

Senator Leon Guerrero says the practice is common and is done by both Democrats and Republicans alike, and says it allows outgoing senators to contribute to helping push their political agendas. While Senator Leon Guerrero received the majority of her lapsed funds from outgoing senators, the lawmaker with the next highest amount in lapsed funds going into the 28th Legislature is veteran policymaker Senator Frank Aguon, Jr., who saved all but $12,000 of the more than quarter-million dollars he has in lapsed funds.

Last year KUAM News reported the then-Vice-Speaker and oversight chairman for the Legislature's Office of Finance and Budgeting was using the OFB's more than half-million dollar budget to pay for most of his senatorial expenses, even expenses relating to his office. We were told by then Rules Committee chair Senator Leon Guerrero that OFB monies were supposed to only be used for OFB purposes.

When asked if he was able to retain so much money because he lived off the Office of Finance and Budget, Senator Aguon said, "I think what I did was I made decisions that expended a good majority of the resources within the Office of Finance and Budget, which by the way entailed about 70-75% of all the activities I had in the previous legislature, so I was able to try to offset and expend most of the resources within the Office of Finance and Budget.

He said such a strategy saved his office's budget, adding, "and I realized some lapses coming into this fiscal year." He replied, "As a matter of fact you can say I properly budgeted accordingly," when asked if this was done intentionally. But when asked if he did it on purpose so he could have these types of lapses for himself, the senator said, "Well, that is certainly a possibility and I recognize that as a fact."

While the practice of rolling over lapsed funds at the Legislature has been a tradition for many legislatures, Speaker Forbes says he's having second thoughts about the practice. "My thinking on this subject is I don't know if its right for the Legislature to carry lapses at all," he pronounced. "And I'm not just talking about individual senators but the entire body. The more that I think about this issue the more that I think that at the end of the fiscal year any lapses that the legislature generates ought to just revert to the General Fund."

So will senators agree with Speaker Forbes that lapsed funds from their offices ought to revert to the General Fund at the end of the fiscal year to be used in areas that need extra funding? Most we spoke with today sounded dubious at best. Some, such as Senator Bob Klitzkie, who is in the process of trying to donate his nearly $182,000 in lapsed funds to the Public School Library Resources Fund, pointed out there would then be no incentive to save. "I could live with both but its human nature that there's greater incentive to save," he said in earnest. "If you can put your savings to what you think is a good use and I think putting funds that I saved into the Public School Library Resources Fund is a very good use of the money I save by being frugal."

Another obvious question is if senators are able to save so much money are they over-budgeted. None of the senators I spoke with today were ready to say that.

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