Budget Committee reviews $20M vendor debt and funding source concerns for 2026

The Guam Legislature's FY2026 Budget Hearing on May 5, 2025, highlighted significant financial challenges facing the government, particularly concerning accounts payable and funding for critical health projects. A budget of $3 million was allocated for fiscal year 2026, but discussions revealed ongoing issues with securing necessary funds for various projects, including those related to maternal and child health.

Key concerns were raised about the $20 million in accounts payable, with over $9 million of that amount overdue by more than 90 days. Legislators pressed for clarity on how the government plans to prioritize payments to vendors, especially in light of complaints regarding delays in supplies and pharmaceuticals that directly impact patient care. The administration acknowledged the cash flow difficulties and emphasized that payroll remains the top priority, complicating the ability to settle vendor debts.

The hearing also addressed the status of capital improvement projects (CIPs) funded under Public Law 36-107. Officials indicated that previous bids for these projects had failed to attract offers, prompting a need to revisit project scopes to make them more appealing to potential contractors. The urgency of these projects was underscored by the reliance on ARP funds, which are now largely exhausted.

Legislators expressed frustration over the lack of a clear plan to address the mounting payables and the potential consequences for service providers. The administration indicated that they are negotiating payment plans with vendors but acknowledged the challenges posed by limited cash reserves. The discussion underscored the critical need for a strategic approach to managing finances and ensuring that essential services are not disrupted.

As the hearing concluded, the urgency of addressing these financial issues was clear, with implications for both the health sector and the broader community. The administration's next steps will be closely monitored as stakeholders await a resolution to the pressing concerns raised during the session.