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Committee hears that Homeland Security federal grants were written off; substitute budget adds local funding
Summary
Officials told the Committee of the Whole that auditors wrote off about $6.5 billion in federal Homeland Security grant receivables as uncollectible and that FEMA reimbursements are uncertain after staff turnover, prompting inclusion of local funding in the substitute FY27 budget to preserve operations.
Officials told the Guam Legislature’s Committee of the Whole that auditors have written off a large receivable tied to Homeland Security and the Office of Civil Defense, and the substitute version of the FY27 budget includes local support because federal reimbursement appears unlikely.
"The federal funds are not going to be coming," Guerrero said, summarizing the administration's position and explaining why the substitute bill includes a local appropriation for Homeland Security operations and Emergency Operations Center staffing. He said the FY24 audit flagged the receivable and that auditors wrote off roughly $6.5 billion in federal grants as uncollectible.
Guerrero and other administration staff said a corrective action plan intended to restore FEMA confidence was paused after a mass exodus of FEMA personnel about a year and a half ago, delaying on-site reviews that could have led to reimbursements. "We were working on a corrective action plan, and then there was just a mass exodus of FEMA folks," Guerrero said.
Committee members pressed for clarity on whether any portion of the receivable might still be recovered. Administration staff said some supporting documents are available should FEMA return, but there is no firm date for FEMA review and the expectation of near-term reimbursement is low.
The substitute budget therefore includes baseline operational funding—described by officials as bare-bones—to keep the EOC and related functions staffed while the administration continues efforts to pursue any possible federal recovery.
The committee did not take a formal vote on this topic during the session. Staff offered to provide additional documentation and to continue discussions about corrective actions and records that could support future FEMA audits.
What's next: Officials promised to follow up with further documentation about the audit write-off and the corrective action plan; the committee recessed without resolving reimbursement prospects.
