FY2012 REPORT OUT: Finances Improve for Second Year in a Row
“The government’s finances are much better than when we found them. We still have a ways to go, but we’re definitely on the right track. It took years to get the government into a financial hole, but it took only two short years to make major improvements. My thanks and appreciation to the men and women of GovGuam, who made sacrifices to make all of this happen.” — Governor Eddie Baza Calvo
Performeter score improves for second year in a row
A score of the government’s financial condition has gone up for the second year in a row. The annual Performeter on GovGuam’s finances improved to a score of 2.81 out of 10.00 for Fiscal Year 2012. To put this into perspective, Governor Calvo & Lt. Governor Tenorio took office after the first quarter of Fiscal Year 2011. The Performeter score that year (2.73) doubled from the previous year’s 1.27.
It should be noted that though this assessment is for FY2012, GovGuam is near the end of FY2013. The Governor expects that an assessment of the current state of GovGuam finances will be even better for this fiscal year.
Change in Net Assets improves again
One area of major improvement is in the comparison between the total net assets of the government against its total liabilities, which includes its long-term debt. Since FY2006, GovGuam has had more total liabilities than assets (including capital assets like buildings and land). There was a drastic improvement from FY2006 to FY2008 in this score, however, the deficit of assets against liabilities took a nose dive in FY2009, then another decrease in FY2010. The following year, when the Governor came to office, net assets improved 21.3%. Net assets improved again for a second year in a row by 2.6%, closing this deficit further.
This Change in Net Assets, as it is called, should not be confused with the deficit or surplus in the General Fund. The government’s net assets versus total liabilities provides an overall look at the government’s total financials. The General Fund is only a component of that total. The audit for Fiscal Year 2012 shows the first surplus in the General Fund in two decades.
Expenditures supported by more than enough revenues
Also for a second year in a row, the government’s expenses were funded by more than adequate revenues that came in. “GovGuam funded 100.4% of their current year expenses with current year revenues, which is considered an excellent percentage,” according to the Performeter.
Tax burden per capita
Total taxes per capita by the end of FY2012 was $3,831, a relatively high tax burden when compared with other insular governments. The increase from the previous year does not indicate higher taxes, since the tax rates have not changed.  It just means that more people are paying taxes.
Debt burden per capita
The FY2012 debt burden (per capita) also rose to $8,810, and increase of less than $600 from the previous year. This is calculated using the government’s long-term debt, which was $1.4 billion on September 30, 2012.
Percentage of debt to assets improves after bond financing, Calvo’s fiscal policies
To determine whether the refinancing bonds in Fiscal Year 2012 had an effect on total debt, the government looks at its percentage of debt to assets. The percentage in FY2012 was an unfavorable 113.3%, however, that percentage is unchanged from the prior year. As a matter of fact, it is an improvement from the year before the bond was floated, when the percentage was at 119.7%. This means that the refinancing of debt from short term obligations to long-term debt, along with other fiscal policies, had a positive impact on the government’s fiscal position.
Current ratio: more current assets than liabilities for first time
For the first time since this report has been filed, GovGuam has more current assets than current liabilities. In FY2006, GovGuam had only 15 cents in current assets to cover every $1 in current liabilities. That improved in FY2011 to 48 cents in current assets to cover every $1 in current liabilities. For FY2012, GovGuam had $1.10 in current assets to cover every $1 in current liabilities.
Cash situation improves eleven-fold
The government’s cash situation mirrors the drastic improvement in current assets over liabilities. In FY2011, GovGuam had 3 cents in the bank to pay every $1 of current liabilities. In FY2012, GovGuam improved this ratio eleven-fold, with 34 cents in cash and cash equivalents to pay every $1 of current liabilities. There still is a lot of room for improvement, however, this is drastically improved from every prior year.
Crawford & Associates, P.C.
Crawford & Associates, P.C. conducted the Performeter for the U.S. Department of the Interior and the Graduate School.

Skip to content