Guam Nonprofits Struggle As They Wait For Government Pay

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January 6, 2011; Source: | Hundreds of the elderly, patients with disabilities, and runaway children are at risk in Guam because the island's government can't pay the more than $1 million it owes to nonprofit agencies.

Catholic Charities, one of the agencies that the government contracts with, says it hasn't been paid $1.5 million for services between October and December. "We have approximately 200 employees covered by most of the government contracts," said Diana Calvo, executive director for Catholic Social Service, "The numbers of clients per program varies, but in total we serve about 500 to 600 clients. "With support from the Archdiocese and donations from residents of the U.S. territory, Catholic Charities has been able to keep paying its employees.

Sanctuary Inc., a community-based agency that serves youth in need of a safe place or counseling, is worried that if the government doesn’t reimburse it soon it might be forced to close. "My greatest fear is that we may not be able to continue. We've exhausted our line of credit," said Millie Lujan, interim executive director of Sanctuary, which is owed about $107,000.

Government officials blame the problem on a dip in revenues, leaving it short of cash. Complicating matters, the government doesn't know fully how much it owes nonprofits. One official says the administration is currently working on assessing the government's liabilities.

Catholic Charities' Calvo hopes a solution comes quickly. "While the cost for food, gasoline and everything is going up, our contracts have not changed – so we're absorbing increased costs within our total contract amount . . . if we choose to terminate services or nonpayment . . . the government would have to provide those services but also absorb all of the increased costs associated with those services."—Bruce Trachtenberg