Outdated: Guam Customs agency languishing in the paper world

 Import-export documents stashed in 5,000 cardboard boxes

 By Pacific Island Times News Staff

Despite the government’s push for digitalization, the Guam Customs and Quarantine Agency still uses a manual filing system and relies heavily on “paper-intensive” submissions for cargo documentation.

“All entry documents—such as bills of lading, invoices, packing lists, manifests, and other documents processed by CQA—are filed and stored in more than 5,000 cardboard boxes,” Public Auditor Benjamin Cruz said in a press statement.

“This manual filing system prevents CQA from providing real-time or pre-arrival information; performing or providing detailed analysis and assessments of goods; accounting for commodities; or reporting information in a timely manner," he added.

As a result, Cruz said, the OPA could not complete its analysis of the volume of alcoholic beverages imported and exported through Guam’s freight facilities.

“We could not conclude with reasonable assurance the accuracy of our analysis,” the public auditor said.

Auditors found that the agency operates on more-than-two-decades-old standard operating procedures, which require officers to accept paper

documents and use manual filing systems.

"Paper documents are then placed in file trays or inboxes for review and eventually filed in cardboard boxes that are stored at the CQA Records Management Warehouse Facility,” Cruz said.

He said the agency's management confirmed that the last SOP update for the air cargo section was dated October 2003, and for the maritime section, September 2003. 

"The SOPs have not been officially updated to completion as a result of staff

 shortages that require supervisors to assist in regular operations or supervisors being switched between the two facilities," Cruz said.

The OPA found that the CQA does not have an automated infrastructure

to accept or process electronic manifests as mandated.

Cruz said Customs officials have confirmed that without an automated

system, digging for the information requested by auditors would require the "mobilization of several customs officers who assist in the effort of retrieving the cardboard boxes over several weeks at a time,” Cruz said.

After fetching the paper documents—specifically those processed between January 2021 and December 2022—the agency would need additional resources to scan and transcribe them.

He said available records do not disclose the actual volume of imported 

and exported alcoholic beverages, impeding the auditors’ ability to calculate excise tax revenues due to the government of Guam. 

“There is neither a requirement in law nor in Department of Revenue and Taxation policy for CQA to report volumes of imported or exported alcoholic beverages to DRT," the public auditor said.

"There is no mechanism in place to track and analyze disaggregated data of volumes of imported and exported alcoholic beverages to determine total

 taxes due to GovGuam,” Cruz added.

To improve data collection, tracking and reporting for imports and exports, the OPA recommended that the agency update its SOPs for the maritime and air cargo sections and implement an automated system for manifest transmittal.

The OPA also urged the Customs office to develop a coordinated procedure with the Department of Revenue and Taxation to facilitate the reconciliation of taxable imported

and exported goods processed at Guam’s facilities.

The OPA also reiterated its earlier recommendation for the legislature to consider repealing the law that permits the delay of tax assessments and further recommended that all excise taxes shall be assessed and paid upon processing the imported products at all points of entry.

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