Money Woes

June 30, 2010

The Fitial Administration warned government employees that they "better be prepared for payless payday than have false hopes." If paychecks aren't issued tomorrow then they won't be issued until Tuesday July 6th because of the fourth of July holiday.

The CNMI government has been borrowing money from the Commonwealth Development Authority to cover payroll and purchase fuel for the CUC.  Yesterday the governor signd a law allowing allowing the Marianas Public Land Trust to earmark and appropriate $4 million  to the general fund $4 million in advance interest payment to be used for CUC.

Meanwhile the Office of the Public Auditor reported that not one government agency recovered any of the $6.3 million in misspent funds reported in June 2009.  From the Saipan Tribune:
Of the $6.3 million in misspent public funds, $2.6 million was referred to the Office of the Attorney General for legal action.

The recovery of the remaining $3.7 million depends on government agencies such as the Commonwealth Ports Authority, the Department of Labor, and the predecessor of the Department of Public Lands - the Marianas Public Lands Authority.

The misspending of these taxpayers' money dates as far back as 1995, and several audit reports on these misspending have since been issued.

They include overpayment to contractors, improper payment to former government officials, improper use of funds by officials, uncollected public land rentals from quarry operators, and uncollected fees from employers with alien workers.
Individuals are also requesting that OPA investigate abuses at PSS including "including wasteful use of public funds, allowing outsiders to use PSS funds for travel, and questionable credit card use." From the Saipan Tribune:
OPA was also told that Education Commissioner Dr. Rita A. Sablan's approval to reimburse travel collections merits an investigation.

Ditto the use of PSS credit cards in paying for food in leadership meetings as well as expenses incurred by PSS leaders during off-island meetings.

The same investigation request alleged that travel funds were also being abused by allowing some individuals “outside” of PSS and the Board the of Education to travel using PSS' indirect cost funds.

The indirect cost funds are also reportedly used to pay for hotel room rentals, but with invoices for food and snacks.

The OPA was also asked to look into the wasteful use of PSS funds and federal monies in the printing of colorful monthly newsletters, quarterly magazines, and other pamphlets charged to federal agencies.

The purchase order and travel authorization issued by PSS for religion purposes is also prohibited under the use of federal monies and OPA is being urged to check these transactions.

OPA was also asked to look into the hiring of a new finance director for PSS, despite the lack of certification by the Fiscal and Budget Office.
It was also reported that the CNMI's government tourist agency, the Marianas Visitors Authority owes travel firms over $2 million. The travel and tourism agencies are located in the CNMI and in countries that Japan, Russia, Korea and China. That can't be good for increasing tourism upon which the economy is dependent. From the Saipan Tribune:
Palacios said the lack of money coming MVA's way has resulted in “a little over $1 million in outstanding contractual obligations” to travel agencies in four countries and those in the CNMI.

He said these agencies help promote the CNMI as a tourism destination, and help bring tourists to come to the CNMI.

“It's bad enough that our tourism is down, and now we owe money to those offshore and on island firms helping to bring tourists to the CNMI. We should be thankful that these companies are still willing to promote the CNMI despite not getting paid,” Palacios told Saipan Tribune.

Visitor arrivals have been on a yearly decline since at least 2005 when Japan Airlines pulled out from the CNMI. JAL was bringing in tourists from the CNMI's main tourism market of Japan.

Tebuteb said the CNMI cannot afford to lose these travel agency partners, considering that the only industry in the CNMI is tourism, after the garment industry pulled out early last year.

“The issue of MVA's lack of funding and the outstanding obligations to offshore and on-island agencies is serious. This will affect the image of MVA and the CNMI,” Tebuteb said.
Tourism is already in a decline with only a 50% occupancy rate reported for the month of May 2010.

It seems that here is no department or agency that isn't affected by the CNMI's fiscal crash. CHC is claiming that their problems with non-compliance with enters for Medicare and Medicaid Services regulations is largely due to lack of funds.

Where is a plan to cut spending or increase revenue through taxes or other means?

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