SHEFA response to OPA review

In response to an OPA “review”, the governing board explained in specific detail how SHEFA has been operated since its inception in Fall 2004, touting the program a model in fiscal restraint evidenced by the absence in program cost overrun and operational deficit and government-financed extravagance.

The board takes pride in being the first and only municipal scholarship program on Saipan and the CNMI without the luxury of government-provided vehicle; government-paid fuel and lubrication expenses; use of government cellular phone or Blackberry; overtime and fringe-benefit expenses; travel and travel related expenses for off island; off island training expenses; and other workplace extravagance.

Dedicating a substantial amount of program revenue directly on bona fide Saipan residents, the governing board has invested 97 percent of the SHEFA funding on postsecondary scholarships, related higher education assistance and college enhancement activities. This is evidenced in the board having reviewed and processed over 3,000 recipients, totaling slightly over $8,000,000 in awards since the program took off in Fall 2004 to date. The board incurred an average cost of less than $250 per month in board compensation or an average of less than $50 per member in the first three fiscal years of SHEFA.

As of Fall 2007, over 100 SHEFA scholars have attained their college degrees. A review conducted recently by OPA raised issue with SHEFA’s approach in outsourcing employment of civil servants. In response, the governing board holds the determinative decision whether its use of specialized expertise comports with SHEFA’s enabling statute and pertinent provision of law governing civil service, in addition to public policy and practice on procurement of services and the exemption specifically granted to the Legislature and the mayors in applicable statute. The board explained how the Saipan municipal postsecondary program has evolved under a compressed implementation timetable, which required proven expertise in program operation, policy guidance and related program implementation activities, policy and program development, among other skills and program development and management experiences.

In addition, hiring employees as opposed to outsourcing deliverables would not fare under the circumstances, even assuming the hiring of permanent staff is allowable, and considering such an approach in the most favorable light. The uncertainty and unpredictability in program funding in the past just as it has continued to the present, including the precarious fluidity of the program, would make the most elementary cost-benefit analysis in hiring fiscally imprudent. This point is best illustrated with contrasting differences in cost using an outsource model utilized by SHEFA compared to a so-called fiscal-prudent model between two post secondary programs, one catering to interisland students while the other stretching pittance resources in affording optimal services to students from the Municipality of Saipan.

Given the climate of uncertainty and unpredictability, it is most imprudent to hire fulltime staff during the formative period of program development. Besides, operation funds are inadequate to attract or recruit individuals best qualified to operate a new and evolving program. And even if the governing board had opted for the approach suggested, the board would have been prevented from the outset and deemed out of compliance with and barred by applicable statute governing fulltime employment.

With the highly compressed implementation schedule and unique circumstances the SHEFA program has been through, outsourcing remains the most fiscally prudent option available compared to the alternative offered in the review. This option make sense in terms of actual cost impact to the program detailed in the full text of the SHEFA response to OPA at www.saipanshefa.com.

The review further noted that contract timetable does not fit with traditional schedule; compensation schedule appear accelerated compared to traditional delivery schedule; and tasks repetitive.

What seemingly appears at first impression to be repetitive tasks upon closer scrutiny would readily prevail as a necessary antecedent in facilitating program growth, development, renewal and expansion, in order that SHEFA becomes a viable and sustainable program, just as any new and emerging program would require, no matter the modality of delivering—whether performed or ascribed by negotiated deliverables by the governing board or by the prescriptive and ministerial list of position description assigned a civil servant. For to engage in the latter proposition is by all accounts ill advised, given the uncertain beginning of and externally induced instability sown into the SHEFA program, not to mention the constant external tinkering which the SHEFA has been subjected to since 2006 to this day, and no less the overarching overtures of collapsing programs.

In its response to the accelerated progress and delivery, including contract progress payment item, the board pointed out that actual disbursement was not performed in accordance to the stipulated term in contract. To the contrary, the initial payment issue on one contract was nine months past the commencement date of contract; the subsequent payment 11 months past stipulated terms; and the remaining balance more almost 40 months past due and unpaid. The same situation is true with another contract. Though the first payment was issued almost two months from the commencement date of contract subsequent payments were not disbursed in four months as concluded in the review, but in seven months from the date of contract commencement. In fact, the full payment of this contract is 14 months behind scheduled and unpaid.

The SHEFA governing board maintains the position that it has and continues to operate the flagship municipal postsecondary assistance program in the interests and needs of college students and residents of the island of Saipan. As the first and only municipal higher education assistance program for Saipan, the SHEFA board and Mayor Juan Tudela are committed to a fair, impartial, responsive, sensible and responsible program, one which is in compliance with applicable provisions of statute and regulations.

Evidence of the responsibility with which the board has exercised its due diligence is seen over the fact that the program has not incurred cost overruns on both student assistance and program operation budget. So too has the SHEFA board amply demonstrated fiscal restraint by its explicit refusal to take advantage of publicly funded government perks and extravagances that fall within the meaning of public purpose. Instead, SHEFA has remained dedicated to and has in fact invested 97 percent of its funding on direct student assistance, only a pittance on operational expenses.

With an unprecedented level of accomplishment in a compressed timetable, the SHEFA board and Mayor Tudela have every reason to stand proud in embracing and joining forces with parents, college students and honorable founding fathers, supporters and friends of SHEFA in the Legislature and the greater community. For they deserve the credit for the over 100 SHEFA scholars who attained their college degrees on Saipan and abroad in areas of high priority need for Saipan in the field of education, accounting, nursing, hospitality, computer science, among others.

To be sure, SHEFA’s priority field list comports with OPA’s job study conducted last year. The only difference being that SHEFA has addressed the area of high workforce need for Saipan since Fall 2004, way before the understudy was initiated, and has worked on some of the recommendations advocated in the report.

In other words, the SHEFA board and Mayor Tudela have delivered on the mission of SHEFA “to invest the limited human capital resources of qualified residents of Saipan…in recognition of the need for educated citizenry and workforce on Saipan, with the broad expectation of SHEFA and assurance from…recipients to provide services on Saipan in the private sector, government, nongovernmental organizations…(and) not-for-profit organizations.”

For its part, the government board underscored the need for appropriate public policies to provide guidance, direction and govern the conduct of future “review” of government agencies to include but not limited to:

-required a “review” to ascertain appropriate content validation between and across programs in order to properly establish inter or intra agency program comparability relative to program delivery and/ or program effectiveness in part or in whole that is readily accessible in introductory text to research, program review checklist or standard evaluation procedure and process in order to raise the bar and standard of review above and beyond discretionary due diligence;

-Mandating reasonable opportunity for an entry briefing to all appropriate parties at a time, date and venue determined by the agency involved, and not at the discretion of the reviewing agency conducting the review;

-Requiring reasonable opportunity for an exit briefing to all appropriate affected parties at a time, date and venue as determined by the agency involved, and not at the discretion of the reviewing agency conducting the review.

-Requiring a reasonable opportunity to prepare and provide written response(s) in reference to information contained in a review during or before the conclusion of any review in part or in whole;

-establishing a mechanism that promotes fair and balanced discourse in the manner in which reports are prepared and disseminated without due notice to respondent(s) on a deadline mutually set by all parties involved in or affected by a “review”; and

-applying the Generally Accepted Protocols and Government Auditing Standards on any “review”.

More detail information on SHEFA’s response may be accessed by logging to the SHEFA website homepage at www.saipanshefa.com.

For specific information about the Saipan Higher Education Financial Assistance program may also be accessed by visiting selected menu options at the SHEFA website or direct electronic mail contact to the office 24/7 at contact@saipanshefa.com. Regular office hours are from 8am to 5pm, Monday to Friday. Otherwise, staff may be contacted directly at telephone number (670) 233-5995 or queries may be delivered through SHEFA’s facimile at (670) 233-5996. Due to time differences abroad, the SHEFA Office is equipped with retrievable voice messages and may be accessed at (670) 233-5995.

Application and support materials for Fall 2008 may be submitted in person or online (electronically) to SHEFA before or on July 1, 2008. Downloads forms and pertinent SHEFA materials may be accessed via the website by logging to “Document, Regulation and Law” menu.