BOE: Deal to absorb PSS’ power bills still in draft form

Board of Education chair Marylou S. Ada disclosed to Saipan Tribune that the Memorandum of Agreement with the central government and the Commonwealth Utilities Corp. is far from being finalized because everything is still in draft form.

The proposed MOA pertains to the Public School System’s unpaid power bills, which is expected to absorbed by the administration to offset the “rollover” funds incurred last fiscal year.

The issue was among the issues tackled by the board during its more than two-hour executive session held last Thursday.

Ada, after the closed-door meeting, refused to disclose further details of the agreement pending final decision.

“It [MOA] is still being routed and … is not finalized. Yes, the intention of MOA is to absorb the $1.7 million that we owe CUC,” she told Saipan Tribune after emerging from the closed-door meeting, adding that she is not at liberty to say anything on the proposal because everything is in draft stage.

Saipan Tribune learned that PSS incurred $3 million in debt from CUC representing unpaid bills in many months. Of the figure, $1.7 million was absorbed by the central government in acknowledging that it failed to remit the PSS budget allotments last fiscal year.

CUC officials earlier said that PSS will shoulder the $1.3 million which is expected to be fulfilled in the next 12 months.

CUC earlier rejected the MOA proposed by PSS and the administration citing the lack of “concrete payment schedule” for the absorbed obligation.

As of Sept. 30 this year, CUC disclosed that the central government and PSS topped the list of accounts with huge unpaid obligations resulting to the agency’s shortfall.

The central government has an outstanding debt of $2.4 million, while PSS incurred $3.6 million in unpaid obligation as of end of FY 2011. With the $50,000 recently paid by the central government, PSS obligation was reduced to $3.1 million.

PSS disclosed that the central government owed the system over $3 million which represents unpaid personnel allotments for fiscal year 2011. This is categorized as “rollover” funds that could help PSS in its financial needs this fiscal year 2012.

In fiscal year 2011, public schools were originally appropriated $32 million but was reduced to about $28 million following an across-the-board budget reduction in all government agencies and departments. PSS only received about $25 million for its personnel and operations.