OPA says Retirement Fund records ‘accurate’

The NMI Retirement Fund’s financial records are “accurate and fairly presented,” a report from the Office of the Public Auditor said.

The OPA report also said the NMIRF “received a clean opinion on its financial statements for fiscal year 2013.”

The report, however, said that the NMIRF “did not comply with certain laws, regulations, contracts, and grant agreements which may affect its financial records.”

“This is the third consecutive year that NMIRF has received a clean opinion on its financial statements, but did not comply with certain applicable requirements,” the OPA said.

The OPA explained that audit findings generally occur when an auditor discovers weaknesses in internal control, or noncompliance with requirements of laws, regulations, contracts, and grant agreements.

For fiscal year, the auditor cited NMIRF for one finding, which is a decrease from four findings in fiscal year 2012.

“These findings resulted from weaknesses in the procedures that allow management or employees to prevent, or detect and correct, noncompliance with a requirement of a federal program or misstatement of financial records on a timely basis,” the report said.

Financial highlights

According to the OPA report, NMIRF net assets held in trust for pension benefits as of Sept. 30, 2013 and 2012 were $132,299,337 and $242,483,716, respectively, a decrease of $110,184,379 or 45 percent from fiscal year 2012.

The report said the decline in net assets is due to draw down from investment to fund benefit and refund payments.

Total additions, as reflected in the Statements of Changes in Plan Net Assets Available for Benefits, were $21,710,414 and $60,945,899 for the years ended Sept. 30, 2013 and 2012, respectively.

Total additions decreased by $39,235,485 or 64 percent compared to 2012, due primarily to the $15,307,839 decrease in net investment income and $23,333,891 decrease in contributions.

Value of investments at market value declined from $218,069,145 in 2012 to $128,308,882 in 2013, primarily due to withdrawal from the investment portfolio to fund the benefit payments and refund of member contributions.

Total deductions, as reflected in the Statements of Changes in Plan Net Assets Available for Benefits, were $131,894,794 and $106,901,446 for the years ended Sept. 30, 2013 and 2012, respectively.

The 23-percent increase to $24,993,344 in 2013 compared to 2012 is primarily due to the $50,411,923 increase in refund offset by $22,575,380 decrease in provision for uncollectible contributions.

As of Sept. 30, 2013, 2012, and 2011, the Fund’s net assets available for pension benefits were $132,299,337, $242,483,716 and $288,439,263, respectively, the report further said.

Cash and cash equivalents increased by $21,339,024. This is from the draw down from investment to payoff refund for members who elected to withdraw their contribution from the Fund.

Receivables from employers and related unearned revenues increased by $1,670,663 or a 23 percent increase. The CNMI government and autonomous agencies continue to contribute less than the actuarially determined rate. Investments decreased by $89,765,263 due to the drawdowns authorized for the payment of refunds and benefits.