CUC’s Sablan agrees with OPA recommendations

A Commonwealth Utilities Corp. board member has agreed to the audit done by the CNMI Office of the Public Auditor last month recommending that the utilities company’s corporate structure be overhauled.

CUC board director David Sablan Jr. told Saipan Tribune Monday that he agrees with the audit done by the OPA, recommending a revision in CUC’s corporate structure, effectively replacing key positions such as board members.

In the OPA audit, it was indicated that both the past and present CUC board are too involved with the management of CUC. Sablan believes the statement to be true, claiming that the CUC board is “micro-managing.”

“That should not be the case; we are policymakers—we provide direction for our management and right now, there is nothing the majority of the board views that prevents them from going into CUC and advising and telling our managers what needs to be done,” he said.

Sablan said the board must only be limited to communicating with CUC management at the executive level, including positions such as the CUC executive director, CUC legal counsel, and the CUC chief financial officer.

Sablan explained that under CNMI law, Antonio Castro is the financial controller, an executive that reports directly to CUC executive director Gary Camacho. Sablan believes that CNMI law must be amended to include a CUC CFO instead of a financial controller reporting directly to the executive director.

“I do believe that we need to look at our organizational structure to try and make it more efficient in terms of communications and in terms of operational direction,” said Sablan.

The CUC board has been receiving criticism over its inefficiency since its birth in 1985. Sablan brings up an issue of qualification, as he believes that there should be a certain extent of technical and engineering knowledge for CUC to be properly managed.

“What is also important is that we have qualified people in these positions in order to accomplish our objectives, which is to provide the least cost utilities services to the people of the CNMI and to provide it at the most efficient form of service,” said Sablan.

“I think there needs to be a review of the structure on how it is currently being managed at both the board level and the management level.”

Sablan wishes that CUC board members have skills in finance, management, communication, and engineering “because of the technical aspect of the utility system [in place].”

“Right now, we do not have that capability at the board level,” he said.

CUC’s response to the OPA is an extension
The CUC response to the OPA audit has yet to be submitted. According to an earlier interview with executive director Gary Camacho, CUC would be making a request to extend the deadline for their response, a deadline that has expired since last Sunday.

In the OPA audit to CUC, the corporation was given 30 days to submit their response. Failure to do so would result in the OPA publishing their final report without the response of CUC, an incident that is reminiscent to past OPA audits. The draft audit was received by CUC last March 17.

According to Sablan, OPA audits that are published without the responses of CUC is usually damaging for the corporation.

“There has been an instance in the past where the OPA has requested for responses and when those responses was given, they have finalized their audit which was not so favorable to CUC,” said Sablan.

CUC’s previous OPA audit, which was done back in 2015, looked at how CUC board members at the time were travelling, and even deemed it as “non-compliant with the law.”

A letter signed by Public Auditor David Pai back in 2015 informed CUC of violating its own travel policy and that the OPA requests a certain action plan within a specific amount of time. CUC has failed to do so back then.

“It seemed like to them, they were ignored,” recalled Sablan on the incident.

OPA then went on to publish their audit and CUC was given an unfavorable report.