Finance bats for improved procedures

The CNMI Department of Finance has included in its fiscal year 2019 budget proposal to include new systems in order for them to improve inventory, collection, and other financial procedures.

The proposal, led by Finance Secretary Larrisa Larson, is in connection with the recent independent auditor’s report by Doloitte & Touche LLC to the CNMI government, where it showed it cut down the deficit to more than half between FY 2016 and 2017.

Larson said they hope to implement new procedures that would process documents more efficiently with the less manpower involved. “And to maintain records to include information such as federal award identification number, source of the property, title, percentage of federal participation, and use and condition of the property.”

“The goal is a more efficient government and we are one step closer to getting there. This will improve the time and effort needed for central government to reconcile records with program managers because a physical inventory of FY 2017 will be coordinated with [said] program manager, and Division of Procurement and Supply to address the finding.”

She added establishing a cash management plan consolidated their policies and procedures for FY 2017 and it helped their department to sustain their efforts of improving compliance as seen in the 2017 audit report.

Larson said the casino and gaming industry continues to be a factor in the economic progress the CNMI is experiencing now with the Saipan Amusement Fund having an excess revenue of $16.7 over expenditures at the end of 2017 compared to audit findings for FY 2015 and 2016.

“We continue toward FY 2019 with a positive outlook, yet we remain conservative as FY 2018 presents areas where we must remain diligent and responsive to changes in the overall economy,” Larson added.

“As it currently stands, the Consolidated Natural Resources Act, will greatly reduced workforce in 2019. The CNMI government, alongside the private sector, has made great progress in addressing the need to increase the labor pool. The CNMI is optimistic that the recent economic and social progress will continue for the island residents.”

She said the government cutting the deficit by more than half continues to showcase the CNMI’s financial status’ dramatic improvement in key areas. “The improvement of our net position is an indicator of a government’s financial position—its financial standing at a given point in time.”

“Financial position can be tracked overtime to assess whether a government’s financial health is improving or deteriorating. In other words, it means our deficit decreased by a historical percentage because of this administration’s commitment to bettering our financial position for our children and the future,” she added.

The CNMI has spent close to $374.9 million for its government activities that includes payments made to various autonomous agencies like the Commonwealth Healthcare Corp. the Commonwealth Utilities Corp., and the Marianas Visitors Authority.

Program revenues ($147.6 million), general revenues ($297.5 million), and other transfers ($1.5 million) were the source of funds of the said expenses. The CNMI earned a total of $446.7 million from total revenues, less expense of $374.9 million for a net deficit of $71.8 million or 53.7 percent.

The CNMI’s deficit is down to $61,910,563 for FY 2017 from a high of $133,746,720 in 2016. The CNMI has improved its net position by 53.7 percent or $71,835,707 based on the independent auditor’s report by Deloitte & Touche LLC on the CNMI government’s financial statements—revenues, expenditures, and deficit spending.

Gov. Ralph DLG Torres said the improving economy and financial reforms introduced where instrumental in the CNMI’s recovery aside from adopting new accounting standards since FY 2016, and a corrective action plan.

“This report is not just a display of our ongoing process of improving our collections and implementing standards throughout our government, but it demonstrates our continual commitment to bring down the deficit and put the CNMI in a better place financially for the future,” said Torres.

The corrective action plan has reflected the need for oversight to all government agencies that must submit their own financial statements to the central government.

“This was the leading factor in our report and it is important that we continue working together to continue this progress. The work is not done. We’re just getting started,” added Torres.