$4.5M loss draws questions about food stamp program

Department of Community and Cultural Affairs Secretary Melvin Faisao tried to deflect flak from the CNMI’s loss of $4.5 million in food stamp money by saying it was being reserved for an electronic benefit transfer system-which the Commonwealth does not have-but this only added fire to criticism that the Fitial administration not only kept the de-obligated funds under wraps for years but also shows DCCA’s failure to improve its system to avail of the money given by the U.S. Department of Agriculture.

DCCA knew since fiscal year 2008 when USDA did a program review that the CNMI’s food stamp program “infrastructure was inadequate to implement such a comprehensive system” or EBT system.

As a result, DCCA could not use the $4.5 million for what Faisao said was “reserved and earmarked” for the EBT system.

Just the same, Faisao said “DCCA did not fail to use the said funding.”

Faisao, in responding to media inquiries on the matter, said the CNMI Nutrition Assistance Program under DCCA and American Samoa are “working on an appropriate eligibility system that would improve our delivery systems to our clients.”

“This project is ongoing, and we hope would come to fruition in the near future,” Faisao added.

He had asked USDA to “obligate back” the $4.5 million to the CNMI, particularly for the EBT system project and emergency food assistance for victims of disasters. Faisao asked this even though the CNMI does not have an electronic benefit system yet in place but is still working on one.

He had also said that USDA’s action to de-obligate the money contradicts Public Law 95-348, which he said allows funds made available to the CNMI under grant-in-aid by Section 502 of the Covenant to remain “available until expended.”

“This means that the Northern Mariana Islands could keep the funds until expended,” he said.

‘Wrong’

Delegate Gregorio Kilili Sablan (Ind-MP) said yesterday that Faisao is “wrong” in his request to the U.S. Food and Nutrition Service. He was referring to Faisao’s request to obligate back the $4.5 million.

Sablan said this is because Public Law 96-597, providing the Secretary of Agriculture authority to extend Agriculture programs to the CNMI “takes precedence over the more general language in 48 USC 1841(d)(2), which says funds remain available until expended.”

“Moreover, the memorandum of understanding, which the governor and Buckingham and Faisao all signed off on, agrees that ‘fiscal appropriations for one year may not be applied to expenditures for another year,’” Sablan added.

‘Not food stamp money’

Faisao clarified that the administration has never returned any food stamp benefit money to USDA.

“All benefit funds are expended accordingly to our clients. This money [$4.5 million] was reserved and earmarked for EBRT for several years. Grantor agency and NAP have the understanding that it would be used (obligated) when our infrastructure is adequate,” Faisao said.

Just the same, lawmakers questioned DCCA’s inability to comply with federal requirements to avail of the $4.5 million.

They said if Faisao or the Fitial administration knew that the CNMI food stamp program’s infrastructure is “inadequate” to be able to avail of the $4.5 million, they should have worked harder to improve the system at a time when there’s a food stamp waiting list and food benefits are being cut.

‘Go SNAP’

Lawmakers also renewed calls for the Fitial administration to start transitioning the CNMI into the national food stamp program, which could mean $12 million to $24 million in economic benefits.

The Fitial administration’s main reason for opposing the national food stamp program is the requirement that 50 percent of the administrative cost should be shouldered by the CNMI government.

Senate President Paul Manglona (Ind-Rota) said it does not make sense that the administration is worried about spending $500,000 to $700,000 in administrative costs in exchange for $10 million to $20 million more in food stamp funding for the CNMI and up to $24 million in local economic activities.

Manglona also said it does not make sense when the administration kept under wraps the fact that it lost $4.5 million the past few years.

Senate Vice President Jude Hofschneider (R-Tinian) said “it’s a shame” to lose $4.5 million in federal funds at a time of financial difficulties.

“DCCA needs to explain to the public why we had to lose $4.5 million. What kind of message are we trying to send the federal agency giving that money to us only to take it back because we didn’t use it? It’s ironic that the administration is concerned about paying some half a million in administrative costs [for food stamp] when all the while it has already lost $4.5 million. That needs to be explained to the public,” he told Saipan Tribune.

Rep. Ray Yumul (R-Saipan) said Sablan “said it well” when he expressed his disappointment over the loss of $4.5 million in funding.

“It’s frustrating,” he said.

Manglona also said the Senate will be calling back DCCA’s Faisao, former Finance secretary Robert Schrack and other involved parties to discuss the food stamp program and inclusion in the national food stamp program or the Supplemental Nutrition Assistance Program, SNAP.

He reiterated his call for House members to pass a Senate bill getting the CNMI food stamp program under the national program, which he said does not limit the number of food stamp beneficiaries and therefore no waiting list, among other things, as long as people qualify for such a program.

That bill has been pending in the House for months.

“It is frustrating when you know that it’s going to benefit people and we’re not doing anything.What are we waiting for? There’s no advantage to the block grant [which is what the CNMI currently avails of].The only advantage to the block grant that one can claim is that the administrative cost is paid.It’s $500,000 to $700,000. Say you are saving $700,000 now and you get $12 million [in food stamp]. But if you pay $700,000 and you get $24 million, just the tax alone.it more than pays for that [$700,000],” said Manglona.

The Senate president said he has raised this matter thrice during a meeting between the governor and the Legislature, to no avail.

“Every day that goes by is an opportunity lost,” he added.