Lawmakers confused; there is still some ARPA funds left

Sen. Donald M. Manglona (Ind-Rota), who chairs the Senate conference committee, sixth from left, offers the Senate’s proposals to the House of Representatives conference committee during their joint meeting yesterday in the House chamber. The conference committee is trying to resolve their differences on a bill that would revise the budget law for the CNMI government’s operations for fiscal year 2023. (FERDIE DE LA TORRE)

There is, after all, still some American Rescue Plan Act funds left over from the previous administration.

That revelation confused some lawmakers yesterday, who said they were under the impression that there is simply no more ARPA funds left, hence the dire need to revise the fiscal year 2023 budget law.

Sen. Corina L. Magofna (Ind-Saipan) said yesterday that she’s a little confused to hear that there is still some ARPA money left.

“And I would assume that if there [were] no ARPA, that the general fund is being tapped to subsidize those payments of those expenses,” said Magofna after hearing the testimony of Finance Secretary Tracy B. Norita during the bipartisan conference committee meeting yesterday.

The conference committees of both the Senate and House of Representatives held a joint meeting yesterday to resolve their differences on a bill to revise the budget law for the CNMI government’s operations for fiscal year 2023.

Sen. Donald M. Manglona (Ind-Rota), who chairs the Senate Conference Committee, told Saipan Tribune last night that they’re done with all proposals but haven’t voted on the final product.

“We will convene tomorrow at 10am to go over one last time, all the amendments that were voted on,” Manglona said.

At the joint meeting held in the House chamber, Norita was called to testify about ARPA matter and other issues.

Magofna said that Norita clearly stated that there is still some ARPA funds left.

“But to my understanding from the very beginning when we started the fiscal team, I was under the impression that we just didn’t have any ARPA, hence the need to implement cost-containment measures and release the ARPA-funded employees,” she said.

“So you’re confidently sitting there and saying that that none of the general fund was used to supplement or subsidize any ARPA expenditures?” the senator asked.

Norita replied “yes” as she explained that general fund collections were used for general fund obligations, including prior year obligations that must be paid such as utilities, fuel, and other critical expenditures like Group Health and Life Insurance payments.

Before Magofna questioned Norita, Rep. John Paul P. Sablan (Ind-Saipan) stated that when they were having weekly meetings with the administration’s Fiscal Response Team, it was the notion at the very beginning that there’s no more ARPA.

Norita said that, based on the findings of the Fiscal Response Team, the ARPA cash that is remaining does not match the expenditures that are in the Munis system. “And so the work continues to reconcile those funds, and it will take longer than a couple of weeks to really find out what happened to those funds, where did it go,” Norita said.

She said that looking at the reports that they put together with the ARPA spending plan versus what was actually expended in the system versus the cash balance, there’s a significant difference in unidentified expenditures on recorded expenditures.

“So when we take all those factors into consideration, we have to figure out a way to move forward. And the best way to move forward is to restrict the ARPA spending so that we can conduct the reconciliation,” Norita said.

She said this is why they moved into immediate cost-containment and the release of ARPA employees. “Because if you look at the system and look at the budget available, there should be a lot of money remaining. However that’s not the situation,” Norita said.

She said they also have to look at the remaining cash and the outstanding obligations that continued to mount without a revised budget, and it was exceeding $70 million.

The secretary said they are holding on to the payment of obligations because they want to reconcile. “And so the best way to move forward is to revise the budget. So that we can adjust the expenditures. Until then, we have to use what little remaining cash we have to keep the government in full operation because there are no operational funds in the general fund budget,” Norita said.

Norita said in their fiscal response meetings, they were using a Dec. 31, 2022, cutoff to help them project forward as to how long their cash flow will last. She said at the current level levels with the bloated amount of FTEs and ARPA-paid employees, that cash would fully depleted in a matter of 10-pay period.

“So to avoid that situation, we had to take immediate action to start cutting out expenses, hence our decision to start restricting ARPA expenditures,” Norita said.