Senate committee is created to look into $93M CDL funds

Having gotten no objection from the Office of the Public Auditor, Senate President Edith E. DeLeon Guerrero (D-Saipan) has created a special committee to investigate the previous Torres administration’s expenditures of the $93-million Federal Emergency Management Agency’s Community Disaster Loan funds.

DeLeon Guerrero said yesterday this is not the first time she has raised questions related to FEMA’s CDL funds, since she raised the same questions as a member of the previous Legislature’s minority bloc.

“We are now five months into the 23rd Legislature and we continue to hear the depletion and/or over commitment of funds to include these FEMA CDL funds that is forgiven in its entirety,” she said.

At the same time, DeLeon Guerrero said, she sent a letter dated Feb. 3, 2023 to OPA, requesting for an audit of the CDL funds. In that letter, DeLeon Guerrero asked OPA to conduct an audit to determine what fund the $93-million CDL loan was recorded and accounted for; total expenditures; total encumbrances; total reimbursements; and identify what activities or programs would have reimbursed the CDL fund; and balance of the CDL as of Jan. 31, 2023.

Edith E. DeLeon Guerrero

DeLeon Guerrero said yesterday that acting Public Auditor Dora Guerrero paid a courtesy visit to her office last Friday on a separate matter, so she took the liberty to bring to her attention her intent to create a special committee to look into the CDL funds. The senator said that, inasmuch as OPA is busy with other matters, Guerrero did not object to her plan.

In a memorandum on Friday, DeLeon Guerrero appointed Sen. Donald M. Manglona (Ind-Rota) to serve as chairman of the special committee, which will be tasked with reviewing and reporting on all financial transactional expenditures/activities of the FEMA CDL Funds.

The Senate president said this in-depth review since the CNMI’s receipt of the $93-million CDL is necessary so that they can understand and validate the corresponding financial transactions in relation to these funds, to include the need for public transparency and accountability of the funds.

DeLeon Guerrero said OPA did receive her request dated Feb. 3, 2023, to audit the CDL funds, but in the interest of time, the need for this review is pressing.

She also cited as additional reason the dire financial situation of the CNMI, and Gov. Arnold I. Palacios’ veto of Section 705(c) of Public Law 23-04, or the Revised Appropriations and Budget Authority Law of 2023. Under that section 705(c), the Finance secretary is supposed to reserve $7.2 million from the CDL to fund the local Medicaid matching.

In vetoing that provision, Palacios said not only would that provision violate the Code of Federal Regulations, but the previous Torres administration has exhausted all CDL funding and there is no balance in the account to allocate for any use.

DeLeon Guerrero also appointed Sens. Corina L. Magofna (Ind-Saipan) and Jude U. Hofschneider (R-Tinian) as vice chair and member, respectively, of the special committee. She appointed fiscal analyst David Demapan, the Senate legal counsel, and a Senate legislative assistant to assist the special committee in its review.

DeLeon Guerrero said the special committee shall report back to her within 60 days.

FEMA approved the CDL in 2021 in order to settle the CNMI’s outstanding obligations associated with its response to Super Typhoon Yutu’s devastation in the Commonwealth in October 2018.

The CNMI received the CDL in 2021 and then-governor Ralph DLG Torres was the expenditure authority of the funds at the time.