‘500 people lost jobs, but docs show there is still ARPA money’

Senate President Edith E. DeLeon Guerrero (D-Saipan) said Friday that the Palacios-Apatang administration preaches the words of transparency and accountability, yet 500 employees whose posts were funded by the American Rescue Plan Act by the previous administration have lost their jobs despite evidence showing a positive number that there is still ARPA money.

DeLeon Guerrero also disclosed that the Tinian Department of Community and Cultural Affairs is being asked to surrender a car, which was processed through ARPA, as allegedly there is no more ARPA money.

She said she was told that the Tinian DCCA uses the car to go to the Tinian airport to pick up the food stamp coupons for the people of Tinian.

“And therefore, transparency again, accountability, honesty, rebuilding trust for the people of this Commonwealth is the very reason why we are pushing for an override,” DeLeon Guerrero said.

The Senate president issued the strong statements against the administration before voting “yes” to Senate floor leader Sen. Corina L. Magofna’s (Ind-Saipan) motion to override Gov. Arnold I. Palacios’ veto on Sections 604 and 713 of Public Law 23-04, or the amended budget law, during a special session.

Section 604 refers to revised CNMI ARPA Spending Plan, while Section 713 pertains to the access provided to Legislature to the government’s Munis Financial Management Information System.

With four senators voting “yes,” two voting “no,” and three absences, the motion to override the veto did not pass the Senate.

Aside from DeLeon Guerrero and Magofna, the others who also voted “yes” were Sens. Jude U. Hofschneider (R-Tinian) and Francisco Q. Cruz (R-Tinian).

Sens. Celina R. Babauta (D-Saipan) and Dennis James C. Mendiola (R-Rota) voted “no.” Absent but excused from the session were Sens. Paul A. Manglona (Ind-Rota), Donald M. Manglona (Ind-Rota), and Karl R. King-Nabors (R-Tinian).

Edith E. DeLeon Guerrero

Section 604 of the amended budget bill states, prior to the submission of a revised CNMI ARPA Spending Plan of the ARPA funds to the Secretary of the U.S. Department of Treasury, the revised spending plan must be approved by the CNMI Legislature by joint resolution after consulting with the administration to ensure that the critical needs of the Commonwealth are addressed. This is the particular line item veto on Public Law 23-04, that Palacios signed last April 25.

Palacios vetoed Section 604 on constitutional grounds that any measure that is intended to have the force and effect of law must be originally introduced as a bill in the Legislature, which upon passage must be presented to the governor for approval.

In expressing her sentiments as why the override is essential, DeLeon Guerrero said if they may recall, with House Bill 22-33 in the prior Legislature, there was a big push to have this Legislature participate in the ARPA funds expenditures. She said the bill went up to the Senate and it did not go through.

The president said as they enter the new Legislature, that is the reason why the spirit and intent of transparency and working together between the bodies of this Commonwealth is the very purpose why they inserted that particular language—the administrative provision for the passage—to ensure that there is a balance with respect to the ARPA spending.

As a matter of fact, she said, the now Finance Secretary Tracy B. Norita did make a statement publicly in the Senate that a revised spending plan for ARPA was supposed to be submitted end of March 2023 to the U.S. Treasury.

To date, DeLeon Guerrero said, they have not seen any revised spending plan, though they know that there’s some activities happening with the ARPA funds even as they speak.

The president said they have yet to receive any formal notice to the Legislature whether such a revised spending plan is to be submitted to the U.S. Treasury.

In Section 713 of the amended budget bill, it states that “read only” access shall be provided to the House speaker and the Senate president and their designee, the fiscal analysts, for budgetary purposes at a level equal to that of the CNMI Office of Management and Budget.

In vetoing this section, Palacios said that, in addition to a separation of powers issue and the confidentiality of taxpayer information, it would be counter-productive to provide direct access on real time to Department of Finance’s information and data in the Munis Financial Management Information System.

DeLeon Guerrero said she executed a request to Munis dated Jan. 13, 2023, to Norita, who was then acting Finance secretary at the time, in the spirit of transparency and accountability, knowing that she has no access to Munis and JD Edwards, and to make sure that they look into the financials of the government, because of the financial crisis that the CNMI is facing.

The president said she specifically requested in that letter that in order for the CNMI Legislature to effectively and efficiently perform its work pertaining to the CNMI government’s financial status, it is necessary to the fiscal analysts of the Legislature be permitted to access Munis.

She said the fiscal analysts were given access to the former JD System and this authorization was critical to the analysts in providing the necessary and most appropriate guidance to legislative members.

She said Public Law 23-04 was passed on April 25, 2023 and Munis access and ARPA were vetoed.

The president noted that her request was dated back since Jan. 13, 2023, and to validate the request, a response came back from a Finance staff. She said the Finance staff asked an employee, who works for the Secretary of Finance Office, to reach out to the Senate president’s office and provide assistance on the request for Munis access approved by the acting Finance secretary.

“We were given access, yet the veto which pass April 25, 2023, took place. And so it does not agree with what was approved and what was vetoed,” DeLeon Guerrero pointed out.

The Senate president also talked about ARPA and the quarterly reports submitted to the Legislature by the Finance secretary as mandated by law.

The law requires the Finance secretary to report on a quarterly basis to the presiding officers of the Legislature, with comparison of actual revenue collected and revenues estimated, comparison of actual expenditures and appropriated expenditures, and transfers in and out funds. She said the purpose of the reporting requirements is to monitor the financial health of the government and provide reasonable assurances on transparency and accountability.

“We have spoken this since January 2023 about rebuilding trust, transparency and accountability to the people of this Commonwealth and to be open, to open our books to tell the people of the Commonwealth where we stand with our finances, local revenues, ARPA money, and all federal money that we receive in this Commonwealth,” DeLeon Guerrero said.

She noted that in the two quarterly reports submitted to the Legislature by the Finance secretary, there’s no narrative reports submitted highlighting the performance of the budget on the revenue estimates against the actual collections, appropriated expenditures against actual expenditures and incumbrances, reservation of certain earmark funds against actual earmark expenditures, and reservation of certain debt service payments against actual payments.

Thus, she said, the results of the operations would have shown whether the CNMI government incurred a surplus or a deficit for the past six months in fiscal year 2023.

DeLeon Guerrero said the secretary of Finance’s highlighted report to the members of the Legislature should include, among other things, revenue trends on the revenue estimates of all the revenue bases, identify those revenue bases that are overly projected and make immediate adjustments accordingly.

On ARPA funds, DeLeon Guerrero said during the conference committee for the modification of the fiscal year 2023 budget, in the words of Norita, and as repeated in the media, lawmakers are confused that there is still some ARPA funds left. The president said it is because the then-acting Finance secretary did say on record that there is still ARPA funds.

“And no we are not confused at all,” she said.

DeLeon Guerrero noted that when they first took office, a worksheet was provided showing that as of Dec. 31, 2022, the available ARPA was $65,789,171. She said the latest report showed that, as of May 31, 2023, available ARPA was $93,419,465.

The president said these are the very documents coming from the Office of the Secretary of Finance.

“And for this reason, for the people of the Commonwealth, there’s no other motive other than to be transparent, to be accountable to the people of the Commonwealth, to show the evidence, of what we have in our books, to produce the evidence that has been provided to this very body. We have to be,” DeLeon Guerrero said.

She said her own office is fighting for the island of Tinian, which purchased a car for a program under DCCA and that her office has been asked to get assistance for approval of payment.

Now the department is being asked to surrender the car because allegedly there’s no more ARPA money.

The president said she spoke to the procurement officer of the CNMI government, and wrote an email to the treasury of Secretary of Finance. She said she argued the point that when they commit to a purchase order, they validate and certify funding for commitment of obligation.

Before the voting on the motion to override, Babauta moved that the motion be withdrawn.

Babauta said with respect to the concern about Section 604, a House bill, which has already passed the House, addresses that directly by requiring the administration to report any non-local—meaning all federal funding that arrives—to be reported to the Legislature. She said that bill is already on its way to the Senate.

Regarding the concern about Section 713, Babauta said there is also currently a House bill that addresses that specifically. “My concern with the override is that it is a Band Aid solution,” she said.

Babauta said if the override passes, it only brings them up to the end of this fiscal year, but if they pass the two House bills, it will permanently require and address the concerns with respect to the two particular sections of the amended budget bill that was line-item vetoed by Palacios.

Babauta’s motion to withdraw was defeated.