Norita: No issue with municipal employees’ lump sum payments

Saipan Mayor Ramon “RB” Camacho recently discovered that there was a total of $98,137.14 in lump sum payments of accrued annual leave for former and current municipal employees that were taken from his funds.

Upon discovering this, Camacho wrote Finance Secretary Tracy B. Norita on July 6, 2023, saying he was “shocked to discover that there is now less money in the Office of the Saipan Mayor’s account than what was supposed to be there in the beginning of the third quarter of the current fiscal year.”

He further stated that his office and the MOS Human Resources office did not request for the lump sum payments and asked what is the proper procedure for requesting and receiving lump sum payments for accrued annual leave.

According to Norita, the payouts made were a matter of timing and are authorized and legal, This was her response to questions about it during a Senate Committee Fiscal Affairs budget hearing last Friday.

“These employees in question were being paid out of the mayor’s 603 funding, so that’s why the funding was available. If it was any other source, it would not be available and thus not paid out,” Norita clarified.

The process for the payments went through verification, accountability, and due diligence. It was just a matter of timing in the issuance of those payments, as it happened to be in the term of the new mayor. However, those payments were authorized and verified, she said.

“We verify whether the payment is authorized by the expenditure authority, which it was; whether it was allowable, which it was, as confirmed by [Attorney General Edward Manibusan]; and whether the funding was available, which it was,” said Norita.

This screen-grab shows Finance Secretary Tracy B. Norita, front right, answering questions from senators about the annual leave lump sum payments to former and current Saipan municipal employees during a Senate Committee Fiscal Affairs Budget Hearing last Friday on Capital Hill. (CONTRIBUTED PHOTO)

It then went through for completion. As for its allowability, that was why these payments were held back at the direction of the director of Finance’ financial services, said Norita.

“In doing her due diligence, she held back those payments, and in holding them back, we had to get AG’s opinion on the applicability of those regulations that we normally apply to everybody else. The opinion that came back was that municipal employees are separate from state employees, and that the payment was allowable,” Norita said.

Finance did hold back those payments, but with the AG already verifying their allowability, the DOF then released those payments as it went through the normal process of verification and accountability, she said.

Norita added that how the Department of Finance processes normal RFPA’s or Request for Personnel Action, the funding account used to hire a personnel is the same funding account that is used when the personnel is separated from the government.

As the funds were taken from the current fiscal year’s budget but under a new administration, Norita said that “it’s just a change in the expenditure authority. As far as the authorizing document, which is the RFPA, it’s signed, approved, and authorized by the proper expenditure authority and we have to acknowledge that. …Therefore, there was no need to inform the new mayor because it was already a normal process.”

Leave encashment refers to the compensation provided by an employer to an employee for their unused paid leaves at the time of retirement or resignation.

The payouts were disbursed on May 19, 2023, May 27, 2023, June 2, 2023, June 14, 2023, and June 28, 2023.

Camacho’s chief of staff, Priscilla Iakopo, said in a separate interview that they discovered the payouts when they were reviewing payroll and learned that a current employee got an annual leave buyout.

According to the Department of Finance’s Munis system, the former employees are Joann Aquino, Henry Hofschneider, Larissa Flores, Luise Villagomez, Joaquin Deleon Guerrero, Melvin Sablan, Michael Cruz, Keisha Nepaial, Joseph Palacios, and Youki Kishimoto. Many of them now work with Lt. Gov. David M. Apatang.

Current mayor’s office employees Teresita Camacho, Jeffrey Cabrera, Christopher Borja, and Barbara Yamada also received lump sum payments for their accrued annual leave.

Apatang, who is a former Saipan mayor, said in an interview about the issue, “I have nothing to do with it. …These [employees] either resigned or were terminated and I think they have every right to get their reimbursement for their leave… There’s no plot here.”

Camacho was unavailable for comments and is off island until today.