Report details NMC fund mismanagement

Several policies implemented by the Northern Marianas College have led to the serious financial crisis besetting CNMI’s lone higher learning institution, according to an in-house committee report that drew tepid response from officials despite sounding an alarm on the problem.

But the findings made on the critical report ended up boosting charges of mismanagement of the state college by the House committee on Health, Education and Welfare which resumed its oversight hearing on NMC yesterday.

HEW chair Rep. Heinz Hofschneider called on the college to reform its system to prevent what he claimed an appalling pattern that has allowed NMC to overspend beyond its appropriated budget and incur deficit in the past few years.

“This kind of management has got to stop. Time for a change… on the way you run the college,” he told college officials at the hearing, the seventh in the series of investigation into their fiscal affairs and policies.

The panel made public disclosure of the report drafted middle of last year by so-called Cost-Cutting Committee comprised of some NMC officials in an attempt to deal with budgetary constraints at the college due to shrinking public funds.

Among the findings included in the report were practices that have drained college coffers, such as:

– “recycling” of personnel that has rarely enhanced employee performance, but increase payroll costs;

– liberal application of policies approved by the Board of Regents;

– selective pay adjustments even before the contract expires;

– generous package of benefits for even new employees;

– hiring of adjunct or part-time faculty without consideration of the budget situation;

– liberal application of professional training programs that allows employees to use up their office hours and incur overtime pay due to backlog of work;

– promotion when it’s clear that there is deficit;

– project implementation without normal course of action;

– lack of research on programs;

– hiring of consultants and laxity in granting official travels; and

– pervasive attitude that is “very self-serving,” leading to morale problem among employees.

Hofschneider said these findings are exactly what the House panel has been harping since the oversight began last January, pointing to governance, organizational structure, culture and attitude within the college as possible causes of the deep financial trouble.

Quoting the report, the representative maintained the current NMC management style is “too complex, bureaucratic, expensive and hampers efficiency.”

Although he was made aware of the findings as early as June 1998, NMC Chairman Manuel Sablan told the hearing that he had asked documents as evidence to back up the accusations as the board has yet to receive the official report even up to now.

Malinda Matson, who headed the in-house committee several times in the absence of its chair, claimed they provided a copy to the Quality Management Council, hoping that it would be passed on to the board.

“We went over the report very carefully, we can support these findings,” she said in response to charge by Sablan that these were just allegations.

Bookstore fiasco: During the continuation of the five-hour hearing in the afternoon, HEW focused its inquiry on the privately-run bookstore which has drawn protest due to alleged exorbitant prices on the items for sale, like pencils and textbooks.

Hofschneider accused NMC of forcing students, especially those receiving financial aid from the CNMI government, to purchase their school supplies at the store, calling it a monopoly and unfair practice.

The panel found the “divestiture” questionable as the non-profit entity remains under the authority of the college-ran board of auxiliary services. It also claimed its manager received salary from the NMC budget — a “blatant misuse” of public funds, the HEW head said.

President Agnes M. McPhetres defended it as lapse in the board decision which the college is currently reviewing to correct the problem, citing the “symbiotic relationship” between the bookstore and NMC.

While the hearing ventured partly into the School of Education, the committee is expected to continue to inquiry into the program when it resumes the oversight on Monday.