Go easy on Rota school project, OPA tells PSS

The Office of the Public Auditor has cautioned the Public School System against taking over the completion of a school project on Rota without an evaluation of the unfinished portion in view of the differences in the construction costs.

In a disclosure report on Rota’s Sinapalo Elementary School project, Public Auditor Leo L. LaMotte advised PSS officials to seek independent appraiser as well as legal opinion before taking over its construction.

According to OPA chief, PSS must establish actual construction costs as the figures provided by the Department of Public Works do not match with the estimates from its financier, SNM Corp. which owns the Rota Resort and Golf Country Club.

The Japanese-owned firm has funded the project through the $4 million contribution it pledged in 1989 under the lease agreement with the Marianas Public Land Corporation on a 150-hectare government lot on Rota.

Although initially estimated to cost $1.75 million, the project’s total costs ballooned to more than $3.1 million under the amendment of the original agreement because of the expansion in the design for some school facilities. DPW placed it at only $2.5 million.

Last year, the project’s contractor LVP Pacific Development Corporation was tasked to continue work on the still-unfinished school provided that funds from SNM remained available.

Since PSS wants to takeover the project, Education Commissioner Rita H. Inos had asked OPA to determine if there would be liabilities for the agency if SNM’s funds run out.

“We do not anticipate any other potential liabilities for PSS, aside from the costs to complete the school project and any excess costs that SNM may ask PSS to pay,” said Mr. LaMotte.

“PSS should note that any billings from SNM for excess costs should not be accepted without first obtaining verification by an independent appraiser, as required by the MOU,” he added.

Mr. LaMotte also maintained that SNM should be investigated if it has fully complied with the terms of the lease agreement, although Rota officials have yet to certify they it has done so.

He also indicated that based on documents submitted to OPA, DPW and PSS have taken over the project which puts into question whether the move is in the best interest of the CNMI without any guarantee of fulfilling SNM’s obligations.

“Any deviations by SNM from the contribution requirement and approved plans would constitute an adequate basis for PSS and the Rota Leadership to not accept the school project and to require SNM to provide the additional $2 million contribution called for in the [second agreement],” said Mr. LaMotte.