TO INCREASE RETIREMENT BENEFITS Ex-CPA officials pad leave credits

The previous administration of the Commonwealth Ports Authority are facing investigation by the Office of the Public Auditor for allegedly circumventing the NMI Retirement Fund Act to increase the retirement benefits of two former officials.

A preliminary result of the OPA investigation disclosed that the previous CPA administration allowed the conversion of the officials’ unused compensatory time hours to sick leave for use as additional years of credited service in the computation of their retirement allotment.

The ports authority also paid the former officials’ unused leave and salaries in advance to increase the average annual salaries used in the computation of their retirement apportionment, according to the public auditor’s report.

As executives, the ports authority’s former executive director and chief security officer are not covered by the Fair Labor Standard Act and are, thus, not qualified to earn compensatory time.

The public auditor identified the CPA officials as former Executive Director Carlos A. Shoda and former Saipan Airport Security Chief Joseph A. Reyes.

However, initial report of the public auditor investigation disclosed that CPA granted compensatory time to the two former officials in violation of existing CNMI Personnel Regulations.

The OPA report also said the former security chief claimed excessive compensatory time of 1,800 hours to qualify for early retirement benefits.

This qualified Mr. Reyes to claim the 30 percent early retirement bonus of $13,973.76 which was paid out of CPA funds, and to receive monthly pension payments of $2,473.36 from the NMI Retirement Fund beginning January 1997.

At the same time, OPA said the 4,818 accumulated sick leave hours credited to Mr. Reyes were actually 348 hours in excess of the properly computed balance of 4,470 hours.

The OPA report added that the previous CPA administration allowed its officials to earn annual leave of about 14 hours per pay period or 360 hours in a year which is excessive of the law-mandated eight-hour leave per pay period or 208 hours granted each year to officials and employees of the CNMI government.

Due to the lack of proper documentation and approval, the preliminary OPA report said the granting of compensatory time to Mr. Shoda and Mr. Reyes should have not taken place even if they had been otherwise entitled to receive it.

Based on the CPA personnel manual, compensation benefits amounting $12,114 paid to Mr. Shoda were at least $5,114 higher than what other government officials, who receive the same salary, would normally get.

OPA also noted that the excess annual leave credits granted to Mr. Shoda increased his average annual salary and pension benefits by at least $222 monthly or $2,674 annually.

According to the public auditor, irregularities in the granting of compensatory time to the two former CPA officials occurred because personnel regulations adopted by the ports authority were not in accordance with that of the Commonwealth-wide policies.

OPA also alleged that Mr. Shoda and Mr. Reyes “used their positions and disregarded regulations to improperly claim compensatory time.”

In order to curb repetition of such irregularities, the public auditor has offered a 10-point recommendations for implementation by the CPA Board of Directors.

The OPA asked the CPA Board of Directors to:

• Adopt personnel rules and regulations that are: (a) within the authority granted by the CPA Act, and (b) consistent with and governed by the same principles of fairness and equality as the CNMI Personnel Regulations;

• Establish necessary control procedures for approval and documentation of overtime and compensatory time;

• Comply with the Administrative Procedures Act by publishing CPA Personnel Regulations in the Commonwealth Register;

• Adopt personnel rules and regulations in compliance with the Retirement Fund Act, thereby repealing the regulation that allows conversion of unused compensatory time hours to accumulated sick leave for certain officials;

• Instruct the CPA accounting department to stop the practice of making advance payments of unused annual leave and salaries, and comply with the provision in the employment contracts in making payments upon contract expiration.