OPA to audit CUC finances

The Commonwealth Utilities Corporation will open its financial records, losses and revenue reports, and books on expenditures in the next two weeks as the Office of the Public Auditor begin its audit investigation.

This is in preparation for the inquiry scheduled by the House Committee on Public Utilities, Transportation and Communication on March 18 to take a closer look at CUC’s fiduciary responsibilities.

Committee chair Rep. Rosiky Camacho disclosed the scheduled OPA evaluation and eventual recommendations should help CUC re-focus its efforts in order to improve its fiscal management.

Legislators will also look deeper into whether or not CUC implemented a financial recovery plan, a condition set in a 1994 agreement it reached with the Office of the Insular Affairs.

The house body will also determine where CUC uses its revenues and how much losses it has incurred due to delinquent payments, as well as outstanding debts to vendors like Mobil Oil Marianas.

“It is time to sit down and tackle thoroughly how CUC works and where its finances go since it often claims shortfall on collections and insufficient revenues to cover operational costs and expenses,” said Mr. Camacho in an interview with reporters.

He said the inquiry will determine if CUC has sufficient revenues to sustain its operations and whether exemption from the Liquid Fuel Tax has helped the utility corporation in beefing up its finances.

CUC officials should cooperate fully with OPA audit and evaluation to help the agency come up with effective measure and programs to improve its financial status.

The committee, together with CUC and OPA officials, is scheduled to meet today in preparation for the March 18 committee hearing on House Bill 12-320, which transfers payments of CUC’s loans obtained from the Commonwealth Development Authority to the Department of Finance.

HB 12-230 also aims to provide CUC with credit against such indebtedness for all capital expenditures made from its revenues subsequent to the date of such borrowing from the CDA.

The scheduled inquiry is also expected to touch on sensitive issues like allegations of excessive travel tabs, across-the-board wage increase and the employment of 35 ‘non-essential’ utility personnel.

Reports disclosed that from October 1999 to date, CUC spent more than $600,000 on board travel alone and over $120,000 on board members’ per diem during off-island travels.

Most of these travels are incurred for the negotiation of the construction of 60 megawatt power plant with Enron and mostly attended by negotiation panel head and CUC vice chair Laura Manglona.

Early this month, Ms. Manglona together with Board Chair Jesus T. Guerrero, members Sonny Flores and Ed Sablan, CUC legal counsel Steve Woodruff and Assistant Attorney General Murphy Peterson attended a meeting in the mainland US.

In the past six months, CUC hired 35 personnel including Mr. Guerrero’s brother-in-law Manuel Sablan as liaison to Legislature, with an annual salary of $49,000.

CUC also implemented its $2,000 across-the-board salary hike and an additional $1,000 anniversary increase for each of its utility employee. All these are believed to be approved by the CUC board chair.