Gov’t taking years to recover missing funds • Audit report reveals $6 million in government funds yet to be recovered since 1990

At least $6 million in total revenues are missing from public coffers due to the failure of some government agencies to take aggressive steps in recovering unpaid rental fees, overpayment in professional services contracts and improper spending of public funds.

A report released yesterday by the Office of the Public Auditor revealed that only $109,097 of the $6 million government funds have been recovered so far, leaving some $5.8 million virtually missing.

OPA said the ability of the CNMI government to use the recoverable funds for various community projects and other programs depends on how fast concerned public offices will carry out effective measures to reclaim the money.

OPA said a bigger slice of the recoverable $6 million funds have been out of the government’s possession since the early and middle 1990s, involving 13 particular items identified in its April 10 report.

Much of the money, or at least $3.744 million, would come from the collection of rentals on land leases from eight quarry operators for six lease years from 1990 to 1995.

Of this amount, only $30,863 have so far been reclaimed from two quarry operators, while close to $1 million due from one quarry firm was written off because of bankruptcy.

Public Auditor Mike Sablan also mentioned close to $1.5 million in overpayments made to ten professional services contracts covering the period October 1995 to may 1998. Only $61,794 of the total amount have so far been recovered by the CNMI government from contractors.

Mr. Sablan’s report also noted the $126,730 which the NMI Retirement Fund should collect from two former officials of the Commonwealth Ports Authority. The money represents the improper payments made to the two officials for retirement benefits and compensatory time claimed.

The OPA report disclosed the Retirement Fund has already started withholding 50 percent  of former CPA executive director Carlos Shoda’s semi-monthly pension, and has written settlement plan required for former CPA Security Chief Joseph Reyes.

More than $50,000 are also up for recovery from the Division of Public Lands for double payment of travel expenses and overpaid per diem allowances to the former Board chairman, Tinian board member and Rota board member for the period September 1992 to September 1994.

Only $13,050 have so far been recovered from the total amount, said the public auditor’s report.

OPA said CPA should recover $42,191 in improper disbursements from the board members covering selected board-related transactions from fiscal years 1991 to 1994. It also mentioned the $369,866 that need to be recovered from the Public School System for the operation of the Marianas High School food court covering school year 1998-1999.

Also, at least $56,000 are also up for recovery by the Department of Finance for the funds misused by its former secretary from fiscal years 1995 to 1997. The federal court has ordered the restitution of the said amount.

At the same time, OPA said 13 audit reports had been referred to the Attorney General’s Office as of end-December 2000 for legal action to $662,000 improperly expended.

These transactions and spending include:

• $253,400 representing questionable payments on three professional services contracts audited covering the period October 1, 1995 to May 4, 1998;

• $164,534 representing improper payments made to a contractor and adverse action against contractor for misrepresentation including debarment from future government solicitations on the contract for the Tinian road resurfacing project in FY 1997;

• $96,100 which represent promissory note for overpayment of two professional services contracts audited between October 1991 and July 1995; and

• $75,000 for funds misused by the former finance secretary from fiscal years 1995 to 1997.

Aside from these, a substantial amount of money remain unrecovered from several private contractors and former government officials, according to the OPA report.