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Audit says transfer of $46M from autonomous agencies unrecorded
Deloitte says effect is possible unrecorded receivables
The transfer of $46 million receivables from autonomous agencies to the CNMI has not been recorded as of Sept. 30, 2014, according to the Commonwealth’s audit for fiscal year 2014.
The Deloitte and Touche LLC audit shows that no written document supported the transfer.
In the government’s response and corrective action plan, Finance Secretary Larrisa Larson said the CNMI will establish policies and procedures to identify, record, and reconcile valid receivables.
Larson said work is currently underway to not only identify the receivables owed by this transfer, but also collect on these receivables.
Deloitte said a section of the settlement agreement in Betty Johnson’s class action assigns the CNMI rights to collect deficient employer defined benefit contributions and related costs as of Aug. 6, 2013, from autonomous agencies.
Deloitte said that, as of Sept. 30, 2014, the NMI Retirement Fund confirmed such transfer of $46,051,656 in receivables, but the CNMI has not obtained details of these receivables and has not accessed collectability.
Deloitte said no audit adjustment was proposed due to the uncertainty of collection.
The auditing firm determined that the cause of such condition is the lack of established policies and procedures to identify, record, and reconcile valid receivables and the lack of written documentation supporting the transfer of receivables.
The effect of this condition, Deloitte pointed out, is possible unrecorded receivables.
Deloitte recommends that policies and procedures be established to identify, record, and reconcile valid receivables.
Deloitte further recommends coordination with NMI Retirement Fund to document the transfer.
