SHEFA chair is new expenditure authority of scholarship funds

The board chair of the Saipan Higher Education Financial Assistance has been designated as the expenditure authority of all the funds appropriated for SHEFA, based on a new law signed by acting governor Eloy S. Inos.

Saipan Local Law 17-9 authorized the appropriation of Saipan poker and pachinko license fees. Of the total appropriation of $3.454 million this fiscal year, $3 million goes to SHEFA and $100,000 to its operations account. The rest are for other projects and programs.

Previous appropriation laws designated the Finance secretary as expenditure authority for SHEFA funds.

SHEFA administrator Henry Hofschneider told the board yesterday that there are some restrictions on the expenditure of funds, including the concurrence of the board chair before any funds are spent. It also prohibits using the funds for expenses related to legal fees and representation.

“This provision basically means that SHEFA is not permitted to hire a consultant, an external auditor [to audit the financials of the program] or even an attorney during the period of the appropriation, to provide assistance on legal issues or consultancy services to improve SHEFA rules and regulations or policies,” said Hofschneider during the meeting held at the Saipan Mayor’s Office.

SHEFA spent over $396,000 for consultants and professional services since the program’s inception in 2004 up to 2010. These professional services were mainly fees paid to former consultants. Other items included under professional services were legal opinions sought by the management in previous years.

Hofschneider said they need to clarify with the Finance secretary, the Office of Management and Budget, and chairman of the local delegation on the effective date of Saipan Local Law 17-9.

He explained that the funds appropriated by the new law are not subject to fiscal year limitations.

”While it protects the appropriated funds from fiscal year limitation, it is unclear if such mandate also requires that expenditure of the funds follow the government’s fiscal year period. If it does, then when does SLL 17-9 fiscal year begins and ends is the question that needs to be answered,” said Hofschneider.

Each fiscal year, the Legislature allocates $3 million for SHEFA scholars, using revenue from poker fees. Recipients are expected to return to the island to work in either the government or private sectors.