CDA divisions post hike in net assets

The two divisions of the Commonwealth Development Authority posted a 5-percent increase in combined net assets from 2009 to 2010, according to the audit report conducted by Deloitte and Touche.

The Development Banking Division and the Development Corporation Division recorded combined net assets of $1,091,246.

“Much of this increase was due to recoveries on previously non-performing loans and the resultant changes in the valuation allowances,” the report stated.

Due to recoveries of bad debts, significant changes were also noted in net operating revenues for both divisions in 2010.

DCD had net operating revenues of $1,084,108, with recoveries recorded at $550,526 in 2010 as against recorded bad debt expense of $796,207 in 2009. DBD posted $2,995,164 in net operating revenues, with recoveries recorded at $2,792,451 in 2010 compared as against $290,200 in 2009

DCD also posted a decrease of 86 percent or $2,607,474 in interest and fees earned on loans compared to 2009 which saw an increase by $137,182 or 5 percent “primarily due to a change in the method used to record interest on loans by only recognizing interest earned up to 120 days if the loan is delinquent.” DBD posted an 11 percent increase or $14,301 in 2010 compared to the $22,111 or 14 percent decrease in FY2009.

The decrease in earnings on investments suffered by each division is “another area of concern,” the report stated.

DCD’s invested funds slightly increased by 1 percent from $641,050 in 2009 to $646,978 in 2010. Related earnings on investments decreased by $46,626 or 78 percent. For DBD, it decreased by $4,418,910 or 58 percent, with related earnings on investment going down by $79,551 or 58 percent.

The decrease in the DBD’s investments for FY2010 indicates “a continued unattractive rate environment for investing funds.”

DBD’s operating expenses, which decreased by $156,386 or 94 percent, was due to “lack of expense reimbursements paid to DCD to cover shared costs.” DCD’s operating expenses, meanwhile, increased by $229,629 or 24 percent.

The Northern Marianas Housing Corp., which also carries out CDA’s functions, posted in FY 2010 a decrease in total assets, net operating revenues, total net assets, and total operating expenses.

NMHC’s total assets were recorded at $19,081,197 due to the use of housing assistance payment equity to fund deficiency in revenues received from the HAP grantor. Total net assets decreased to $11,615,840 or by 3 percent. Net operating revenues were posted at $7,167,505 while total operating expenses were at $8,051,102. Meanwhile, total liabilities increased to $7,465,357 or by 1 percent.