CUC violating travel rules—OPA

The Commonwealth Utilities Corp. has been found to be non-compliant with the law and established policies governing travel, based on the preliminary results of an initial survey conducted by the Office of the Public Auditor.

In a Nov. 3, 2105, letter to CUC board chair Adelina Roberto, a copy of which was obtained by Saipan Tribune, OPA said it is communicating the preliminary results of the survey to the board “due to violations and weaknesses found in travel” and is giving the board time to make corrective action.

OPA told CUC to provide a plan of action by Nov. 16. However, CUC has yet to submit any such plan.

In a phone interview yesterday, CUC chief legal counsel James Sirok said they haven’t submitted a plan of action but they are in communication with OPA.

“We have communicated with them already on this,” Sirok said.

OPA raised five points in its initial survey results, the first of which is that the board adopted travel rules that are inconsistent with the law.

It stated that during an official meeting held on April 6 to 7 this year, “the board adopted a policy that prescribed how per diem is calculated for board members who travel to Saipan for board meetings.”

OPA noted that the change arose after a discussion that the $15 subsistence allowance was not enough “for travel less than 10 hours.”

“The subsistence allowance of $15 is a travel policy of the Executive Branch as well as CUC’s travel policy. Therefore, the travel rules of the board shall be governed by the travel policies of the Executive Branch to comply with the law,” OPA said.

OPA said that in CUC’s enabling statute, the travel rules and per diem rates for board members shall be the same as those established by the Executive Branch.

“This provision of the Commonwealth Code cannot be changed by a majority vote by members of the board but would need to be repealed or amended by the Legislature,” the OPA letter said.

OPA also pointed out that CUC’s per diem calculation is not economical and cost-efficient as the corporation calculates estimated per diem by multiplying the per diem rate with the number of travel days and that CUC uses the per diem rates issued by the U.S. General Services Administration for their employee travel.

In their survey, OPA also found that employees and the board are given an advance of 100 percent of their estimated per diem, which is contrary to CUC’s travel policy, which states that travel advances are limited to 80 percent of estimated per diem.

Outstanding travel advances

OPA also noted that travel vouchers are not being submitted in a timely manner.

In its review, OPA said that “a board member was issued repeated travel advances despite failure to clear outstanding advances.”

“CUC’s travel policy states that, ‘Board members who fail to clear outstanding travel advances within the required period shall have any amounts due to them (e.g. honorariums and reimbursements) applied first against the outstanding advances until they are paid in full. Furthermore, they will not be entitled to travel advances on subsequent trips,” OPA said.

OPA said it is communicating with CUC to resolve the deficiencies to prevent further noncompliance “and to begin the process of collecting any overpayments made to employees or board members.”

“If timely action is taken by management and the board, then OPA does not see the need for conducting a formal audit on CUC’s travel activities at this time,” OPA said.

The letter, signed by Audit Manager David Blake and Public Auditor Michael Pai, recommended that CUC comply with the law and adopt travel regulations that are consistent with the established policy and law; are economical and cost-efficient; and incorporates a level of control to prevent fraud, waste and abuse.