Examine GASB Statement No. 68

May we remind our elected leaders in the Legislature to demonstrate to their constituents their accountability and stewardship over the CNMI public resources to first get their frame of thought reading and examining GASB Statement No. 68. Doing this could bring some closure to the worries our retirees worrying if their next pension pay is weighing low in the priority scale of our government that owes this obligation.

May we remind our elected leaders that the budget does not just list what the generally accepted accounting principles of assets and liabilities, it should consists of all contingent liabilities of this government. Contingent liabilities are what GASB statements settle. Contingent liabilities such as unpaid accrual annual leave and sick leave accounts, post employment health insurance, unpaid lawsuit settlements, unfunded liabilities of defined benefit pension, medical referral bills in collection, non payment to rainy days reserve funds, future cost for infrastructure developments, unfunded services it receives from CUC, future demand developments, future economic developments, commitments and contractual obligations, opportunity costs and goodwill, and others. So, if the liabilities, contingent or otherwise, is more than the expected revenues any budget is out of balance.

It is a matter of priority, and where the defined benefit funded pension plan in the ranking order should be number one. According to GASB Statement No. 68, the pension plan is protected and has priority over other creditors. The CNMI government failed in its moral and ethical obligation paying the pay as you go arrangement of the employer contribution share for more than 10 years. Today, this payment should be first priority and the first in line for payment regardless whether any of the elected of the Legislature could devise any clever idea to circumvent this matter under the disguise of letter of the law or spirit of the law. This issue give telling story indicative that our elected representatives in our government must now begin to think outside the box by considering cutting government services even considering eliminating government offices, taxation, turning the poor performing economies of Tinian and Rota into a fledgling and growing member of the CNMI economy. Piecemeal and selective approaches are not the answer. What is the Plan? Wishing consumes as much energy as planning. The latter brings much more focus and contingent result.

Francisco R. Agulto
Kanat Tabla