Govt owes PSS over $3M from previous year’s budget

The central government owes the Public School System over $3 million, representing the unpaid personnel allotments for last fiscal year, according to PSS finance director Richard Waldo.

In his report to the Board of Education on Friday, Waldo said the “roll-over” funds will help PSS with its financial needs in fiscal year 2012.

Public schools were originally budgeted for $32 million in fiscal year 2011. This was reduced to about $28 million after an across-the-board budget cut in all government agencies and departments.

Of the $28 million, PSS received only about $25 million, Waldo said, leaving a balance of $3 million that PSS still stands to get from the central government.

That amount is on top of the $1.7 million still owed by the central government in fiscal year 2010 when it also failed to remit PSS allotments in full, Saipan Tribune learned.

In the absence of local monies, federal funds saved PSS from payless paydays last fiscal year and the year before, Waldo said.

To offset this debt, Waldo said the central government and PSS recently signed a memorandum of agreement, with the central government promising to shoulder $1.7 million of the public schools’ utility payments this fiscal year.

“This means we will no longer worry about some portion of our utilities,” he said.

Waldo said that PSS pays an average of $2.6 million annually to CUC. If the central government will shoulder $1.7 million of the amount, the system has to find another $900,000 to cover the remaining projected cost and he is counting on the “$3 million roll-over funds” from the government.

He admitted, though, that there is no definite word yet if the government will satisfy this outstanding obligation.

PSS expects to incur a significant shortfall in its operations this fiscal year due to its limited $30-million budget for 2012.

PSS financial consultant Ed Tenorio said that PSS had initially asked for $36 million this fiscal year, to no avail. The projected shortfall or “gap” in the budget can be remedied in part by the “roll over funds” from fiscal year 2011, Tenorio said.

The $30-million appropriation for PSS will be sourced from the general fund and a portion of the CW fees, he said.

Last Friday, Education Commissioner Dr. Rita A. Sablan reported that PSS currently employs 464 classroom teachers-a drop from the over 500 last school year.

Tenorio said the reduction in the teacher population this year and the increase in class sizes were the result of PSS’ budget constraints, which boosted the teacher-to-students ratio to 1:28. This means that, on average, one teacher handles 28 students.

Tenorio said the transfer of employees from the defined benefit plan to the defined contribution plan will also bring substantial savings to the system.

“The switching would mitigate our shortfall because the employer share to the Fund is 30 percent under the DB plan whereas the DC plan is 4 percent,” he said.

Tenorio said that PSS also expects to save nearly $300,000 in rental and utility payments this fiscal year after it moved its offices from the NMI Retirement Fund building on Capital Hill to the Marianas High School compound in Susupe.