Marianas Variety

Last updateThu, 23 Aug 2018 12am

Headlines:

     

     

     

     

     

    Tuesday, August 21, 2018-9:44:33A.M.

     

     

     

     

     

Font Size

Settings

Report: NMI government deficit down 53.7%

THE recent independent auditors’ report by Deloitte & Touche LLC indicated that the CNMI government has improved its net position by 53.7 percent, or by $71.8 million by reducing its deficit from $133.8 million to $61.9 million between fiscal years 2016 and 2017.

The Department of Finance on Thursday announced the completion of the 2017 Single Audit Report by Deloitte & Touche regarding government-wide financial statements including revenues, expenditures and deficit spending.

Click to enlarge

In a statement, Secretary of Finance Larrisa Larson said the report showcases a dramatic improvement in the CNMI’s financial status in many key areas.

Larson stated that the CNMI’s expenses for governmental activities were approximately $374.9 million which includes payments made to autonomous agencies.

She said these expenses were funded in part by program revenues of $147.6 million, general revenues of $297.5 million, and transfers of $1.5 million. The difference between total revenues and transfers of $446.7 million and total expenses of $374.9 million resulted in a decrease in the deficit net position by 53.7 percent, she added.

“The improvement of our net position is an indicator of a government’s financial position —its financial standing at a given point in time. Financial position can be tracked over time to assess whether a government’s financial health is improving or deteriorating. In other words, it means our deficit decreased by a historical percentage because of this administration’s commitment to bettering our financial position for our children and the future,” Larson said.

Gov. Ralph D.L.G. Torres, in a statement, said improved economic circumstances and critical financial reforms were instrumental in bringing about this improvement, and with the adoption of new accounting standards since fiscal year 2016, the corrective-action plan reflects the need for oversight of all agencies that are required to submit financial statements to the CNMI government.

“This report is not just a display of the ongoing process of improving our collections and implementing standards throughout our government, but it demonstrates our commitment to bringing down the deficit and putting the CNMI in a better place financially for the future. This was the leading factor in our report, and it is important that we continue working together to continue this progress. The work is not done. We’re just getting started,” Torres said.

He said the audit findings reveal that the CNMI government has been addressing over-expenditures affecting public health and human welfare and determining the appropriate budgetary levels for the Commonwealth.

“While we agree with the findings, issues such as medical referrals for patients requiring urgent health care not available in the Commonwealth and overtime for salaries of the law enforcement officers responsible for public welfare and safety often require resources beyond what has been budgeted. This has been a historical finding. Fortunately, as our economy continues to improve and investment increases in the Commonwealth, it is anticipated that revenue will continue to rise to address the areas where the Commonwealth often experiences budgetary shortfalls. Additional hiring of law enforcement personnel will also reduce the amount of overtime as there will be more employees working regular hours and sharing the responsibility for our community’s safety,” the governor said.

Secretary Larson said a corrective-action plan was submitted by the Department of Finance in its fiscal year 2019 budget proposal to incorporate new technological systems that can improve inventory and other financial procedures.

“The aim of this implementation is to process documents more efficiently, with fewer required human resources, and maintain records to include information such as federal award identification numbers, source of the property, title, percentage of federal participation, and use and condition of the property,” she said. “The goal is a more efficient government, and we are one step closer to getting there. “This will improve the ability of the central government to reconcile records with program managers because a physical inventory of FY 2017 will be coordinated with program managers and Division of Procurement and Supply to address this finding.”

Larson said the establishment of a cash-management plan to consolidate policies and procedures in FY 2016 has been instrumental to the Department of Finance in sustaining its efforts to improve compliance seen in the FY 2017 audit.

Compared with the FY 2016 and FY 2015 audit findings, she added, the FY 2017 findings are a great improvement.

She noted that the 2017 financial reports also show that the Saipan casino and electronic-gaming industry have a positive effect on the economic and financial well-being of the CNMI.

“We continue towards fiscal year 2019 with a positive outlook, yet we remain conservative as fiscal year 2018 presents areas where we must remain diligent and responsive to changes in the overall economy. As it currently stands, the Consolidated Natural Resources Act (U.S.P.L. 110-229), will greatly reduce the CNMI workforce in 2019. The CNMI government, alongside the private sector, has made great progress in addressing the need to increase the labor pool. The CNMI is optimistic that the recent economic and social progress will continue for the residents of these islands,” she said.

Copies of the FY 2017 Single Audit Report are available online at www.opacnmi.com