THE Office of the Public Auditor says the independent contracts of two special assistants of Gov. Juan N. Babauta are not consistent with the law.
In a five-page June 11 report released by Public Auditor Michael S. Sablan to House Ways and Means Committee Chairman Stanley T. Torres yesterday, OPA found irregularities in the execution of Adam B. Turner and Charles D. Jordan’s independent contracts.
The two were hired by the governor as policy consultant and special assistant for capital improvement project management.
Torres, R-Saipan, said yesterday that OPA’s report convinced him to “seriously consider eliminating the budget for the two special assistants.”
“Abuse and misuse of public funds should not be tolerated. No one should be exempted from following laws, poor or rich, weak or powerful. My committee will definitely take action to rectify this matter,” said Torres.
Turner and Jordan were unavailable for comment.
OPA said Turner’s services, which were procured under a sole source agreement, do not include a memorandum of letter “justifying the use of sole source selection” that should have come from the governor as the official with expenditure authority.
“Rather, the contract in the method of selection section reflected a check mark in the line for sole source and a hand written note that (it) was issued pursuant to the CNMI Procurement Regulations,” the report stated.
OPA said while Turner’s selection conforms to the requirements of the regulations, it should have a “more detailed statement explaining the use of (independent contracts for policy consultants).”
Jordan’s contract was also approved through sole sourcing. The report noted that his services “do not fall within the exemptions to the justification procedures” provided in the procurement regulations.
OPA also found that Babauta’s justification for Jordan’s sole source selection “does not contain two elements required in the regulations stating that specific efforts were made to obtain competition and what other specifically named contractors or other sources, both on-island and off-island, have been considered and why they were not selected.”
OPA said Turner’s appointment as executive director of the Commonwealth Telecommunications Commission is “problematic.”
“This language is in conflict with the intention of the CTC Act…which states that the commission shall have an executive director who shall be appointed by and serve at the pleasure of the commission,” OPA said.
Also, it said the law prohibits a CTC executive director from receiving a salary exceeding $70,000 per year. Turner’s contract states that he will receive an annual salary of $88,000.
OPA cautioned Turner from taking action as executive director or as acting executive director of the CTC “unless he is formally appointed by the commission, as any such action would be in violation of P.L. 12-39, section 8311.”
OPA said Turner and Jordan have no legal contracts to enter into an independent business with the government.
As of April, OPA said neither Turner nor his business “Adam B. Turner Consulting” had obtained a business license as required by law for independent contractors.
OPA said it recently had discussions with Turner regarding the issue and he stated that “he was working to resolve (it) and would be providing paperwork to confirm resolution of the matter.”
OPA also raised concern “with the policy and propriety issues” related to the government’s decision to provide Turner with housing allowance—worth $650 monthly—or a residence business that is providing service to the CNMI.
It also found that there were some “inconsistencies” with respect to Jordan’s business license.
“While the contract is entered into with Charles D. Jordan, the business license attached to support the contract is for C.D.J & Associates,” OPA said.
OPA said an individual or entity found violating business licensing requirement will be subject to a penalty of $500.
The agency suggested that these inconsistencies “be remedied to ensure that proper taxes are paid.”
OPA noted that if the definition of “employee” applies to independent contractors under the Compensation Adjustment Act, compensation paid to contractors that exceeds the cap “would have to obtain legislative approval.”
Turner’s annual compensation is $88,000 while Jordan’s is $100,000.
