The report stated that the casino commission management is unable to determine whether the lease agreement “is of similar terms and conditions that would prevail in arm’s length transactions.”
According to the report, the transaction may not be in compliance with accounting principles generally accepted in the U.S.
The report recommended that the casino commission await the results of an investigation, “if an investigation occurs.”
The commission, for its part, stated that it provided the CNMI Office of the Attorney General with information concerning the transaction, “and the proper investigative agency has been provided with information sufficient to begin an investigation.”
No other details about the transaction were mentioned in the report.
Doubt
The report also stated that the financial woes of IPI have “cast doubt on its ability to continue as a going concern.”
The report audited the statements of revenues and expenditures of the Commonwealth Casino Commission for the years that ended Sept. 30, 2018 and 2017.
The report noted that IPI accounted for 96% and 100% of the total casino commission regulatory fees in 2017 and 2018.
Moreover, the economic uncertainties that have arisen as a result of the Covid-19 pandemic are also expected to affect the casino commission finances, the report stated.
Former casino commission executive director Charlie Atalig earlier reported to the commissioners that the final draft audit report “looks good and the commission is expected to receive a clean opinion.”
Atalig also told the commission that in May 2020, it spent $181,455 and around 90% of this amount was attributed to personnel costs and board compensation; 6% for office rental; and the remaining 4% was for utility expenses.
He said the remaining available balance of the commission was around $1,030,661, which, Atalig added, should “get us [through]…November of this year.”
The audit report stated that the casino commission spent $2.9 million of the $3.1 million regulatory fee it collected from IPI in 2018; and $2.8 million of the $3 million it collected in 2017.
