Sen. Maria T. Pangelinan, however, said the CNMI received the cover-over funds in two payments — the first amounted to $24 million, which the governor used to pay for rebates last year, while the second totaled $17.2, which offset the government’s deficit in FY 2008.
“There are no ‘missing’ cover-over monies,” said Pangelinan, D-Saipan and chairwoman of the Senate Fiscal Affairs Committee.
“The first $24 million was considered a special revenue and went into the rebate trust account,” she said. “The $17.2 million was appropriated by the Legislature to be applied to the FY 2008 deficit…. The $24 million was never appropriated because it went into the trust account before we even discovered that it was received. However, the taxpayers were able to get their refunds for FYs 2007 and 2008 from the $24 million and current tax rebate funds accruing.”
According to law, she said, at least 75 percent of all cover-over funds are mandated to be deposited in the rebate trust account.
“The governor is complying with that law,” she added.
But Pangelinan said she still asked the Department of Finance to provide a more detailed accounting of how the $17 million was applied to retire the deficit in FY 2008.
In separate interviews yesterday, Gov. Benigno R. Fitial and Lt. Gov. Eloy S. Inos said there was no misreporting of cover-over funds.
“Eloy had a meeting with them about this,” the governor said.
“I really don’t know why that’s an issue. The pertinent leaders of the Legislature were fully briefed about the cover-over funds,” said Inos.
“The $24 million of the more than $41 million cover-over funds were transferred to the rebate trust account and we’re continuing to use it to pay for taxpayers’ rebates. This is a continuing thing under 1 CMC 1711,” he added.
Cover-over funds are federal taxes collected from CNMI residents. Under the islands’ Covenant with the U.S., these monies should be remitted to the commonwealth.
