AS a concerned CNMI resident, we all have to be aware that including federal programs and federally funded staff in CNMI’s austerity measures creates serious risks — financial, legal, operational, and reputational. Consequences:
1) Financial Risks
Loss of Federal Funding. Most federal grants require strict compliance with approved budgets and staffing. Cutting hours, salaries, or positions of federally funded staff violates grant agreements, leading to suspension or termination of funding.
Repayment Obligations. The CNMI government could be forced to repay millions in misused or noncompliant federal funds if austerity measures alter how funds were intended to be spent.
Reduced Access to Future Grants. Federal agencies may view CNMI as a high-risk grantee, limiting future funding opportunities or placing CNMI under stricter oversight. This is already compounded with audit findings.
2) Legal & Compliance Risks
Violation of Federal Grant Terms. Each grant has legal conditions. Any unilateral changes to salaries, benefits, or staffing without federal approval could constitute a breach of contract.
Employment Law Conflicts. Federal employees (even if administered locally) are not subject to local austerity directives. Forcing cuts may lead to wrongful labor practice complaints, lawsuits, or federal intervention.
Audit Findings & Sanctions. The U.S. Office of Inspector General or GAO may flag CNMI for mismanagement in annual audits, resulting in sanctions.
3) Operational Risks
Program Disruptions. Many federal programs provide essential services — environmental protection, public health, education, disaster response, and law enforcement. Cutting federally funded staff disrupts these services, undermining both local communities and federal trust.
Staff Attrition. Highly skilled federally funded staff may leave, creating brain drain and weakening program capacity.
Duplication of Cuts. Federal programs are already funded externally, so cutting them doesn’t save CNMI money — it only cripples program delivery.
4) Political & Reputational Risks
Loss of Federal Confidence. The U.S. government may perceive CNMI as unable to responsibly manage federal funds, inviting more direct federal oversight.
Impact on Local-Federal Relations. This could strain CNMI’s relationship with federal partners such as USDOA, USDOJ, USDOI, NOAA, USEPA, and USDOE, etc. harming future collaboration as well as talks of federal takeover.
Public Backlash. Residents who depend on federally funded programs (businesses, health care, education, conservation, social services) will feel the impact, fueling public distrust in government.
In summary
Applying austerity to federally funded programs does not actually reduce the CNMI government’s expenses, but instead risks losing federal money, breaking grant agreements, crippling essential services, and damaging the Commonwealth’s reputation and credibility with U.S. agencies.
Who should the people blame? Is it too late? Is the governor listening and aware? Is the Senior Policy Advisor aware? Is the Secretary of Finance aware? Is the office of management and budget aware? Are the legislative members listening and aware?
Let’s pray and hope!
FRANK MANGLONA
Dandan, Saipan