THE House of Representatives has passed House Bill 23-56 which would tap 60% of the indirect cost revenue or reimbursement to address the CNMI government’s financial deficit.
All 17 House members present voted to pass the bill, which was authored by Rep. Blas Jonathan Attao and now goes to the Senate.
House Floor Leader Edwin Propst, Reps. Vincent Diego F. Camacho and Julie Marie Ogo were excused.
Indirect cost reimbursements are grant monies the CNMI receives from the federal government to cover the local funds that the Commonwealth government initially spent for a federally funded project.
According to H.B. 23-56, indirect cost reimbursements from grants “provide a source of money for paying down our budget deficit.”
The bill states that 40% of indirect cost reimbursements are directed to the Office of Grants Management. The remaining percentage (60%), is not currently directed for any specific program, the bill added.
Prior to the roll-call vote, Attao said when the Office of Grants Management was created by Public Law 19-49 in June 2016, the new office was able to secure additional federal funds for the CNMI.
Unfortunately, he said, “what we didn’t realize back then, was that only 40% of those monies were being used.” The whereabouts of the other 60% were unknown and were never remitted to the Legislature for appropriation purposes, Attao added.
The intent of H.B. 23-56 is to make sure that those funds will be used to address the CNMI government’s budget deficit, he said.
He said the more grants the CNMI government gets, “the quicker we pay out these deficits that we have been inheriting over the last couple of years.”
Should the CNMI “exhaust” its financial deficit, future members of the Legislature can revisit the statute to address other pressing needs that the CNMI government may face in the future.
Attao thanked his colleagues for acting on the bill. “As we all know, we are facing a lot of financial challenges in the CNMI, and if we don’t start addressing those financial challenges, our deficit is just going to continue to increase over the next couple of years.”
Rep. Patrick San Nicolas asked if the indirect cost revenue will come from the CNMI general fund.
Attao replied that the bill would not “touch” the CNMI budget.
Rep. Blas Jonathan Attao gestures as he speaks during a House session.
