CNMI Treasurer Asuncion Agulto appears before the Senate special committee investigating the $225 million American Rescue Plan Act investment account in the Bank of Guam.
THE CNMI government’s expenditures of American Rescue Plan Act funds starting in 2021 were “all over the place,” CNMI Treasurer Asuncion Agulto told the Senate special committee looking into the $225 million in ARPA funds deposited in the Bank of Guam.
She said the CNMI government is still “reconciling” its ARPA expenditures.
She added that the ARPA funds deposited in the bank earned interest amounting to $728,000.
She said when the Commonwealth government received a total of $481.1 million in ARPA funds in 2021, the CNMI Treasury was responsible for recording and transferring the monies to the general fund.
She said subsequently, they moved the ARPA funds to a federal fund account because “that was where the money was supposed to be sitting,” she added.
But Agulto said the ARPA monies obligated and allocated to different agencies were not properly recorded.
She said if the previous administration had “done it right, we would know how much really the … balance is.”
But now, she said, “we are making the entries. Unfortunately, it is taking us that long because it’s all over the place.”
Agulto also provided the special committee a flash drive containing all the records pertaining to ARPA spending since 2021.
Senate Floor Leader Corina Magofna asks a question regarding ARPA funds during a hearing on Tuesday.
The special committee’s vice chair, Senate Floor Leader Corina Magofna, asked Agulto if there was a conversation between her and then-Finance Secretary David DLG Atalig regarding the proper recording of the ARPA expenditures.
Agulto said, “Unfortunately I was not … involved in those discussions.” She said Atalig told her verbally that they were expecting $481.1 million from the federal government, “and that was basically how it all started.”
She said she was not provided a spending plan.
Agulto said she kept her own record “because what was supposed to happen wasn’t happening.” A bank account was set up, she added, “but the expenses were not in the same account.”
Magofna asked, “Are you saying that the transactions were not properly recorded?”
Agulto said, “I would think so, yes.”
She said the ARPA funds were being spent with the understanding that they would be recorded by the Finance secretary’s office.
“That’s was not my role … so I started … to record it myself personally, just to keep track so that when they are ready, we have that information,” Agulto said.
She said she repeatedly brought up her concerns with the former Finance secretary, who promised her that proper recording “will be done.”
Agulto also described as “chaotic” the migration of the CNMI government’s financial records from the JD Edwards to the Munis systems. She said the CNMI received the ARPA monies at the time when the Commonwealth was changing its financial system.
The special committee chairman, Sen. Karl King-Nabors, mentioned the reduction of government work hours and the 500 ARPA-funded employees who were “let go” at the beginning of the Palacios administration.
He said an Open Government Act request was made to the Finance secretary’s office to obtain more information about the expenditure of ARPA funds.
He said the Finance secretary responded by asking for more time, but there was no clear indication as to when the committee can receive the requested documents.
He said the special committee has decided to proceed “down this path to get a better understanding of what the paperwork was, and to provide the people an understanding of the true balance of ARPA funds and some liquidation of finances that brings us to where we are today.”
A daunting task
Finance Secretary Tracy B. Norita, who served as Revenue and Taxation director in the previous administration, made the following opening statement:
“I am here today in support of … CNMI Treasurer Ms. Asuncion Agulto, known by many as Connie. In her capacity as Treasurer she has served multiple administrations and secretaries of Finance. I’ve worked alongside Connie for the past 10 years and in my decade of experience working with her, I’ve known her to be a hardworking, committed, and professional finance officer — a true public servant.
“The ARPA reconciliation was and still is a daunting task. To give you an idea of the amount of work my staff and the fiscal response team has been working tirelessly to reconcile the ARPA funds, if I were to print out the identified transactions, it would print to approximately 3,000 pages. The bulk of these transactions [wasn’t] there last year. Some didn’t exist and required proper entry into the system.
“Over the past 12 months, our team at DOF, alongside [the] Office of Management & Budget, the Public Assistance Office and [the] CNMI Homeland Security Emergency Management have been working tirelessly to identify these transactions and putting the pieces of the puzzle together because we share the same desire to be in compliance with the law and properly report to the U.S. Treasury and have the CNMI be accountable for its expenditures.
“Our treasurer, Ms. Connie Agulto, has played an instrumental role in helping our team put [the] pieces of this huge puzzle together. Without her help, background knowledge, and personal tracking record of payments made with improper bookings, we will be nowhere near the level of progress you see today. She kept notes and records of these transactions, believing that one day it could prove useful to an auditor or investigator but mostly because she was given assurances by former Secretary David Atalig that the transactions would be fixed and ultimately booked; however, that was not the case and [it] never happened.
“In the past administration, the former Secretary of Finance did not take heed [of] Ms. Connie’s warnings and made decisions against our Treasurer’s advisement, resulting in payments lacking documentation and proper entry into the financial system. The standard accounting practices were disregarded and the ‘exception’ became the standard.
“It has taken a whole team many months and hard work to correct these mistakes and restore the integrity of our financial records. Our immediate focus and attention is directed towards the recoupment of ARPA funds and full obligation of the recouped funds before the deadline of December 31, 2024. Otherwise, the CNMI will be liable for these funds and the impact on other existing federal grants could be severe. The clock is ticking and time cannot be wasted.
“So, in the spirit of cooperation and partnership, I extend a working hand to this committee to resolve any questions it may have and welcome your available resources to continue and expedite the work so the CNMI can reduce its potential liability on the funds that remain to be recouped. You are welcome to work with our assigned staff, schedule working meetings to analyze the data, create statistics and help us refer questionable findings to the Office of the Public Auditor and the Attorney General for further investigation.”
