“I want to reiterate the serious consequences articulated in the March 30, 2010 teleconference. If the department determines through monitoring or an audit that the CNMI is failing to meet its fiscal obligations, including failing to meet the [Maintenance of Effort, or] MOE, waiver requirement, it will take appropriate enforcement actions against CNMI,” Conaty wrote to Fitial on April 12.
“Such actions may include, among other things, the disapproval of your application for SFSF phase two funding or the recovery of SFSF funds previously awarded to the CNMI. Any action that reduces the percentage of total non-federal revenues spent on education in FY 2010 below 26.68 percent spent in 2009 makes CNMI ineligible for an MOE waiver and jeopardizes its entire SFSF allocation,” he added.
PSS was budgeted for $37.2 million in FY 2006. This went down to $36 million in FY 2008 and to $32.491 million in FY 2010 under the continuing budget resolution.
PSS said the actual budget it received for FY 2010 was $31.4 million only.
The austerity measure, House Bill 17-45, seeks to reduce the work hours of all government personnel by one hour everyday which will cut their biweekly payroll to 70 hours instead of 80.
The bill remains pending in the Senate.
Conaty said the CNMI indicated it was unable to maintain the required levels of local support for education for fiscal years 2009 to 2011, but it can still meet the MOE waiver.
But Conaty said the austerity reduction will further reduce PSS budget which will then fall below the minimum allowable 26.68 percent non-federal revenue requirement.
This will make the CNMI ineligible for the MOE waiver, he added.
“Recent actions by the CNMI Legislature…raise serious concerns regarding CNMI’s ability to meet the waiver criterion,” Conaty told Fitial.
“I do not underestimate the current fiscal challenges and pressures that exist in the CNMI and around the country. Many difficult and hard choices must be made. However, it is our joint responsibility to support a high quality education for every child that prepares them to succeed in college and the workplace in order to ensure our nation’s future prosperity,” Conaty added.
