Tracy Norita
FINANCE Secretary Tracy B. Norita on Friday responded to the inquiries of Senate President Edith Deleon Guerrero regarding government expenditures in the fourth quarter of fiscal year 2023.
Norita said there was no negative balance in fiscal year 2023 spending, and the actual collections did not exceed the revenue forecast.
Last month, the Senate president requested a copy of the general ledger of the CNMI government’s financial transactions. She said based on her review of the financial report for the fourth quarter of FY2023, there was a total of $49.2 million in “negative expenditures” involving 67 government activities.
In her letter on Friday, Norita explained that since the government transitioned into the Munis financial management system, Finance has been experiencing certain limitations when producing specialized financial reports.
The system prior to Munis, Norita said, was only capable of generating a year-to-date or YTD or cumulative expenditures (carry forward balances from previous quarter.) Subsequently, in order to present quarterly reports of the general fund to stakeholders, Norita said Finance included manual (non-system generated) adjustments in the process.
Specific to the presentation of the fourth-quarter report, the YTD column reflects the total expenditures and obligations as of September 30, 2023, Norita said. In recognition of the previously submitted expenditure reports for the first, second and third quarters of FY 2023, Finance included necessary year-end adjustments in the fourth-quarter activity column in order to be consistent with the system-generated YTD figures, Norita added.
She said these adjustments created “negative balances” observed in various departments. These “negative balances” primarily stemmed from expenditures incurred in prior quarters, which Finance reclassified as alternative funding sources identified by the agencies.
Some of the negative balances, she added, resulted from reimbursements received from the Federal Emergency Management Agency for disaster expenditures from both the prior year and the current year.
Norita said Finance continues to revamp its process to ensure that its reports reflect a consistent presentation of government expenditures.
“Overall, the year-to-date expenditure report as of September 30, 2023, does not have a negative balance,” Norita said.
As for the $4.7 million in Small Business Credit Initiative “recycled funds,” she said these were returned to the general fund “per U.S. Treasury guidance.”
She cited Governmental Accounting Standards Board Statement 11, which considers “recycled funds” as government fund revenue.
Norita said the Medicaid grant close-out also provided a reimbursement of approximately $3.2 million to the CNMI general fund.
These funds are presented as miscellaneous revenue in the forecasts, annual budget submissions, and general fund quarterly reports, Norita said.
She added that these miscellaneous revenues are treated as general collections used towards appropriated expenditures, such as payroll, employee benefits, and other programs.
Norita said the overall FY 2023 gross actual collections reports still recognized a shortfall of $313,310. Thus, the Department of Finance “maintains its position that the actual collections did not exceed the forecast revenue estimates for supplemental appropriations,” Norita said.
