CPA, the report added, also failed to implement strict and proper procedures to recoup unearnedtravel advances and implement procedures to monitor outstanding travel advances. Moreover, it did not strictly enforce the agency’s policies and procedures.
In its report dated March 23 and addressed to CPA Executive Director Edward M. Deleon Guerrero, who was appointed to his post in Dec. 2009, OPA noted that 93 percent or about $179,000 of trips reviewed were not adequately supported.
According to OPA, travel vouchers were not submitted timely, outstanding travel advances were not tracked, travelers with outstanding travel obligations were not denied subsequent travel advances, payroll deduction was not initiated for employees with outstanding travel obligations, and unearned per diem was uncollected from traveler.
OPA’s audit also showed that CPA’s travel records and documentation were not properly maintained.
“For example, (a) receipt of travel vouchers was not always documented, (b) travel advances in the books were not always timely liquidated, and (c) employee receivables were poorly tracked. In addition, CPA…adopted policies and procedures that contributed to higher travel costs. These include (a) higher per diem rates, (b) per diem advanced at 100 percent, and (c) per diem paid for flight time. In addition, OPA found one instance where reimbursement was claimed for a nonrevenue airline ticket and may be questionable.”
OPA issued nine recommendations, seven of which are considered “closed,” while the other are now “resolved.”
A “closed” recommendation is “one in which the client has taken sufficient action to meet the intent of the recommendation or [OPA has] withdrawn it.”
A “resolved” recommendation is “one in which the auditors are satisfied that the client cannot take immediate action, but has established a reasonable plan and time frame of action.”
The audit was requested by CPA in Oct. 2006 but was started only in early 2008.
When the review started, OPA said, “CPA was without its key financial managers.”
Before the appointments of a new executive director in Nov. 2008 and a comptroller in Feb. 2009, OPA said the two positions were vacant or occupied by individuals in acting capacities for about two years.
“Due to a high turnover in management at CPA and other duties assigned to the auditor-in-charge, OPA was not able to complete the audit as scheduled,” the report stated.
OPA said if CPA management and board “should continue to be noncompliant with regulations, employee morale and the ‘tone at the top’ could be affected.”
Citing the CNMI’s economic conditions, OPA said “it is necessary that cost-cutting measures be adopted to meet current obligations and ensure the upkeep of [CPA] facilities and operations. For this reason, potential savings should be derived where possible, including keeping travel costs at a minimum.”
Within 30 days of receiving the report, CPA must provide OPA “with an update on the status of the resolved recommendation and provide documentation showing specific actions taken.”
CPA is a public corporation responsible for the operations, maintenance and improvement of CNMI airports and seaports. It is run by a seven-member board of directors appointed by the governor and confirmed by the Senate. The executive director, who is CPA’s chief executive officers, serves at the pleasure of the board.
To read the OPA cover letter and report, go to http://www.opacnmi.com/sites/default/files/reports/audit/AR-11-01.pdf
