Office of Public Auditor legal counsel Ashley Kost, right, looks on as Rep. Vincent “Kobre” Aldan speaks, and Gov. David M. Apatang, left, and Finance Secretary Tracy B. Norita, second right, listen during a press conference last week.
Office of the Governor photo
THE Office of the Public Auditor will address the FY 2021 single audit’s questioned costs, focusing on any that may involve potential criminal violations.
Last week, Gov. David M. Apatang, through Executive Order 2025, tasked OPA, along with the Department of Finance, the Office of Management and Budget, and the Office of Grants Management and State Clearinghouse, with addressing delayed single audits. According to Finance Secretary Tracy B. Norita, such delays can result in grant termination, withholding of fund drawdowns, and designation of the CNMI as a high-risk grantee.
The executive order also established a single audit committee composed of OPA, Finance, OMB, and OGM-SC. Specifically, the order assigns OPA to “conduct or supervise all audits required for or sought by a Commonwealth agency,” including oversight of the CNMI government’s single audit contract, management of the Northern Mariana Islands Retirement Fund audit contract, and project monitoring for component units.
During a press conference on Thursday, OPA legal counsel Ashley L. Kost said they intend to address the questioned-cost findings in the FY 2021 single audit. She noted that if any findings rise to the level of a potential criminal violation, they would be referred to OPA for accountability. However, she added, not all findings indicate criminal activity; some may simply reflect mistakes. “The most important thing,” she said, “is being responsive to those findings so we don’t keep seeing the same issues year to year, every audit.”
The FY 2021 financial statement, prepared by Ernst & Young, noted that under federally funded programs, “cumulative questioned costs of $104,327,082 have been set forth in the CNMI’s single audit report for the year ended September 30, 2021. The ultimate disposition of these questioned costs can be determined only by final action of the respective grantor agencies.”
Norita said that “multiple federal grants,” including those awarded under the Coronavirus Aid, Relief, and Economic Security Act, make up the questioned costs in the FY 2021 audit. The CNMI government received $36.3 million in CARES Act funds in 2021, in addition to over $400 million in American Rescue Plan Act funding to address pandemic-related impacts.
Apatang also told reporters that officials from the Department of the Interior’s Office of Insular Affairs have warned that “we need to fix this issue; otherwise, we risk losing additional federal grants and funding for the Commonwealth and its people, which we cannot afford.”
