PSS said the release of the report on July 30, 2010 was supposed to give government agencies and entities ample time to institute corrective measures.
However, even prior to the release of the report, PSS said it had already fine-tuned, strengthened and improved its policies on fund use.
“The critical findings on travel, procurement, employment contracts and credit card use of the audit report gave us the opportunity to see what needs to be done with our financial management,” Education Commissioner Rita A. Sablan said yesterday.
“There are areas for improvement and the PSS leadership had been working on it. This is a work in progress for the last fiscal year,” she added.
She said PSS continues to operate and provide services to its almost 11,000 student population and over a thousand employees despite the threat of reduced local funding appropriation.
PSS delivered its mandated services without interruption, she added.
The report revealed how the PSS share of local funding started to dip starting in FY 2005, at $37.23 million. It hit $36.721 million in FY 2007, and further decreased to $35.847 million in FY 2008 until it received local appropriation of $34.601 million in the last fiscal year. For FY 2010, it is pegged at $31 million — the lowest so far.
The audit report said the contribution of local funding to the total funding of PSS varied from 59 percent to 55 percent while the rest was funded through federal monies.
But despite the reduction in its local budget, PSS in 2009 spent $51.095 million of its overall budget, both local and federal, for instruction. In 2008, a total of $49.205 million was spent for the same purpose.
“In my opinion…the financial statements referred to (in the report) present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of PSS as of Sept. 30, 2009 and 2008, and the respective changes in financial position and the respective budgetary comparison for the general (local) fund for the years then ended in conformity with the accounting principles generally accepted in the United States of America,” the independent audit firm said of its report to the Board of Education.
Sablan said PSS is mindful of the independent audit’s recommendation but she maintained that the work performed during the last fiscal year was needed to provide equitable services.
“We are now using the finding to further improve our policies and practices,” she added.
Travel
One of the findings was the volume of travels that were done in the prior fiscal year. PSS said these were mostly inter-island, meaning within the CNMI: Saipan, Tinian and Rota.
The office of the commissioner of education and the Board of Education are encouraging the turn-over/liquidation of travel expenses within the 10-day period upon travel, in a timely fashion.
Since it is within the CNMI, inter-island activities of PSS personnel are considered “commuting” rather than “off-island travel,” Sablan said.
She said they are already strictly enforcing PSS Regulation 3430; Sec. C (8) that requires liquidation of expenses 10 days after the travel was made.
Credit card use
PSS continue to enjoy a line of credit for purchases on instructional materials with the use of credit card, Sablan said.
But the independent audit firm noted that the PSS credit card was used to pay for accommodations and registration for off-island trips in a few instances.
PSS said the federal government has a rigorous travel requirement for ensuring attendance and participation in trainings, conferences, seminars and other federally sponsored events.
PSS said it pre-pays for accommodations and registration for its employees’ off-island travels to guarantee participation.
To ensure prudent spending, the PSS leadership has put in place a policy that strictly mandates immediate reimbursement/payment by deducting from the travel advance for the use of PSS credit card, Sablan said.
Procurement, employment regulations
Long before the independent audit report was released, PSS said its procurement office already instituted strict procurement policy that calls for competitive bidding on all contracts exceeding the $10,000-threshold.
PSS said that as noted by the audit report, prior procurement policy did not require for cost analysis if sole source contracts.
BOE separately said that the increase of salary of the commissioner of education and the legal counsel was sanctioned at a board meeting that came before the 2009 enactment of Public Law 16-32 which restricts salary increases for all government workers.
Sablan said PSS is focused on three key areas: “accountability, responsibility and transparency,” and these are the reasons why improvements in its fiscal affairs have been initiated.
