OPA, in its newly released joint report with the U.S. Department of the Interior’s Office of Inspector General, said “the 2008 CNMI Single Audit report showed a major increase in audit findings and questioned costs relating to major federal award programs.
In comparison to the 2005 Single Audit, questioned costs increased ten-fold from about $719,000 to $7.2 million for the fiscal year ending 2008 and representing about 11 percent of total federal grant expenditures for the period.”
The report added, “One third of the findings alone were attributed to a lack of documentation relating to grant expenditures.”
A summary of projects from 2004 to 2008 indicated that the CNMI central government was cited for 189 findings and questioned costs involving over $14.3 million federally funded programs.
Autonomous agencies, which were not specified in the report, were cited for 154 findings involving over $2.967 million federal funds during the same period.
“With the release of the 2009 CNMI Single Audit on June 23, 2010, the total questioned costs dropped to $4,817,031; however, total unresolved questioned costs for the central government as of Sept. 30, 2009 amounted to $19,231,826,” the report stated.
It noted that the $92.4 million in ARRA funds provided to the CNMI are susceptible to fraud, waste and abuse because there are not enough internal controls to monitor how they are spent.
OPA and DOI/OIG said the CNMI government should implement precautionary internal audit controls to ensure the protection of ARRA funds.
The report at the same time said insular areas — the CNMI, Guam, American Samoa and the U.S. Virgin Islands — have had difficulty in recruiting and retaining qualified accounting and finance professionals.
“Compared to individual states, the insular areas are smaller in basic population, geographically remote, have reduced political influence with federal agencies, often lack sophisticated infrastructure and communications, lack an economic base and present extremely difficult challenges in recruiting and retaining trained finance or accounting personnel,” it added.
