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Thursday, April 24, 2014

Feds: Overspending led to food stamp cuts
$4.5M will not be restored for NMI

U.S. Food and Nutrition Services Administrator Audrey Rowe pointed to the CNMI’s own overspending that led to the 13.6 percent food stamp benefit cuts beginning May 1, a piece of information that the public wouldn’t have known if not for Rowe’s recent response to Delegate Gregorio Kilili Sablan’s (Ind-MP) letter inquiring about the benefit cuts at a time when the CNMI needs more aid than ever.

The CNMI government gave more monthly food stamp benefits to every household than was approved by and agreed upon with the U.S. Department of Agriculture’s FNS in the fiscal year 2012 budget.

That’s just one of two bad news about the food stamp program in the CNMI.

U.S. Agriculture Secretary Thomas J. Vilsack, in a June 5 letter to Sablan, said the $4.5 million in de-obligated food stamp program block grant that the CNMI was unable to use from fiscal years 2007 through 2011 will not be restored.

Sablan said it is “painful to see $4.5 million lost because the CNMI did not spend the money to feed needy families.”

“But I applaud the decision to change the MOU [memorandum of understanding] so this situation can be avoided in the future and urge the Commonwealth government to conclude negotiations quickly,” Sablan said over the weekend.

Press secretary Angel Demapan, when asked for comment, said Gov. Benigno R. Fitial acknowledges Vilsack’s decision “and is grateful that USDA has agreed to revisit the MOU conditions to include the flexibility of allowing the CNMI to access grant funds beyond the initial grant year.”

“Since his meeting with FNS Administrator Audrey Rowe, Governor Fitial is further grateful that the FNS has taken a more active approach toward curtailing the governor’s concerns regarding the need for increased enforcement of food stamp benefits trafficking,” Demapan told Saipan Tribune.

The USDA-funded food stamp program is administered locally by the Nutrition Assistance Program under the Department of Community and Cultural Affairs.

Senate President Paul Manglona (Ind-Rota) said yesterday it’s about time the Fitial administration seriously look into possible mismanagement and incompetence at NAP or DCCA, pointing to the overspending and the de-obligation of $4.5 million in food stamp money that the CNMI did not use for years.


Rowe, in a May 25 letter to Sablan, said the CNMI NAP budget was approved with an average benefit level of $242 per household for fiscal year 2012, an increase of some $42, based on the number of participating households in June 2011.

But the CNMI instead gave an average of $273 per household—some $31 more per household than agreed upon.

Rowe said the CNMI recently advised FNS that the CNMI was again experiencing a budget shortfall and would need to reduce the benefits and/or begin waitlisting eligible citizens.

“It was at this time that FNS became aware that instead of issuing benefits at the $242 level approved in the [fiscal year] 2012 budget, CNMI had been issuing benefits at a higher average level of approximately $273,” Rowe told Sablan.

Rowe also said the average monthly caseload increased slightly from 3,609 households in fiscal year 2011 to 3,649 households in 2012.

Sablan wrote a May 2 letter to Rowe regarding concerns about an announcement of new benefit cuts that the CNMI government instituted.

Rowe, in her two-page response, said the CNMI can remain within budget and serve eligible households, “with an average benefit level of $242, as originally agreed and approved.”

“This level maximizes the benefits of NAP within the current available funding and allows CNMI to serve all eligible NAP recipients,” Rowe told Sablan.

The press secretary said he’s not aware of the methodology that may have been applied here.

“I will discuss this with DCCA/NAP for further clarification,” he said.

The benefit cuts in May was painful for everyone already dealing with work hour cuts, high utility costs, high gas prices and other basic commodities.

Girlie Baloran, 40, said her two children used to receive a total of $121 a month in food stamp benefits, but this was reduced to $80 a month.

“That money is strictly for food, and having a $41 cut is a big loss these days,” Baloran, a single parent, told Saipan Tribune in an interview on Saturday.

Rowe also pointed out that FNS provided budgetary relief to the CNMI in two separate occasions in the last three years.

First, in fiscal year 2009, the CNMI was given a 13.6-percent increase in funding to match the increases provided under the American Recovery and Reinvestment Act to other jurisdictions, including Puerto Rico and American Samoa.

Second, in fiscal year 2012, the CNMI was allotted a one-time funding increase of $1 million. This was in response to the CNMI’s projected shortfall and its actions of cutting benefit issuance to an average of some $200 per household per month, and to eliminate a backlog of “unserved, eligible citizens.”

Decisions to be made

Rowe said FNS will continue to provide technical assistance and work with the NAP leadership to maximize funding and provide a stable benefit to NAP households by developing a plan to more accurately project changes in NAP participation that would impact the amount of the block grant each year.

“Toward this end, CNMI must make appropriate programmatic decisions to remain within the amount of available funding under the block grant,” she said.

Sablan, in a follow up letter to Rowe, asked for more oversight from FNS to avoid a similar problem in the future and suggested that this uncertainty and disruption in families struggling to feed themselves would not happen if the CNMI were in the national Supplemental Nutrition Assistance Program or SNAP.

Manglona echoed Sablan’s sentiment about the advantages of SNAP over the block grant system, which the CNMI continues to avail of.

The Fitial administration does not want the CNMI to go under SNAP, despite Sablan and experts’ insistence that SNAP will bring in more benefits to food stamp recipients of $10 million to $20 million, as well as multiplier effect on the local economy of some $12 million to $24 million.

Gov. Benigno R. Fitial has remained opposed to SNAP because the CNMI has to shoulder 50 percent or $500,000 to $700,000 of the administrative cost, though Sablan and other lawmakers said the multiplier effect on the economy easily makes up for half of the administrative cost.

Manglona said he hopes the governor “does not continue to hold on to block grant only because he does not agree with Kilili.”

$4.5 million de-obligated

Vilsack, in a June 5 letter responding to Sablan’s Feb. 23 letter, said the $4.5 million in de-obligated funds could not be restored.

USDA’s FNS de-obligated the money that the CNMI did not spend because the period of availability for the grant funds, which included balances for fiscal years 2007 through 2011, had expired.

DCCA Secretary Melvin Faisao, back in February when the de-obligation was announced, said the money was reserved and earmarked for an electronic benefit transfer system that the CNMI still does not have even after years of being given the money for it.

Sablan said over the weekend that he asked Vilsack in February to reconsider this decision, “which hardly makes sense at the same time that the CNMI has been cutting benefits, cutting staff hours, and putting eligible recipients on waitlists.”

Vilsack referred the question to his Office of General Counsel, which confirmed that the MOU that the CNMI negotiates with USDA each year limits the food stamp grant to a single fiscal year.

But Vilsack, in his one-page letter to Sablan, said USDA reopened the current MOU to permit a carryover of grant funds beyond the initial grant year.

“We anticipate this language would be included in subsequent MOUs to allow CNMI this flexibility on an ongoing basis. This should facilitate CNMI ability to more fully utilize each year’s funding,” Vilsack told Sablan.

Sablan applauded this, saying that changing the MOU can avoid similar situations in the future.

The press secretary said FNS Deputy Regional Administrator Jesus Mendoza Jr. recently informed the governor that the FNS Regional Office is currently working with DCCA to modify the fiscal year 2012 MOU to allow CNMI access to grant funds for a set period beyond the initial grant year.

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