The CNMI Public School System expects to incur some $7 million in funding shortfall this fiscal year if the central government fails to give it the money it needs for the mandated maintenance-of-effort requirement, according to PSS officials.
In a meeting yesterday, PSS officials also disclosed the itinerary of visiting U.S. Department of Education officials Christine Jackson and Mark Robinson next month.
Jackson and Robinson will be on island on Aug. 17 and 18 to talk with the Fitial administration about the unmet maintenance-of-effort rule, which is a requirement of the $32.4 million State Fiscal Stabilization Fund awarded to PSS two years ago.
The maintenance-of-effort rule means that a state’s budget for education must be at least a certain percentage of the entire state government's budget.
Saipan Tribune learned that the central government still owes PSS about $4.5 million for the maintenance-of-effort requirement covering fiscal years 2010 and 2011.
PSS acting finance director George Palican reported yesterday that the system projects a $7 million funding deficiency until Sept. 30. For personnel costs alone, he said that PSS has spent in excess of $3.8 million, while remaining expenditures have a shortfall of $3.2 million.
To address the projected shortfall, Palican said that PSS will continue its discussion with the central government on the unmet MOE as well as the unremitted appropriations for prior years. He did not elaborate.
Education Commissioner Rita A. Sablan told Saipan Tribune that PSS has a little over 900 employees, including about 300 federally funded personnel. Of that number, teachers and instructors alone total about 400.
She admitted that, since the beginning of the fiscal year, PSS had expected to incur this shortfall due to the unmet maintenance-of-effort requirement. She remains hopeful, however, that with the ongoing conversation with Lt. Gov. Eloy S. Inos, the funding deficiency will be addressed.
With its limited budget, Sablan said it will be difficult for PSS to satisfy all its obligations such as retirement contribution and utilities-among its biggest expenditures.
According to Sablan, no federal funds will be tapped to supplement the expected shortfall and they're counting on the remittance of the remaining maintenance-of-effort funds still owed.
“We have an ongoing conversation with the lieutenant governor about closing the gap in terms of MOE and I am very pleased with that conversation,” she said.
This fiscal year 2012, PSS is only budgeted $30 million for its personnel and all other expenses. Because all state fiscal stabilization funds expired in September last year, education officials said the unremitted MOE will help the system pay for its personnel and utilities.
It was earlier learned that the system is only sure of getting over $30 million in federal assistance this fiscal year 2012-a consolidation of all its regular grants every year.
Besides the unremitted maintenance-of-effort funds, the central government also owes the system some millions of dollars dubbed as “rollover” funds from previous years. The rollover funds represent unremitted budget allotments in fiscal years 2010 and 2011. Saipan Tribune learned that in the last two fiscal years, federal funds made up for the shortfall in the local budget.