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Saturday, April 19, 2014

External audit issues ‘clean opinion’ on CPA’s finances
Operating revenues up 7 pct.; continued increase predicted in FY 2013’

The Commonwealth Ports Authority was given a clean bill of health by an independent audit company, which issued an “unqualified” audit opinion for CPA covering fiscal year 2012.

Based on the newly released audit documents, CPA’s combined operating revenue for airport and seaport operations increased by $1.189 million in fiscal year 2012, a growth of about 6.9 percent.

From the $17.227 million combined operating revenue recorded in fiscal year 2011, the next year showed CPA’s income going up to $18.416 million.

For the airport division, CPA saw an increase of 13.5 percent in revenue equivalent to $1.475 million. This, after the division posted a total of $12.350 million in fiscal 2012 compared to $10.875 million in fiscal 2011.

Meantime, the seaport division saw a decrease of 4.8 percent in its operating revenue. Seaport revenue was at $6.065 million in fiscal 2012 against $6.3 million in 2011. This reflects a decline of $287,291.

According to the audit report, the airport aviation revenue grew by $879,297 because of increasing airport traffic. The airport division was in compliance with its bond indenture for fiscal 2012 and expects to remain in compliance with the agreement in 2013.

However, the seaport division shows a $186,621 decline in seaport fees in fiscal 2012 due to a decrease in outbound revenue tonnage. Despite this, the seaport division was in compliance with its bond indenture agreements for fiscal 2012 and, like the airport division, it is also expected to remain compliance in fiscal 2013.

The demise of the CNMI’s garment industry caused a permanent loss of this important revenue base, as reflected in the steep decline in seaport gross revenue tons. For the airport, revenue has risen due to an increase in passenger arrival and departure activities.

Based on the audit, air passenger departures increased by 25.7 percent and air passenger arrivals grew by 18.1 percent in fiscal year 2012.

That year, the number of deplaned passengers on three islands totaled 499,000, compared to fiscal 2011’s 422,412; while enplaned passengers for the same fiscal year totaled 572,435 compared to FY 2011’s 455,405.

CPA, it was reported, was also able to generate sufficient revenues for the airport to meet the bond ratio after the U.S. Federal Aviation Administration allowed the passenger facility charges to be considered as revenue for this purpose.

Meanwhile, CPA’s combined operating expenses for both airport and seaport operations increased by 4.8 percent, or by $650,228, from $13.304 million in fiscal year 2011 to $13.954 million in fiscal year 2012. This was due to increased utility charges, according to records.

“The CPA 2013 combined revenue forecast indicates a substantial increase of $500,000—or about 3 percent from FY 2012. The airport aviation traffic for 2013 is forecasted to increase substantially due to new airlines serving the CNMI. The seaport gross revenue tons for FY 2013 is forecasted to be slightly less than the FY 2012 level. Overall, seaport revenues are projected to be about 7 percent less than the amounts in FY 2012,” stated the audit report.

On internal control and compliance, the auditor indicated only three findings but no questioned costs.

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