Millions of dollars could have been added to the current investments of the Marianas Public Land Trust if all amounts constitutionally due it—amounting to over $13 million as of fiscal year 2012—were properly remitted.
This was based on MPLT’s latest analysis of available audit reports of the Department of Public Lands, the agency that handles all public land leases and related revenues due the land trust.
In a memorandum circulated among MPLT board trustees, board consultant Bruce MacMillan disclosed that, using a Supreme Court decision and the Office of the Attorney General opinion, the amount due MPLT as of Sept. 30, 2012, is $5.441 million.
“This represents many years of distributions to MPLT that were withheld going back to the ‘90s when the funds were accumulated at the Bank of Saipan,” MacMillan disclosed in his report.
In addition to this balance, MacMillan reportedly uncovered funds that have been diverted from Marianas Public Land Authority and DPL that should have gone to MPLT—expenditures that do not qualify as “expenses of administration.”
He specifically cited $1 million that the land agency gave CUC for fuel in fiscal year 2005. In fiscal year 2010, DPL also gave the Department of Finance $2.5 million. Both instances were covered under a “state of emergency.”
That same fiscal year, land compensation was paid out totaling $2.2 million ($262,944 and $1.978 million). From June 2010 to September 2012, there was also a duplicate payment to the Retirement Fund treated as a fully reserved receivable, amounting to $1.957 million.
MacMillan indicated in his report that the total potentially due MPLT is $7.699 million on these “expenses of administration.”
“Given that the Supreme Court ruling and the AGO opinion do not allow DPL to withhold funds for future fiscal year expenditures and limits DPL to expend annually only up to its budget appropriation for the year, then a statement of expenditures (actual vs. budget for each year) would be helpful and should be considered a necessary supplemental disclosure given the approved method for determining the annual distribution to MPLT,” states MacMillan’s report.
Still based on the board consultant’s analysis of DPL audits for fiscal years 2011 and 2012, it was found out that DPL has a restricted depository and non-withdrawal agreement with the Bank of Saipan whereby they collect $50,000 per month since October 2004. It has been receiving such payments in the amount of $600,000 per year and this represents accumulated net income from the ‘90s that should have been distributed to MPLT. The balance of this account is $1.969 million as of Sept. 30, 2012.
DPL is also reportedly holding $2.754 million representing Managaha Island landing fees. This is part of the cash balance as of Sept. 30, 2012.
Under CNMI Public Law 18-18, or the Budget Act of 2014, DPL was appropriated $3.260 million for operations and $2 million for homestead development. This exceeds DPL’s estimated revenues for fiscal year 2014, which is likely to be about $3.4 million.
“The question is: can DPL expend funds carried over from prior years due to not making the proper distributions to MPLT? Does the budget act limit them to spend only the revenues received during the fiscal year?” asked MacMillan in his report.