While personnel wages and salaries of the Settlement Fund increased by $141,008 from fiscal year 2013, the Fund was able to reduce the overall administrative expenses by 17.85 percent, according to Fund trustee Joyce CH. Tang.
In her supplemental report and response filed in federal court early this week, Tang said the Fund’s budget for wages and salaries in fiscal year 2014 is $898,082, compared to $757,074 in fiscal year 2013—an increase of $141,008.
Tang said, however, that overall administrative expenses for fiscal year 2014 is $1,947,352, much lower compared to $2,370,391 in fiscal year 2013—a reduction by $423,039 or by 17.85 percent.
In the CNMI government’s response to Tang’s Feb. 12 report, assistant attorney general Reena J. Patel objected to Tang’s alleged incorrect calculation of employer contributions as well as an unjustified proposed increase in wages and salaries.
Tang explained that the increased personnel expenses resulted from the overtime employees incurred in the first quarter (October 2013 to December 2013) to cover Public Law 17-82 disbursements, and other support provided by the Settlement Fund to the government.
The other causes for the increase, she said, are reclassification of certain employees’ positions pursuant to NMI personnel regulations based on an earlier desk audit of positions and raises approved by then-trustee ad litem for certain employees prior to the settlement in Betty Johnson’s class action.
“In reviewing the raises after the settlement, the Settlement trustee notes that the employees of the Fund were working under enormous stress, in a highly contentious, often hostile environment, for the period leading up to the settlement.
Tang said none of the managers who worked overtime for the months leading up to the approval of the settlement agreement and after the Settlement Fund came into being received overtime pay.
Tang said that Fund employees frequently worked between 50- to 60-hour weeks from September 2012 to November 2013, to meet the demands of calculating and distributing the Public Law 17-82 payments for over 1,700 employees, to effectuate the transition of the Settlement Fund, and to perform the many responsibilities undertaken by the Settlement Fund on behalf of the NMI Retirement Fund.
Tang said there was concern that without a small increase in wages or reclassification, the Settlement Fund was going to lose seasoned employees at a critical period of the transition.
“Under the circumstances, the reclassification and raises appear to have been earned,” she said.
On the issue of inaccuracy, Tang said since the filing of the trustee’s report, the Settlement Fund and government have worked to resolve this matter.
She said the government has provided up-to-date earnings information that she did not have when the report was filed.
Tang said since the Settlement Fund does not have the actual earnings for a current pay period, it can only estimate the amount of the employer’s contribution.