SHEFA to hold review of alleged mismanagement

The Saipan Higher Education Financial Assistance program will conduct its own review of alleged mismanagement at the scholarship agency.

Felicidad T. Ogumoro, chairwoman of the SHEFA board of directors, said the in-house review will be the agency’s response to the allegations of mismanagement the Office of the Public Auditor outlined in its recent review.

She said SHEFA will gather documents and information to address any discrepancies in the OPA review, and those discrepancies will be detailed when SHEFA submits its response to OPA.

According to OPA, SHEFA has misused public funds through questionable hiring and improper payments to board members.

One finding is that agency hired contractors without following procurement regulations. Both contractors are CNMI government retirees and may have been “double dipping,” or receiving both salary and pension benefits. The two also seem to be doing the same job, OPA said.

OPA also found inadequate documentation to support the payments made to some SHEFA board members. Some board members were compensated for work other than board meetings, and the board did not comply with the Boards and Commissions Reform Act of 2006.

Ogumoro said the agency was dismayed that OPA conducted a review of the program without interviewing any SHEFA board member or the Saipan mayor.

“Every entity and or person, whether they are private or public, will make mistakes. However, organizations and or people must be given an opportunity to respond in order to ensure there are no justifications for allegations prior to being accused for misconduct,” she said in a letter to Public Auditor Michael S. Sablan.

OPA has urged the Saipan and Northern Legislative Delegation to work with House and Senate members on how SHEFA and the CNMI Scholarsip Office could be merged, without getting rid of the separate financial aid program for Saipan students.

Saipan Local Law 13-21, which established SHEFA, initially provided a continuous yearly appropriation of $1.2 million from Saipan poker license fees. This funding was allotted in fiscal years 2004 and 2005.

In October 2004, an additional $150,000 was appropriated for the program’s operational costs. The money was intended to cover operational expenses starting FY2004 until fully used.

In the same month, an additional $1.2 million was appropriated for the “Saipan local scholarship account.”

In October 2005, a Saipan local law increased the continuous yearly appropriation for the scholarship fund from $1.2 million to $3 million, and provided a non-lapsing yearly appropriation of $200,000 for SHEFA’s operational costs.

From FY2004 to FY2006, SHEFA received total allotments of $5.83 million, of which $5.57 million went to financial assistance and over $250,000 went to operations (mostly personnel).