Norita: Audit’s findings could trigger criminal case

Finance Secretary Tracy B. Norita said Friday that there is always a possibility that a desk audit’s finding of $11.1 million in questioned costs in the CNMI’s use of coronavirus relief funds, commonly known as CARES Act funds, is going to trigger the filing of a criminal case.

In an interview with the media, Norita said this is why they will be working with the U.S. Department of Treasury’s Office of the Inspector General to gather as much information and documentation that they can find. If there is any indication that it should be referred to the Office of the Attorney General, it will be done, she added.

Castro & Company LLC, a public auditing firm in Washington, D.C. that specializes in providing services to the federal government, reviewed and assessed obligation and expenditure data in CARES Act funds for the period of March 1, 2020, through March 31, 2022.

The audit report was transmitted to the CNMI Department of Finance last Wednesday, Aug. 9.

Norita said they will work on clearing the questioned costs and work with the Office of the Inspector General of the U.S. Treasury. “We will provide as much documentation that we can find and we will forward any findings that may come about that to the AG’s office,” she said.

As to the question of what triggered the audit, she said she is unsure about it, but what she knows is that when the new administration came in, the audit had already been completed. “So right now they are just in receipt of the findings,” she said.

Norita said the questioned costs as listed in their press release are those pertaining to contracts above $50,000 and the lack of documentation.

She said the purpose of that funding is mainly for COVID-19 related expenditures.

The secretary said the $11.1 million is a serious and significant amount of total questioned costs that may have grave impacts on the CNMI.

Norita said one consequence is the CNMI’s credibility and also the potential impact for the CNMI to repay those funds.

As to the question of what company or companies could be involved in the questioned costs, the secretary said she does not have the details of the working documents that were used in the audit itself.

“Right now, all the details that we have is what was provided in the press release,” Norita said, referring to the administration’s press release about the audit’s findings forwarded to the media last Thursday.

She said the desk audit report is completed and what is ongoing is the single audit.