‘Close to $30M in debt to vendors is scary, baffling’

The fact that the CNMI has close to $30 million in outstanding debt to vendors is a scary and baffling thought to Gov. Arnold I. Palacios.

Speaking at a press briefing in the governor’s small conference room last Monday, Palacios said “it’s crazy” to owe vendors that much considering that the CNMI had $600 million in federal funds.

“It baffles the mind, really. But that’s the situation we’re in,” he added.

The governor talked about how much the government owes its vendors in response to a question about what the administration is going to do with the Federal Emergency Management Agency’s recent announcement that the CNMI will be receiving $9.8 million in reimbursements for expenses incurred in responding to the COVID-19 pandemic.

Delegate Gregorio Kilili C. Sablan (D-MP) had disclosed over the weekend that the $9.8 million reimbursement covers $8,016,548 for expenditures related to building the Alternate Care Sites and the remaining $1,788,972 is for expenses related to COVID-19 testing. The CNMI built two ACS at the height of the pandemic: one at the parking lot of the Commonwealth Health Center and another at the former Kanoa Resort.

Palacios said they have already been paying a certain amount upfront for the ACS, so the incoming funding will be either for some of the amount that they have not fully paid yet.

He said he specifically asked Finance how much they paid for the alternate site at Kanoa Resort over that period and how much they still owe the hotel.

The governor said some of the money that FEMA reimbursed might have to go back to the general fund.

He said they were able to accelerate the contracting of a single audit with Ernst & Young for fiscal years 2021 and 2022.

“What all those audits are going to reveal is something that we look forward to finding out,” the governor said.