McPhetres questions NMC budget cut

The House committee on Health, Education and Welfare yesterday resumed its oversight hearing on the financially-troubled Northern Marianas College, investigating into management and personnel policies as well as its autonomous functions as mandated under the laws.

The panel, chaired by Rep. Heinz Hofschneider, noted inconsistencies in the college policies as it asked NMC officials to hand over several documents, including salary structure of employees and an opinion from its former legal counsel clarifying its status as autonomous government agency.

Among these included spending authority on donations to the college, conversion of “short-term” employees to full time without advertising the position, a multi-scale pay plan and disbursement of revenues from tuition and fees.

But the hearing, the second in a series of House oversight on the state college and the government scholarship program, has yet to pin down what maybe the reasons for the fragile financial shape of NMC that has been dogged by cash flow problems in the past few years.

Manuel Sablan, chair of the college board of regents, admitted there are gray areas in the mandate given to NMC under the Constitution, saying that despite the autonomy, they have yet to achieve financial independence.

Most of its budget are appropriated by the legislature, while some funds are drawn from tuition and fees as well as from federal grants and private donations.

NMC President Agnes M. McPhetres, however, questioned the recent slash in its appropriations recently implemented by the Tenorio administration on the heels of further decline in government revenues this year.

“Is the 13.4 percent cut in keeping with the law,” she asked, citing that NMC is given fiscal autonomy to handle its own funds.

Hofschneider argued that since lawmakers allocate public funds, they have the authority to change the spending level and amend statutes created for the college.

NMC officials warned the drastic cut is threatening its accreditation as some programs are at risk of losing necessary funds to continue offering them to their students.

To keep up with the standards set forth by the California-based Western Association of State Colleges and Universities of which NMC is an accredited member, they are restructuring the college and trimming down expenses so as not to jeopardize degree programs.

The accreditation is a requirement to be eligible for financial assistance from the federal government, McPhetres pointed out.

Funds inquiry: College comptroller Lawrence Harris was summoned at yesterday’s hearing which drew thinner crowd, mostly NMC officials and staff, than the previous hearing held last week.

Asked to swear before the Bible, Harris testified that he has yet to come across reprogramming of funds contrary to existing policy of the college since taking the helm over its financial records in 1996.

NMC officials also claimed they comply with the provision of the funds sourced from nonresident workers’ fees which are used specifically for training and vocational programs of the college.

Each year, some $1.3 million are set aside by the legislature from these revenues, and Hofschneider questioned the board’s policy on the proceeds of these funds during the hearing.

A board regent said they have no policy on this aspect because they are allotted by the legislature with specific purpose.

Donations and endowment funds were also questioned during the five-hour hearing, focusing on who has the spending authority. The president takes custody of the financial records with oversight mechanism from the board, Sablan pointed out.

The panel asked NMC to provide the requested documents by next week, while the oversight hearing will resume on February 17.