OPA cites gov’t ‘wastes’

Posted on Dec 22 1998

The Office of the Public Auditor has identified more than $23 million in unessential appropriations under FY 1999 budget which the cash-strapped government can either eliminate or curb spending in a bid to boost its shrinking coffers.

OPA chief Leo L. LaMotte said the government stands to save $10 million if it strictly complies with the freeze hiring and deferment of salary raise as proposed last January in the first wave of austerity measures by Gov. Pedro P. Tenorio.

“Due to slowdown in economic activity, government operations may not need the number of (full-time employees) budgeted for fiscal year 1999,” he said in a letter to Rep. Melvin Faisao.

The legislator had asked the public auditor for his comments on how the NMI government can cut down its expenditures without impacting on the delivery of public services.

According to LaMotte, a freeze on hiring to fill vacant positions will not significantly affect government operations as well as reduction on overtime pay which was budgeted at $2.78 million for this year.

“The government should evaluate the personnel needs of all the branches, departments and agencies to determine whether their present workloads justify their existing number of employees,” he said.

“Taxpayers should not be burdened with the salaries of unneeded and unproductive employees,” LaMotte told Faisao.

Government payroll eats up more than 75 percent of the entire yearly allotment to various departments and agencies, equivalent to $184.76 million for the current fiscal year.

At close to 5,000 civil service employees and contractual workers, the CNMI government is the largest single employer on the island.

The public auditor suggested that some functions of the government should be privatized, noting that the repairs and maintenance section of the Department of Public Works will be best handled by private contractors.

“Privatizing would result in cost savings because the government does not have to maintain inefficient and unskilled workers who are paid very high wages and salaries and also receive substantial employee fringe benefits,” LaMotte pointed out.

He also prodded the Tenorio administration to review the operations of some offices, such as DPW and office of the Mayor, which may be overlapping to cut costs.

The governor last month slashed 13.4 percent or some $32.5 million from the $249.26 million spending package approved last September due to continuous drop in actual revenue collections in light of the worsening economic crisis in the Northern Marianas.

To prevent huge shortfall, Tenorio is expected to implement wide-ranging austerity plans in the next few weeks to pull down public spending to some $216.75 million.

Aside from personnel costs, LaMotte also urged a review of other unnecessary expenditures as provided in the fiscal budget that include:

•lease and purchase of government vehicles amounting to $2.13 million;

•acquisition of capital items, such as office furniture and computers, totaling $1.365 million;

•official representation, $1.3 million;

•travel and other trips overseas, $2 million; and

•government utility bills, allotted $4 million, but which the OPA believes is “overcharging” by Commonwealth Utilities Corp. that has pegged the rate at 20 times and 60 times for electricity and water supply, respectively, higher than commercial and residential consumers.

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