Finance seeks to curb spending abuse

Posted on Dec 30 1998

The Department of Finance has drawn up a package of proposed policies that will cover reimbursements for expenses incurred by government officials in fresh attempts to curb abuse of representation allowance that was prevalent in the past.

The official representation policies and procedures were in response to the recommendation of the Office of the Public Auditor which noted abuses on approval and documentation of “official representation” expenditures in the case of former finance secretary Antonio R. Cabrera.

In a recent OPA report, Cabrera was held liable for mishandling over $100,000 in public funds that covered questionable travel advances and reimbursements of official representation from 1995 to 1997.

Bulk of the amount represented payment for hotel accommodation and purchase of items which should have not been charged to the government account, such as cigars, liquor, shirts, suits, leather accessories, and computer software intended for children.

OPA blamed such abuses on the absence of written policies and procedures to control official representation activities.

In a memorandum to Gov. Pedro P. Tenorio, Finance Secretary Lucy Nielsen proposes that only elected officials are authorized to incur expenses for official representation without prior approval.

They may, however, authorized their staff to incur expenses of this nature provided there is written consent stating the purpose, persons to be entertained and date.

But the guidelines said such expenses should only be allowed on a case by case basis, and that written approvals should be included as part of the supporting documentation for the expenses.

For expenses to be incurred for entertainment and promotions, government employees should specify the persons entertained, the nature of the expense and its direct relationship to the CNMI government as well as the matters discussed. If official representation will involve foreign guests, additional justification is required to explain why such meetings could not be accomplished at government offices during regular business hours.

In case of off-island official representation incurred for companies doing business with the commonwealth, it should also be explained why the persons entertained could not come to Saipan.

However, officials on a daily per diem allowance incurring representation expenses, the value of their meals per entertainment should be deducted from their allowance.

“It is the policy of the CNMI Government that official representation should only occur in dignified establishments which are conducive to the conduct of business matters,” the draft says.

Personal items such as food, clothing and contributions to individuals or “chenchule” are not covered by reimbursements.

Unauthorized and undocumented official representation expenditures will not be reimbursed, and if expenses have been made from government funds, the costs will be recovered through payroll deductions if not paid on a timely manner.

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