NMC overspent funds •College is adequately funded, says Hofschneider

Rep. Heinz Hofschneider, chair of the House committee on Health, Education and Welfare, yesterday fired his most stinging attack so far against the Northern Marianas College over expenditures exceeding the spending level appropriated by the legislature to the institution.

NMC President Agnes M. McPhetres also admitted for the first time of going beyond the budgeted amount in implementing programs, saying they have relied on the “commitment” of government officials promising to infuse more funds into the state college despite the tight financial shape of the CNMI.

The committee took NMC to task for the reported current budget deficit in its vocational education program which, under the appropriation measure approved by the legislature, received about $1.3 million for fiscal year 1999.

Although the amount was later reduced to $1.1 million in line with the 13.4 percent cut in government spending level, Hofschneider said the funds should not suffer shortfall when its 39 employees are way below the allowable ceiling of 62.

“How is it possible that it is in deficit when it is properly funded,” the HEW chair asked NMC president, adding this shows how the college is managing its funds.

But McPhetres argued that historically the college is drawing less funds from the government, which are not sufficient to implement the various programs.

She maintained they have had to ask for supplemental budget to meet the shortfall and oftentimes, government officials have had to assure them they would seek ways to source necessary funds.

“When we implement the programs, we can not just stop them,” McPhetres told the hearing.

“The reality is you are short of money,” Hofschneider explained. “What are the practices going on in the college over its fiscal affairs? Can the taxpayers continue to afford the rampant creation of programs, however justified?”

He added: “It’s very obvious that the historical pattern speaks for itself,” explaining the legislature has trusted NMC so much to a point of “blind trust, perhaps our biggest downfall.”

More findings: Like a Pandora’s box, yesterday’s oversight hearing — the sixth in a series of investigation by the House panel into the financially troubled college — uncovered yet several findings that showed mismanagement of funds and inconsistent policies.

The committee grilled again NMC Personnel Director Kohne Ramon and Comptroller Lawrence Harris for the fourth time in a row, this time focusing on the hiring of Carla Brewer for the college accounting division.

According to Hofschneider, Brewer sidestepped in-house promotion of several personnel in the department, managing to assume a position, accounts receivables specialist, created specifically by Harris for her and without advertisement of job opening.

He said this move was in direct contrast to the board-sanctioned policy to trim off the work force of the college amid the financial crisis besetting the government, which has reduced allotment to all departments and agencies, including NMC.

While defending his action as necessary to effectively manage his department, Harris admitted that Brewer’s salary was “pro-rated,” surpassing the pay level of those accounts employed longer than her.

Board of Regents chair Manuel Sablan, however, said the salary structure of the college could have contributed to the situation, noting the system has been adopted from the Trust Territory and Commonwealth government.

“I see discrepancy here,” he told the hearing. “If the board has authority to enter into contract with matters of employment, the salary should be pegged at the salary scale approved by the board.”

Upon questioning by the panel, Ramon also admitted an “overlap” when the personnel office issued last December a new two-year contract for Brewer when its initial professional service contract had yet to expire.

Hofschneider maintained specific cases, like Brewer’s, should be discussed in the hearing because “the summation of all these is that hundreds of thousands or perhaps millions of dollars have been lost that could have been used and reprogrammed for educational needs” of the college.

The hearing is scheduled to resume on Monday and the panel hopes to focus on instruction, procurement and finance of the college.