NMC probe shifts to credit-card buys

The House committee on Health, Education and Welfare cast doubt on a set of credit cards issued to the Northern Marianas College, while shedding light on the two student financial grants at the resumption of its two-months long oversight hearing yesterday.

Committee chair Rep. Heinz Hofschneider began its inquiry on the Visa cards provided by the Bank of Hawaii under the name of NMC President Agnes M. McPhetres, which are being used by the college for purchases of some of its supplies.

While the panel has yet to categorically rule the transactions as violations of existing government regulations, Hofschneider asked college officials to hand in documents pertaining to the credit cards, including bank statements and accounts balance.

But a source disclosed the latest HEW findings would be turned over to the Attorney General’s Office for in-depth probe into possible misspending of government funds.

During the hearing’s morning session — the ninth in the series of House investigation — the committee revealed several questionable documents on the cards, whose billing has continued up to this day since the college stopped payment in 1996.

According to Hofschneider, two check payments were made by the NMC board of auxiliary services in 1994 totaling to about $30,000 — a fact corroborated at the hearing by Stanley Mar who works for the board that manages the college bookstore and the cafeteria.

The committee had found out that several computers were purchased by the college in April of that year, costing some $29,000, using the credit card.

Aside from that record, other statements could not be retrieved from the bank or from NMC files, drawing speculations from the committee as to what type of credit card transactions were involved.

“It is improper if the cards are being used for personal reasons and the college is paying for those encumbrance,” Hofschneider told reporters after the hearing.

He said they could not ascertain as to the total liability of the credit cards as numerous account transfers have continued despite decision by the college to stop payment.

NMC Comptroller Lawrence Harris claimed all credit card statements are forwarded to McPhetres whom, he said, pays portion of the balance every month.

He said there was a balance of $20,000 to the credit cards when he became comptroller in 1996 and when he informed the president, he claimed he was told NMC had to check the statements first as billings included purchases made as early as 1993.

McPhetres was not in the hearing as only lower-ranking officials and middle managers were summoned at yesterday’s session.

While the cards are helpful for some executive officers when buying supplies, Hofschneider expressed concern that the problem is “those cards that are being abused.”

EAP fiasco

Meanwhile, the panel also disclosed that NMC students can still enroll even without the CNMI scholarship grants under the Educational Assistance Program or EAP.

Hofschneider blamed the inefficient cash management system of the college to the never-ending problems on the financial aid shortfall, saying the federal funds provided to local students under the Pell grants are sufficient to cover their tuition and fees.

“The students are being misled,” he told reporters. “It’s possible that (NMC officials) are using a delaying tactic so that they can apply the EAP first to the tuition costs. They just want more money.”

The inquiry on the two financial aid programs for NMC was sparked by complaints from students who have claimed receiving their refunds late despite on-schedule drawdowns by the college on their Pell grants.

The CNMI’s lone higher learning institution has come under fire for consistent deficit spending in recent years which has impacted on the scholarship funds of the government.

HEW has so far pointed to mismanagement and inconsistency in policy implementation as probable cause of the financial troubles facing the state college.