Fiscal analyst Demapan says Norita’s report on $10.1M deficit is wrong

Legislative Bureau fiscal analyst David S. Demapan said yesterday that Finance Secretary Tracy B. Norita reported that the deficit in the general fund for the third quarter of Fiscal Year 2023 was $10.1 million, but based on his review of her report, he concluded that the deficit was $53.3 million.

“And that number comes from her report,” said Demapan in an interview.

On Finance Fiscal Year 2023 Third Quarter Report, Norita clarified in her letter to the          Legislature last week that a recent media article published a $68-million deficit in the general fund, however, the quarterly report indicated a budget deficit of $10.1 million.

Demapan shared his analysis of the $68 million deficit for the three quarters, or nine months of Fiscal Year of 2023, at a recent Senate session.

Demapan explained yesterday that the way he assembled that number is by taking the actual collection for the third quarter which amounts to $33,064,861.

The fiscal analyst said by adding all the expenditures, including the encumbrances, he came up with a total of $86,421,695.

He said taking the collection of $33,064,861 and subtract the $86,421,695 of total expenditures, it shows a deficit for the quarter of $53,356,834.

“And that’s what happened to that report that I submitted to the Senate,” said Demapan, adding that there is a need to have Finance Secretary Norita explain how she came out with her number.

He pointed  out that for the actual expenditures they have to consider also the encumbrances.

“Encumbrances are legal obligation of purchase orders. Then you have to subtract it also the expenditure to give you the true picture of what is the balance of the budget,” he said.

 In this case, Demapan said, the budget was overspent by approximately $53.3 million.

He said that $53.3 million deficit is only for the third quarter reporting.

Demapan said for the three quarters or  for the nine months of fiscal year 2023, the accumulative deficit is showing here at $68,196,467.

“And those numbers are based from her report. So I stand that my report that I submitted to the Senate is correct. And I can have anybody look at the analysis that I did  and see what that person  will interpret whether my balance of my reporting  is correct or wrong,” he said.

Even with the third quarter, Demapan said, Norita’s reporting  is understated because his reporting for the deficit is showing that its $53.3 million.  

“So I don’t understand how she come up with $10.1 million.

We’re not using the numbers on our own. We’re basing the numbers based  from her  report to the Legislature,” he said.

Demapan said he believes that the most reliable information  that they can justify and prove whether the true deficit for the last nine months in fiscal year 2023 is $68 million, is to have          Norita generate a complete financial statements of the general fund.

“What I mean is she would have to generate a balance sheet to the general fund and the statement of revenues, expenditures and changes in fund balance so we can determine exactly how much is the general fund deficit for the past nine months of fiscal year 2023,” he added.

Demapan obtained a master of science in professional accountancy at the Walsh College in Michigan. From 1988 to 1991, he worked as a staff auditor with Deloitte Saipan.