Norita: DOF’s troubling state of financial system resulted from a rushed, poorly planned process

Finance Secretary Tracy B. Norita said yesterday the “troubling” state of the CNMI government’s financial system resulted from a rushed, chaotic storm of a poorly planned and executed implementation process.

What normally would be a 24- to 36-month process was rushed in 14 months, Norita said, resulting in many “temporary fixes,” inefficient workflows, and inaccurate data and financial reporting.

Norita talked about the DOF’s financial system in her memorandum yesterday to Gov. Arnold I. Palacios in response to Munis system consultant Shalee M. Davis’ observations and findings about the implementation of the Munis system. In her report to Palacios, Davis described the DOF staff and Norita as having minimal knowledge of Munis, rendering them incapable of generating reports necessary for the governor’s office or the Legislature.

Munis integrates finances, payroll, human resources, purchasing, fixed assets, revenue streams, and other government processes.

Davis, who is consultant/owner of Davis ERP Consulting, has been doing consulting work for the Munis system with the CNMI government in the past year.

In her response yesterday to Davis’ letter to Palacios, Norita said that Davis was actually part of the Tyler Munis implementation team. Although she is leaving after failing to secure a consulting contract with the Office of the Governor, Norita said they still maintain support services of other Munis experts from Tyler Technologies, which is the Munis software company that assists thousands of other government offices.

Norita said the DOF leadership has made it a priority since January 2023 to train staff on the Munis system, identify and understand its strengths and limitations, and adjust accordingly to respond to the CNMI’s needs and long-term viability.

Norita said she exercised her authority to make internal changes that required more work, more training, and pooling resources, which made some “uncomfortable.” However, she said, it was absolutely necessary to begin the work of restoring the integrity of their financial system and rebuild employee confidence through self-sufficiency. Norita said this shift in DOF’s priorities meant that her primary support would be focused on staff, not consultants.

She said another important focus was to identify prior management decisions in the initial implementation that caused setbacks in the quality and accuracy of financial data, such as “turning off” the budget controls and failing to “turn them on.”

The secretary said Davis has invaluable historical knowledge in the implementation decisions of former Finance secretary David DLG. Atalig and management during that period. However, Norita said, the shift in priorities to build local capacity did not align well with Davis and the difference in personalities and cultures did not “fit.”

She pointed out that DOF staff deserve the necessary training and tools they need to do their jobs—not have someone do it for them. This cannot be done, she said, if they continue to rely on consultants to help with even the most basic financial functions in every section of the office.

Norita said reliance on a system’s consultant to do accounting and financial tasks is costly, inefficient, and a liability to their fiduciary role.

To date, she said, DOF staff have increased their capacity and have come a long way in revamping system processes and making the necessary changes to improve their work.

However, she said, further training is still needed to take advantage of the powerful features of Munis beyond the current uses.

Norita shared that DOF staff told her in January 2023 that they were only given the bare minimum training to do basic functions, but were not trained enough to do all the necessary functions their job required. This forced many staff to rely on manual solutions until training became available, leaving many tasks incomplete.

In Davis’ last two weeks as an employee, Norita said, her sole instruction was to transfer knowledge and train key personnel.

Norita said she also leveraged their strong relationship with fellow finance officers at the Palau Ministry of Finance to learn from their successful implementation of Tyler Munis, specifically in bank reconciliation.

She said the finance officers at the Palau Ministry of Finance generously conducted hands-on training and troubleshooting for the CNMI—for free.

Norita said they learned that CNMI DOF staff were never trained on a module that could have helped them reconcile bank balances since the beginning—a stark failure of the implementation team and prior management.

She said Davis’ statement that Palau “differs significantly from the CNMI” is unfounded. While the size, scope, and areas of interest may differ, there are far more commonalities in CNMI finance offices since they all adhere to international/federal accounting standards, she said.

As for financial reporting, Norita said her staff make every effort to provide the necessary reports to CNMI leaders, which includes review and analysis of the financial information that is being presented.

While previous practices include running a report from the system with erroneous entries in prior years, they simply cannot rely on such a method, she said.

DOF staff have certainly made significant improvements in understanding reporting features, but there is still much to be learned, she added.

Norita said the primary job of the consultant was to train staff in functionality and features that would allow staff to report effectively. However, she said, without accurate information in the system, these powerful reporting features are useless if the information is incorrect.

As for Davis’ comment that she lost access to Munis, Norita said Davis’ system access was reduced to reflect her change in roles from a Tyler consultant to a government employee, and then to a private contracted consultant. Norita said access must be based on requested work only. She underscored the need for this limitation to benefit DOF as it requires the consultant to provide a “hands-on” training to DOF staff to learn and mirror how to resolve an issue while building self-sufficiency.

In terms of bank reconciliation, Norita said these issues could have been resolved earlier had the implementation team addressed them during the start of the Munis system.

Norita said when Davis was employed by DOF, this matter was left unresolved and it was only until the DOF leadership enforced this shift in priorities that this matter was addressed.

She said the move to new cash accounts was to improve better reconciliation of fund balances to cash accounts.

She noted that Davis was included in these discussions until she effectively resigned from her position as a government employee. Norita said Davis was not notified of further changes after her separation.

Tracy B. Norita