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Penalty proposed vs govt
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Posted on Jan 29 2005
Citing the government’s continued failure to pay off vendors in a timely manner, Vice Speaker Timothy Villagomez has introduced a measure that seeks to penalize the government if its debt remains unpaid after 60 days.
Villagomez said there is no reason why the government cannot fulfill its duty considering that funds are appropriated for the operation of the Commonwealth government.
“Many vendors or contractors have to wait months and even over a year to receive their payment from the government without interest,” said Villagomez.
In House Bill 14-290, Villagomez proposes to impose a 2-percent penalty fee against the government if it fails to pay off vendors or contractors within 60 days after receiving the goods or services. This would be on top of the original amount or billing.
The lawmaker wants the penalty, however, to be assessed against the Department of Finance’s account and not the requesting agency.
The lawmaker pre-filed the proposed law last Wednesday.
Villagomez indicated that late payments to vendors happen in various agencies. Public School System vendors, for instance, have been sending collection letters asking for immediate payment. The vendors said they need to get paid now so they can pay off their taxes to the government.
The Finance Department, for its part, has said that it awaits the taxes paid by businesses in the CNMI to be able to fund government agencies, including PSS.
The department had assured PSS that additional funding would be given on or before Jan. 31.
As of last week, PSS said it needs a total of $1.4 million from the government, including a $1.1-million payment for vendors. PSS said it needs to settle some $800,000 in obligations owed to vendors in fiscal year 2004.
For the first quarter of FY 2005, PSS owes $300,000 to vendors.
PSS operates on a $37.2 million continuing resolution.
