Atalig: No Compact Impact money yet

The CNMI has yet to receive its share of the $5.2 million Compact Impact funds for fiscal year 2004 from the federal government.

“The Compact Impact fund is not in the pipeline yet,” said Finance Secretary Fermin Atalig in a recent interview. The delay, he said, “is a matter of paperwork.”

The CNMI is entitled to a $5.2 million annual funding share from the $30 million Compact Impact legislation during the first five years of its implementation.

The $30 million fund would be shared among Hawaii, Guam, CNMI, and American Samoa over 20 years to help them cushion the impact of migration from other Pacific Islands.

The law requires each jurisdiction to submit reports and other documentation necessary for the release of annual funds.

Among others, the law requires the CNMI governor to submit a report to the Interior Secretary substantiating unreimbursed Compact-Impact expenses from Jan. 14, 1986, through Sept. 30, 2003.

The report should have been prepared in consultation with an independent accounting firm.

By Feb. 1 of every year, the CNMI governor must provide the Interior Secretary comments on the impacts of the Compact on the Commonwealth. The Interior Secretary, in turn, must report to Congress not later than May 1 of each year the governors’ comments and the administration’s analysis of such impact.

The CNMI funding may change after five years depending on the assessment made by the federal government.

The Babauta administration has committed the Compact funding in the next four years beginning FY 2005 to the Public School System.

The administration also said that PSS would get $2 million out of the FY 2004 Compact funding in view of its serious financial condition.

Meanwhile, Atalig said that obtaining federal grants does not mean instant cash for the CNMI government.

For instance, he said, that the FY 2005 capital improvement project funds, totaling some $12 million, although already approved, does not come in as part of the general fund.

“If they say we’ve got $12.2 million grant money, it’s basically on paper. We don’t get it right away,” he said.

He said the approval of CIP money means that the CNMI is authorized to spend that funding.

“They don’t give us lump sum. It doesn’t work that way. We go by drawdown. If all documents for a particular project is done, and all documents are ready, an agency certifies—whatever agency is supposed to certify—that that project is to their satisfaction,” said the secretary. After the issuance of the certificate of completion, an invoice for a particular work is submitted to the Department of Finance.

“When we receive the invoice, we then request Washington D.C. for drawdown of funds. The feds don’t just give us the amount without documents,” said Atalig.

This, he said, also explains the delay in the payment of some vendors. “It’s not as simple as we think because other agencies are involved here. People have the impression that when CIP is approved by Washington, money is pumped into the coffers right away. It doesn’t work that way,” said Atalig.