Unused DHS monies cannot be reverted to general fund

The Office of Homeland Security’s unused funds are exempted from a CNMI law requiring such funds to be withdrawn and reverted into the general fund at the end of the fiscal year, the Attorney General’s Office clarified.

According to an AGO legal opinion, the U.S. Department of Homeland Security’s policy on the handling of funds it has provided supersedes 1 CMC 7708, which states that unless exempted by law, the unobligated balance of any expired appropriation should be withdrawn and revert to the general fund.

The AGO noted that currently, no existing legal documents show whether OHS funds could be considered appropriation since the money comes entirely from federal funds.

The Department of Finance has maintained that the law on withdrawal of unused funds applied to each government office unless the Legislature has specifically exempted that office from having its funds reverted to the general fund.

The AGO quoted Robert Shrack of the Finance Department as saying that, for the funds to remain in the OHS’ account past the end of the fiscal year, the Legislature would have to insert language into the statute creating the OHS saying that “The appropriation is not subject to fiscal year limitations.”

Because the Legislature did not specifically exempt the OHS from having its funds be withdrawn and revert at the end of the fiscal year, OHS’ unobligated funds were withdrawn from its dedicated account and reverted to the general fund, the AGO noted.

However, the AGO reported that it received a different opinion from Alan Fisher, a senior attorney at DHS, the federal agency that provides the money to OHS.

Fisher reportedly told the AGO in a Nov. 3, 2005 email, “when the [OHS] accepted the grant, they accepted our time frames. If they can’t spend it within our time frames and don’t get an exemption, it comes back to us. Under no circumstances will it ever go into their general fund.”

The AGO concluded, “As provider of the Office of Homeland Security’s monies, the Department of Homeland Security’s proscription against the Office of Homeland Security’s funds reverting to the general fund takes precedent over the Department of Finance’s position that unless the Legislature specifies otherwise, all funds—including indirect costs—revert to the general funds. Therefore, the Office of Homeland Security’s funds should not be withdrawn and lapse at the end of the fiscal year.”