The central government failed to remit the Marianas Visitors Authority’s full appropriation last fiscal year, resulting in the carryover of some liabilities that were supposed to have been retired before the end of fiscal year 2011.
MVA managing director Perry Tenorio and the agency’s chief accountant, Donnie James Militante, disclosed to Saipan Tribune yesterday that the agency received only $4.2 million last fiscal year—short by $1.7 million to satisfy the $5.9 million allocation approved under the budget act last year.
Tenorio said this resulted in the agency incurring $1.1 million in liabilities to vendors last fiscal year that’s been carried over to this fiscal year.
“Last [fiscal year] 2011, we operated way below the ceiling authorized by the budget act…and we’re still waiting for the remaining $1.7 million to be remitted this year. We’re going to use this amount to retire the carryover liabilities we incurred last fiscal year,” said Tenorio.
He said the leftover obligation will not impact or affect the agency’s current budget because this will be paid for using the unremitted allotment. He said carryover liabilities amounts to $1.1 million as of Oct. 17. This means that some billings for last fiscal year are not yet included in the amount.
For fiscal year 2012, MVA has an approved budget of $6.3 million, of which 83 percent goes to the agency’s advertising and promotional expenses. The remaining 13 percent will be split among personnel salaries, utilities, building rental, professional services, and other expenditures.
According to Militante, the $6.3 million budget is broken down as follows: $1.040 million for personnel; $1.135 million for operations and all others; and $3.855 million for advertising and promotions.
The government projects revenue to reach just $102 million this fiscal year.
Despite the government’s volatile fiscal state, both Tenorio and Militante are confident that MVA will not operate in a deficit and do not anticipate any shortfall, unless the government revises its overall revenue projection and change the MVA’s allocation.
Tenorio said the agency has been faithful in implementing its budgetary plans to ensure that it continues to operate based on its mission priorities.
He said MVA is committed to maintaining its offshore offices in Korea and Japan, which are considered the CNMI’s main source markets and accounts for 70 percent of overall visitor arrivals.
Tenorio said MVA is currently operating under baseline mode, which means it is operating as needed to ensure offshore offices are open and accessible to travel partners and potential visitors while refraining from expending large capital in marketing and promotions.
“We still have our offshore offices in these two main markets, but what we’ve done is operate on a baseline [mode] because of the funding situation—just making sure that we have opened an office that will receive inquiries from these key markets,” he added.