Prior to the House of Representatives minority bloc’s recent finding of “very few records” from the Office of the Governor documenting the actual disbursement of the community benefit fund, the Office of the Public Auditor has been asked to audit those funds since last year.
Sen. Paul A. Manglona (Ind-Rota), in a letter last December, asked the OPA to audit the use and expenditures of the CBF, pursuant to Section 16 of the casino license agreement between the CNMI Lottery Commission and the Imperial Pacific International (CNMI), LLC.
“The community benefit fund is part of the consideration or payment of the exclusive casino license and therefore considered public funds, giving your office the authority to conduct audits accordingly,” Manglona wrote.
The senator stated that although CBF monies are not deposited into the general fund, they should be considered public funds, adding that it is part of the consideration or payment for the exclusive casino license, and was pledged in exchange for government property, i.e. the casino license. “Therefore, the community benefit fund is tantamount to earmarked funds of the CNMI,” he added.
Manglona also noted that the governor’s consultation is required before CBF funds are disbursed to community benefit programs, such as education, scholarships, infrastructure, health care, employee retirement benefits, “all government functions and responsibilities.”
“…The office of the public auditor has a special duty to prevent and detect fraud, waste and abuse in the collection and expenditure of all public funds. This duty should extend to the expenditure of the community benefit fund, which is tantamount to government earmarked funds,” the senator said.
Based on the casino license agreement, IPI should have already deposited $40 million in the CBF by now. The House minority bloc recently stated, based on the documents they gathered from their Open Government Act request, that only at least $10 million has been deposited into the escrow, and only about $1.2 million in CBF have actually been distributed for just four programs or projects.
The senator argued that there is no official report on the CBF disbursement or expenditure to date. “These funds must be accounted for and any distribution must be disclosed for transparency. The expenditure of these funds must only be made for the intended purposes as enumerated in the casino license agreement.”
Manglona stressed that it is incumbent on the OPA to ensure that the community benefit fund monies are spent accordingly.