CNMI’s cumulative deficit ballooned to more than $80 million by the end of fiscal year 1998, up by about $23 million from previous record, according to Gov. Pedro P. Tenorio.<\/p>\n
He said the deficit would have been bigger had his administration not put in place cost-cutting measures that had drastically reduced government expenditures since assuming office in January 1998.<\/p>\n
Tenorio attributed the increase to outstanding accounts left behind by his predecessor which his administration had to pay back.<\/p>\n
He did not provide specific details, although a report based on the independent single financial audit of Deloitte & Touche will be released within the next few weeks.<\/p>\n
“The latest information we received that was prepared by the independent public auditor shows that we have a deficit of $80 million in fiscal year 1998,” the governor said in an interview.<\/p>\n
The preliminary report, received by the Tenorio administration more than two weeks ago, is now under review by the Office of the Public Auditor.<\/p>\n
According to Tenorio, portion of the deficit was incurred during the last three months in office of former Gov. Froilan C. Tenorio.<\/p>\n
He, however, admitted that his administration also had overspent during the first months of his term in office due to the bloated spending package adopted by his predecessor.<\/p>\n
When he assumed office in 1998, the government ran under continuing resolution based on the $246 million spending level passed by the Legislature the previous fiscal year. The ex-governor’s tenure covered the first three months of that fiscal year, from October to December.<\/p>\n
Based on a preliminary report of the Department of Finance, the CNMI collected close to $237 million in total revenues during FY 98.<\/p>\n
“We did control spending when we put in place the austerity measures so that during nine months of my administration, the deficit was tremendously reduced,” said Tenorio.<\/p>\n
“If we had followed the original budget…we would have had more deficit than what we expected,” he added.<\/p>\n
Tenorio likewise believed that a large portion of that amount were incurred from meeting the financial obligations he inherited from his predecessor, including outstanding accounts.<\/p>\n
But he expressed optimism that the deficit would be kept at bay when an audit of government expenditures during FY 99 is conducted.<\/p>\n
“Once the audit takes place, I personally believe that FY 99 budget is almost a balanced budget because we did not overspend what we had collected,” said Tenorio.<\/p>\n
Although the government has undertaken belt-tightening efforts for the past 22 months, it does not have a definite plan on how to reduce the deficit, which under the CNMI Constitution must be retired within two years.<\/p>\n
The island government has suffered serious cash-flow problems following the economic crisis spawned by the recession in Asia, its main source of tourists and investments. The region-wide currency crunch has pulled down local revenues since late 1997.<\/p>\n","protected":false},"excerpt":{"rendered":"
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