The Commonwealth Utilities Corp. is in \u201cserious delinquency\u201d status for its failure to conduct and release its required annual financial audits since 1998, according to the Office of the Public Auditor.<\/p>\n
Public Auditor Michael Sablan, in a May 5, 2004 letter to CUC executive director Lorraine A. Babauta, said that CUC needs to fulfill its responsibilities as soon as possible to avoid sanctions from the federal government.<\/p>\n
Sablan said that, based on records, the last audit conducted on the CUC was for the fiscal year ending Sept. 30, 1998.<\/p>\n
\u201cThe lapse in the release of timely audited financial statements places CUC in serious delinquency,\u201d said Sablan, reminding the agency that it was in a similar delinquent position in 1995, which led in part to the federal government suspending Section 702 capital improvement funds for CUC.<\/p>\n
He noted that the suspension of funding was resolved only after a partnership agreement between the CUC, the CNMI, Commonwealth Development Authority, and the Federal government was finalized.<\/p>\n
Sablan warned that CUC\u2019s failure to release audited financial statements in a timely manner could \u201cseriously jeopardize CUC\u2019s receipt of 702 funding and also penalize the CNMI through the loss of $4 million annually.\u201d<\/p>\n
He noted that the federal government is taking the matter seriously, citing that it has recently placed restrictions on the federal grants of two CNMI agencies for non-compliance with financial audit reporting requirements.<\/p>\n
\u201cThese restrictions have and will continue to create financial problems for these agencies and the CNMI as a whole,\u201d he said.<\/p>\n
The U.S. Department of Education has put the Public School System on the high-risk status list since last year for its failure to submit required audit compliance reports in the past few years.<\/p>\n
The USDE has also placed the Northern Marianas College in a similar status, resulting in the delay of the release of federal financial grants to its students. <\/p>\n
Sablan said OPA\u2019s concern \u201cis further amplified\u201d given the CNMI\u2019s ongoing negotiations with the federal government for a new set of CIP funding.<\/p>\n
He said that \u201cthe signed but unratified [702] agreement,\u201d specifies certain threshold requirements for determining eligibility, and competitive criteria for determining the amount of Section 702 funding.<\/p>\n
Foremost among the competitive criteria are the extent to which the insular government and agencies complied with all reporting requirements and the prompt and effective effort to resolve questioned costs or to correct internal control deficiencies, Sablan said.<\/p>\n
Consequently, he said that CUC\u2019s failure to settle its audits in the past years could adversely affect the 702 funding.<\/p>\n
Sablan said the OPA can now closely monitor government agencies following its recent set up of a Financial Audit Unit as authorized by the Commonwealth Auditing Act of 1983.<\/p>\n
The law mandates OPA to conduct or supervise all audits for or sought by a Commonwealth agency.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Commonwealth Utilities Corp. is in \u201cserious delinquency\u201d status for its failure to conduct and release its required annual financial audits since 1998, according to the Office of the Public Auditor.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-81114","post","type-post","status-publish","format-standard","hentry","category-local-news"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/81114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=81114"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/81114\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=81114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=81114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=81114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}