OPA: NMI government spends public funds on first-class travels

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THE CNMI government has been spending public funds on first-class or business-class travels over the last four years, the Office of the Public Auditor stated in a draft report.

OPA added that Public Law 15-86  prohibits first-class or business-class travels.

“Airline restrictions have been in place since the Governor’s Directive no. 197 on February 12, 1998, and was adopted into law, through P.L. 15-86, on September 26, 2007,” OPA added.

It cited the CNMI Report on the Audit of Financial Statements for fiscal years 2015 and 2018, which stated that government travel expenditures increased by about 27% for autonomous agencies and about 152% for the executive branch.

In FY 2018, OPA said, the CNMI government’s overall total travel expense reached $17.2 million, a 93% increase from the overall total in FY 2015.

Moreover, OPA found that the Department of Finance did not develop and implement a uniform travel policy by regulation as required by the law.

OPA noted that travel policies, per diem rates, and calculations vary across all CNMI government entities, except for agencies that have adopted the same policies and rates established by Finance for the executive branch.

“This causes per diem disparity among government employees traveling on official government business, perhaps enriching some while penalizing others. In addition, we found instances where purchases of first- or business-class airfare were made contrary to the statute prohibiting government-paid travel outside the Commonwealth. Our audit also found conflicting legislation adopted by the Legislature requiring agencies in one law to follow a uniform travel policy by regulation, and in another, to adopt their own travel policy,” OPA stated.

Current travel policies and practices of the department of Finance are guided by previous directives and memoranda issued by former governors and other government officials, OPA added.

The existing per diem rates utilized by Finance were established more than two decades ago and have not been updated to determine if such rates are excessive or sufficient to accommodate current travel costs, OPA stated.

Upon reviewing the current travel policies provided by the various government entities, OPA found one policy wherein travel in business class was allowed. 

In particular, the Marianas Public Land Trust, in its governance document that was adopted on July 31, 20l9, states that “any travel of over 6 hours from departure to any destination may be permitted in Business Class or the comparable class offered by the carrier.”

However, OPA said, “MPLT provided documentation indicating that business-class airline tickets were purchased by MPLT before the adoption of the MPLT governance document.”

OPA likewise noted varying per diem rates used by the CNMI government. For the Department of Finance, the Legislature and some of the autonomous agencies like the Commonwealth Ports Authority, the Commonwealth Healthcare Corp. and the Commonwealth Development Authority for example, the per diem paid to a traveler to Hawaii and U.S. mainland is $250. Those traveling to Guam are paid $175; to Rota, $125; and to Tinian, $100.

However, OPA said other government agencies spend higher per diem rate.

The Marianas Visitors Authority per diem rate is $275 for U.S. destinations and $175 for Guam, Rota and Tinian. The judiciary per diem rates for U.S. destination range from $275 to $381; for Guam, $250 and for Rota and Tinian, $240. The MPLT per diem rates for U.S. destinations is $450; for Guam, $375, for Rota, $275; and for Tinian, $175.

OPA recommends that Finance adopt a uniform travel policy by regulations and restrict the purchase of first-class, business-class or any premium-class designation. It also recommends Finance to provide guidance on per diem calculation.

“Although a uniform travel policy has not been implemented, the law clearly states the restrictions and requirements pertaining to official government travel. The purchase of first-class, business-class, or any other premium class designation is illegal and clearly violates 1 CMC §7407(f). In addition, the lack of a uniformity and the use of outdated per diem rates and policies create varying travel costs and inequity among government travelers,” OPA stated

According to 1 CMC §7407(f), “Any government employee who causes an airline ticket to be issued in violation of this section shall pay a civil fine of one thousand dollars.”

OPA states that “the current system makes the CNMI government vulnerable to waste of government funds.”

“According to the Government Accountability Office’s government auditing standards, ‘waste is the act of using or expending resources carelessly, extravagantly, or to no purpose. Importantly, waste can include activities that do not include abuse and does not necessarily involve a violation of law. Rather, waste relates primarily to mismanagement, inappropriate actions, and inadequate oversight.’ ”

According to the standards, the OPA said, “an example of such waste, depending on the facts and circumstances include ‘making travel choices that are contrary to existing travel policies or are unnecessarily extravagant or expensive.’”

OPA added, “Given that the CNMI government is currently facing another economic plight, it is essential that adherence to the travel law be enforced that fraud, waste and abuse do not occur. In addition, establishing a uniform travel policy will not only ensure uniformity across the CNMI government but will also demonstrate accountability of taxpayer dollars.”

Asked for comment, Rep. Tina Sablan who, along with other members of a House special committee reviewing the governor’s expenses, said: “We have been aware of illegal government-funded first-class travel since obtaining records from Finance pursuant to the minority's Open Government Act request seven months ago. We were first made aware of the issue even months before that, when certain records began circulating online and in social media.”

She said, “The law against government-funded first class travel is clear. There are no exceptions for anyone. OPA has conducted this government travel audit that will be crucial for raising greater public awareness of the problem. My first question is, will the attorney general enforce the law and recover public funds that were illegally spent on first-class travel?  My second question is, will Finance and the attorney general finally promulgate government travel regulations? This has been a major gap in our administrative code for many years. That remains to be seen. But I certainly hope so.”

The OPA draft report, which was submitted to the Legislature on June 23 for lawmakers’ comment will be finalized and posted on the OPA website by the end of this week.

If a response from members of the Legislature is not received within 30 days upon receipt, OPA will publish the final report without the response from the Legislature, Public Auditor Mike Pai told Senate President Victor Hocog and Speaker Blas Jonathan Attao.



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