MARSHALL ISLANDS GOVERNMENT PAYS $1.1MILLION SUBSIDY FOR OUTRIGGER OPERATION

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IN ‘98

MAJURO, Marshall Islands (Nov. 5, 1999 – Marshall islands Journal)---The Outrigger Marshall Islands Resort suffered a net loss of $265,459 in fiscal year 1998, according to the RMI Auditor General’s most recent report to the Nitijela.

The report shows that the government injected a subsidy of $1,119,664 into the government-owned hotel during the year that ended September 30, 1998. (The Outrigger recently reported that as of July this year, it had been begun operating at a profit.)

The audit identified several areas needing attention, including the "direct bill" accounts receivable, which showed that nearly 80 percent of the $124,526 owed involved bills that were two months old or more.

The auditor recommended that the Outrigger should enforce policies requiring customers to pay in a timely manner, and take legal action if payment was not made.

Outrigger management replied that "$37,634 is personally owed by a certain government official whom we find difficult to forward to attorney for collection. Instead, we have chosen to personally address collections of payment with his staff."

Another $44,535 was owed by two airlines, but involved questioned billings, resulting in a delay in payments, the Outrigger said. The balance ($14,728) is "actively being sought from RMI government ministries and agencies and/or individuals that, in our opinion, to file a lawsuit for collection may cost more than the amounts due."

Outrigger noted that the hotel owed $14,895 to Finance for income tax deducted from employees; $30.38 to the government for the eight percent hotel room tax; $83,938 to Social Security; and $19,903 to Majuro Atoll Local Government for sales tax. The audit said the laws requiring payments of these taxes should be met.

Outrigger replied that the inability of the hotel to pay these taxes is "directly attributed to the lack of adequate working capital required from Majuro Resort, Inc.," a unit of the RMI government.

The Marshall Islands Journal, Box 14, Majuro, Marshall Islands 96960 E-mail: journal@ntamar.com  Subscriptions (weekly): 1 year US $87.00; international $213.00 (air mail).

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