CNMI ADMINISTRATION BLAMED BY HOUSE FOR MISCOMMUNICATION

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By Annie Ruth C. Sabangan Variety News Staff

SAIPAN, Northern Mariana Islands (August 7, 2002 – Marianas Variety)---House leaders yesterday blamed the administration for causing the "misunderstanding" over the government’s financial condition.

Speaker Heinz S. Hofschneider, R-Saipan, said it was the administration that claimed there were not enough funds for government operation.

Rep. Stanley T. Torres, R-Saipan and chairman of the House Committee on Ways and Means, said the "miscommunication did not come from the House but from the administration."

"It was the administration officials that went to the Legislature and informed us about the impending deficit which turned out to be an imagined deficit. They are the ones who brought the issue on the waiver and suspension of criminal penalties. Now who is fooling who?" Torres said.

Yet it was Finance Secretary Frank Villanueva who "indicated to the House leadership that the government did not have a cash deficit and that there was enough cash to carry government payroll through November," Rep. Gloria DLC. Cabrera, R-Saipan, said.

"Now unless the secretary is providing the Legislature with information that is contrary to what he provided to the administration, the Legislature still believes that together with the administration, we can work toward effectively addressing our current budget predicament with measures that carry lesser consequences than the funding impoundment," she said.

Cabrera was referring to the administration’s announcement that it was invoking its authority to "impound" public funds to prevent a government shutdown.

Hofschneider noted that the cost-cutting measures mentioned in that announcement could have been implemented in February when the administration realized that the budget for the current fiscal year had to be reduced to $193 million.

"But that did not happen and it caught up with us," the speaker added.

Despite differences of opinion, Cabrera said the House had never given the administration the message that "we were unwilling to work together."

"Granted that the administration has the prerogative to request assistance from the Legislature, but what I still find difficult to comprehend is how the House can be expected to authorize deficit spending when it clearly does not have the authority to do so. How can you give something that is not yours to give?" she said.

Hofschneider said the Legislature and the administration will again meet to discuss the government’s financial condition.

The speaker said there was "miscommunication as to what is really the problem."

"The absence of an Office of Management and Budget (official) for the last five or six months created some of these problems. The left hand does not know what the right hand is doing," he said.

"Finance was clear in saying that the cash flow is fine as long as expenditure is controlled. But that did not happen so therefore someone (allowed) overspending," the speaker said.

It was the administration that informed the lawmakers on July 29 about the impending deficit.

On July 30, Babauta sent a letter to Hofschneider and Senate President Paul A. Manglona, R-Rota, requesting the Legislature to allow deficit spending.

On Aug. 1, the House rejected the administration’s request, saying it was unconstitutional.

On Aug. 2 then acting Gov. Diego T. Benavente announced that there would be a need to either suspend or defer the accounts of various agencies and programs due to the nearly depleted budget.

On Aug. 5, House leaders met Finance Secretary Frankie B. Villanueva who said that the government had enough funds.

For additional reports from the Marianas Variety, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/ Marianas Variety.

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