CNMI ENDS PAPER PAYROLL CHECKS IN FAVOR OF DIRECT DEPOSIT

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Cost cutting measure should streamline process

By Haidee V. Eugenio SAIPAN, CNMI (Saipan Tribune, Jan. 5, 2011) – In the Northern Mariana Islands, after overspending more than US$16 million in Fiscal Year 2010 and an estimated US$6 million shortfall in the first quarter of Fiscal Year 2011, the Fitial administration wants to further cut costs this year starting with processing payroll through direct deposit and doing away with paper checks.

At the same time, non-critical government employees will be receiving today their paychecks that were supposed to be released on New Year's Eve.

The delayed paychecks were a result of severe government cash shortage.

"Payroll is set to be disbursed (today)," Press secretary Angel Demapan said.

Lieutenant Gov. Eloy S. Inos, in an interview with Saipan Tribune, said the government can only "encourage" but not force employees who are still receiving their salaries through paper checks to open a bank account so they can avail of a direct deposit payroll.

For those who are switching to direct deposit effective pay period number 1 which ends on Jan. 1, 2011, they are encouraged to submit to Finance's Payroll Section the name of a bank within the Commonwealth of the Northern Mariana Islands (CNMI) where they have a savings or checking account and provide their account number.

Some 80 percent of government employees have been on direct deposit payroll, while the other 20 percent get paper checks.

Inos, when he was acting governor on Monday, concurred with acting Finance secretary Connie Agulto's memo to streamline the payroll processing.

Agulto said the current system of processing payroll-both through direct deposit and paper checks-is "labor intensive and costly" for the CNMI government.

"In continuing our efforts to reduce government expenditures, payroll processing costs have been reviewed and determination has been made that related expenses can be reduced by streamlining our payroll process into a one-track, direct deposit system and by reducing the number of allottees/allotments that Payroll Section must process payments for each payday," Agulto said in a two-page memo concurred by Inos, who is also a former Finance secretary.

Besides doing away with paper checks, Agulto also started limiting the type of allotments that Finance's Payroll Section must process payments during each payday to also cut costs.

Effective Jan. 1, 2011, the types of allotment categories to be honored by Payroll will be limited to six types.

These include life insurance companies, health insurance companies, Commonwealth Credit Union, garnishments such as student loans and tax levies, child support deductions, and government deductions such as for the Commonwealth Utilities Corp., Nutrition Assistance Program, Commonwealth Development Authority, and Commonwealth Health Center.

Agulto said all other allotments that were previously processed that are not in any of these categories will be automatically terminated.

"Please take note that if your allottee category is not listed above, you will be responsible for making direct payments to your allottees," Agulto told government employees.

The acting Finance secretary also called on all government employees to file a new W-4 form by Jan. 7, Friday, to update their employment records.

She said timekeepers in each department are responsible for issuing the forms and submitting them to Finance and Accounting.

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