Ebeye, Marshall Islands Power Utility Pays Off $1 Million Loan

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Financial operations significantly improve in recent years

By Giff Johnson

MAJURO, Marshall Islands (Marianas Variety, Nov. 3, 2014) – The Ebeye power utility has made history by paying off a nearly $1 million tax debt to the Marshall Islands Social Security Administration or MISSA.

The final payment of $55,046 was made to MISSA Administrator Saane Aho by MISSA board chair and Ebeye utility Internal Auditor Saeko Shoniber. Shoniber was instrumental in the process of moving Ebeye’s power company, Kwajalein Atoll Joint Utility Resource or KAJUR from being one of the least accountable government agencies to one of the best.

According to MISSA, KAJUR is one of the few Marshall Islands agencies that receive U.S. Compact funding whose financial operations significantly improved in recent years.

After a management contract with the American Samoa Power Association to run KAJUR ended in 2005, the Marshall Islands cabinet put three government utility companies — Marshalls Energy Company, Majuro Water and Sewer Company, and KAJUR — under one utility board. By 2007, KAJUR’s debt of unpaid social security taxes for its employees was $902,057.24 for 2002 to 2007. An October 2007 agreement between KAJUR and MISSA promised a monthly payment of $8,000 over 10 years, said MISSA.

Despite a tight cash flow at the power company, MISSA was able to collect these $8,000 monthly installments with the help of Shoniber, a former secretary of finance for the country, who sorted out KAJUR’s financial accounting system over several years. In June 2009, KAJUR voluntarily increased the monthly payments to $10,000. Two years later, KAJUR bumped the monthly payments to $20,000, which allowed KAJUR to clear the debt three years early, saving a significant amount in interest payments to MISSA.

While helping KAJUR clear its MISSA debt, Shoniber was instrumental in KAJUR’s becoming auditable and accountable. From FY 2005 through FY 2009, KAJUR’s books were in such bad shape that the government agency could not be audited. But with Shoniber’s financial guidance, General Manager Romeo Alfred and KAJUR accountants completed their account reconciliation and KAJUR’s books were updated until all pending audits for prior years were done before the end of 2010.

Audits for subsequent years were completed on time, and the FY2013 audit showed only one finding (problem), an indication of the accountability improvement at the Ebeye power company.

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