July 6, 2006

The Kaselehlie Press

Andrew Joseph, Dir. Finley Perman and Ursula Abalos

Pohnpei State Director of Treasury and Administration Mr. Finley S. Perman has accomplished what most in recent history have not been able to accomplish for Pohnpei State. The recently completed Pohnpei State audit was submitted well before Jemco's requirement and an unqualified rating. At the time of press Pohnpei State was the only one to have met the June 30 deadline.

Having an unqualified audit has been a goal of the director since he arrived in his post in March of 2004. Auditors are called upon to issue official opinions as to the accounting procedures utilized in organizations. Audits deal with not only financial health but record keeping policy and procedure. They insure that the balance sheets issued by an entity are accurate and based on generally accepted accounting procedures. For Pohnpei State to have an unqualified audit means that there were very few audit exceptions and that the finance reports issued are clean and accurate.

According to Mr. Perman, the 2003 audit that occurred just after his arrival in the department was qualified. "The auditors could not find the records they needed," he says. "We were on the verge of a high risk evaluation."

Under the direction and mandate of Governor Johnny David, who as Mr. Perman put it, "set the course", the director set out to clean up the finances of Pohnpei. Apparently that is what he accomplished.

"We told the employees that if they did not do their jobs properly we would be forced to remove them." He said that because of the appeals process for terminations in State Government some department heads look the other way at poor employee performance. "We owe it to our citizens and to donor countries [to have clean audits] so that they will have confidence in how we handle money entrusted to us."

In 2005 they had yet another qualified audit for fiscal year 2004 but the central unit of the state finance office was clean according to the Director. Pohnpei State has 7 component units such as EDA and PFC. By law those government agencies are allocated a certain amount of money for which they are to account as separate entities. Director Perman says, "The problem was that none of the agencies had accountants." Finance reports from the component units were assimilated into the central government's audit report as required, resulting that year (2004) in a qualified audit opinion.

Mr. Perman approached the Legislature for help in providing accountants for the "component units". The legislature did not allocate the resources he requested so the Treasury Department recruited a CPA to help with the accounting of the State agencies. That move resulted in the unqualified audit-the first in many years.

When asked if he thought the success was because he was a good leader, Mr. Perman shook his head and said, "We just did what needed to be done."