KITTI MUNICIPAL AUDIT CONTAINS 14 NEGATIVE FINDINGS
"Luhkenmoanlap Miguel who was not allowed to respond says that he may sue"

January 24, 2007

By BILL JAYNES
The Kaselehlie Press

Kitti, Pohnpei, FSM - The Kitti Municipal Government audit conducted by the Office of the Public Auditor of Pohnpei which covered the fiscal year ended September 30, 2005 is now public. The Luhkenmoanlap (Mayor) McGarry Miguel, whose impeachment case is still being decided in the courts said in an interview at the Kaselehlie Press office, "I believe the audit is wrong from beginning to end."

Miguel, whose daughter was nearly killed when a car struck her on March 29 of 2006, said that he was at Pohnpei State Hospital on April 18 with his broken child when the Speaker of the Isokohnedi (Council), Dionis E. Saimon came to him with an agenda for the next meeting. Miguel said that the agenda that was presented to him did not include the resolution for impeachment which was passed by the council in Miguel's absence. He said he found out about that when he returned to Kitti. As is the practice and law in the many impeachment proceedings in Pohnpei, the Kitti Municipality continues to book the pay that is due to McGarry Miguel.

Though it is standard practice to have the sitting administrator, in this case the Acting Mayor, respond to audits this case is especially contentious and bothersome to Miguel because of his unresolved impeachment case.

Saimon, according to Miguel, introduced the impeachment proceedings. Saimon is currently serving as Acting Mayor and in that capacity responded to the audit. The cover letter on the audit response from the Acting Mayor said, "As you may recall, this audit exercise emanates from a resolution that was adopted by Isokohnedi and submitted to the Pohnpei State Attorney General's Office for criminal investigation and prosecution of the FORMER LUHKENMOANLAP (emphasis added) of Kitti for various allegations identified in the said resolution and now supported by this audit report."

Miguel seemed in the K-Press interview, to think that acting Mayor Saimon had a motivation to respond to the audit in a way that would reflect Miguel in the worst possible light. He said, "I am still the Luhkenmoanlap, not the former! What's the meaning of 'the acting Luhkenmoanlap?' I'm already out? I am still the Luhkenmoanlap!"

The audit report states that the only available documents available for review were an un-reconciled check register, the logbook for business licenses and fees, folders that contained timesheets and check stubs for payroll, opened envelopes of bank statements and cashed checks, and a folder for each expenditure account containing loose vouchers and check stubs.

"The Municipality has no general ledger, cash receipts and disbursement journals and other subsidiary ledgers for fiscal year 2005…Checks recorded in the check register were incomplete…the logbook for business licenses and fees did not reflect the corresponding receipts issued to payors and cash receipt books were missing. The auditors sorted the voucher payables and found that there were missing check stubs and other supporting documents." Under the heading "cause" for the problems the auditor reported "An official claimed that some records, documents, and checks were burned."

When asked who burned the documents, Miguel said that the former Accountant/Clerk who is under investigation by State Police for allegedly forging checks totaling $14,200 burned the documents before she was fired from the Municipality. Miguel said that the former dispensary where the Municipality's Government was housed from 1954 until Pohnpei State built a new facility for them which was dedicated on September 10, 2004, was prone to flooding and the records stored there were destroyed by that flooding.

He said the absence of those records should not have affected the audit results because they covered 1999-2003 and were outside of the audit period. Law requires records to be kept for five years.

Pohnpei State audit exceptions included un-receipted income that was never banked; 56 unrecorded checks totaling $13,898 missing but paid by the bank; payroll advances of $14,078, $4,701 of which has yet to be reimbursed by employees; bank statements that were never reconciled; internal cash controls that were not in place; untimely deposits and several other exceptions. Payroll dates in Kitti, according to the audit, seemed to be fluid.

There were 26 pay periods in the fiscal year. Each of the 26 pay days in FY 2005 came between 3 and 14 days early. Miguel said that he had a policy that employees that had funerals or other events involving immediate family could advance their salaries. He also said that council members (Isokohnedi) always advanced the $25 a day fees they were due by law. He said they got their fees whether or not they actually showed up for the sessions. "If they can do that, why can't the others do it too?" he reasoned.

The audit states that McGarry Miguel owes Kitti Government $752 in outstanding salary advances. Miguel said that Kitti instead owes him $28. He said that the council authorized a $30 per pay period COLA (cost of living allowance) the total of which would have been $780 for the fiscal year in question.

Among the audit exceptions listed in the audit was the lack of a Fixed Asset Log to record the hard goods and property of the Municipal Government. Miguel spoke of two outboard motors mentioned in the audit as having been donated by Pohnpei State. He said that both of the motors were still the property of Pohnpei State and not the Municipality. A Jeep Escudo was listed as having been purchased during the audit period. The status of the commodity was listed as "junk" in the audit. Mayor Miguel said that because of the limited budget of the Municipality, his brother had let him use tires for the vehicle. He said that when he was impeached he had to take the tires back to his brother so the vehicle was on blocks. "That was the only thing wrong with [the vehicle]."