January 29, 2011 Palikir, Pohnpei-The FSM Congress today voted on its last regular session day to return the Special Committee report on alleged violations of the Financial Management Act (FMA) and the National Public Service System Act back to the committee. The principal reason for the return was that the committee made no recommendations for action.
Chairman Dohsis Halbert said that without a recommendation the report is just "wasting our time."
Chairman Peter Sitan said that Congress should not approve "a report that doesn't say anything."
Senator Peter Christian said that of course Congress was hoping for a more definitive result from the report. He suggested that the committee should have provided "bullet points" regarding the exact laws that may have been violated.
Vice Speaker Frederico Primo chaired the committee and was in an acting capacity as the Congress Speaker in the absence of Speaker Isaac Figir who was away representing the FSM Congress in Mongolia at a conference of parliamentarians. In defense of the report he said that the committee had hurried to try to get the report done by the end of the session. Indeed, the report was not initially listed on the Order of the Day but a new Order of the Day was distributed along with the report after Primo had already gaveled the session to order.
Primo said that the report was not the final work of the Special Committee and begged the gathered Senators' indulgences saying that it was the first time as far as he knew that Congress had called a Special Committee to take on the kind of work they'd been called on to do. He said that the Committee had a hard time trying to determine what is the best avenue for resolving the problem at hand.
Former FSM President, Chairman Joseph Urusemal resorted to a fishing analogy as he often does. He said that really good fishermen often hide their best lures in the bottom of their tackle box. He said that the Special Committee had to be careful "not to walk around with our shirt off." Rather than saying "this person is guilty or that one we wanted clear evidence," he said. Evidence will come after the Office of the National Public Auditor completes its audit on the matter. The committee members felt that the information gathered was not enough for them to recommend a special prosecutor to try the matter.
The Special Committee report didn't contain much more information than was already known before the resolution that called for the Special Committee was passed in Congress.
The committee held hearings on January 6, 7, 13, 14, 17 and 18. Witnesses were called from the Office of the National Auditor, the Department of Finance and Administration, the Department of Statistics, Budget and Overseas Coordination, the Budget and Economic Management Division, the Personnel Division, the Department of Justice, the Division of Immigration and Labor, the Office of National Archives, the Department of Foreign Affairs, the Office of Environment and Emergency Management, and the Department of Resources and Development. The committee report has a section regarding the Department of Education but it did not mention a hearing date for witnesses from that department.
The report said that before calling witnesses from the relevant departments the Committee questioned ONPA Auditors about the progress so far on their audit report on the matter. They were told that the audit would be complete in four to six weeks. ONPA said that they would refer any violations to the Investigation Division which would then carry out an additional review for wrongdoing for possible referral to the Department of Justice for criminal prosecution. OPA noted that:
The auditor's office has now received nearly all the necessary documentation from the relevant departments. They said there has been an issue with obtaining information from the Department of Justice because a staff member with responsibility for some of the issues involved in the audit was reassigned to different duties.
The report said that a consistent theme among the witnesses was the role of the absence of effective financial controls in contributing to the overruns. In particular, the computer software used by Finance did not flag that accounts had a zero balance. Staff attempted to work around that problem by cross-referencing printouts of account balances, but this inevitably led to some errors being made.
There also appear to be a "culture of passing the buck" regarding the responsibility to keep within the budget, especially with regard to overtime. Overtime was often approved without reference to whether there were sufficient funds to pay for it with the expectation that Finance would catch any overruns. But by the point overruns were caught in that environment the overtime had already been worked which resulted in supplemental budget requests to Congress.
"It appears that mid-level administrative staff are being singled out for blame by the Executive for some of the overruns. However, any decisions by such staff that could have led to budget overruns must also have been signed off by the relevant heads of department and approved by Finance.
In the Department of Immigration a good amount of the budget overruns were caused by an incorrect interpretation that reclassifications (salary increases) approved by Congress were retroactive for the entire fiscal year. The report quotes Section 8.2 of the Public Service System regulations which says, "a reallocation action shall be effective on the first pay period immediately following approval by the Personnel Officer.
Although the funds appropriated were sufficient to cover the cost of base salaries but not sufficient to cover additional overtime costs for those positions. The Department of Justice appears not to have considered this before making the reclassifications retroactive. Further, the bill erroneously appropriated the funds as a capital improvement so they were not available to cover personnel costs.
"Overtime payments to Immigration personnel continue to be an issue of concern to the Committee, particularly in the light of regulations and attorney general opinions allowing for overtime payments grossly in excess of actual hours worked. Of particular note are the regulation providing for a minimum of two hour's overtime in each instance regardless of actual hours worked and interpretations of this regulation applying the two-hour minimum to each vessel with a separate owner processed on a single occasion. Figures from the Department of finance suggest that Immigration spent over $100,000 in overtime in the first three months of FY2011. Although Immigration contests this figure, the Division is attempting to control overtime costs by instituting a two-hour maximum for processing flights and vessels. However, although well-intentioned, this policy effectively attempts to remedy a system that pays more than the actual number of hours worked in some instances by paying less than the actual number of hours worked in others."
The release of payroll checks for the Department of Education when funds were not available was apparently the result of failure of Finance in checking the account balance mainly due to the software problem. The problem was introduced by human error due to manual processing.
Witnesses differed on the matter of whether the promotion to fill the Chief of Police position was on an "acting" basis and would be subject to the usual advertising requirements before it was filled permanently, or whether it was a permanent appointment somehow exempted from those requirements. Despite a communication from the Secretary of Department of Justice saying that the appointment was a permanent appointment witnesses said that isn't the case. The committee is seeking further clarification from the Executive Branch on that matter.
At the Office of the National Archives the budget overrun comes from the fact that the Director took payment in lieu of annual leave he had accumulated as Assistant Secretary for Social Affairs.
Departments appear also to be spending funds from a number foreign grants that have not been properly approved by Congress. There is confusion over which grants require Congressional approval, and whether that approval should take place before a grant application is submitted or after a grant has been awarded. Witnesses said that there was no consistent approach to the issue across the Government departments. The committee said that it was apparent that the status of grant awards is not adequately communicated to all government stakeholders.
The committee made no recommendations saying that it would await the outcome of the ongoing ONPA audit on the matter before determining what further action would be appropriate.