Audit recommendations tracked in 2006 totaled 79. Of the 79 audit recommendations, 19 were closed and 60 remained either open or resolved. Of the 60 open or resolved recommendations, 47 were considered delinquent.

OPA closed 19 or 24% of the 79 audit recommendations it tracked in 2006. Closed recommendations also increased from 5 in 2005 to 19 in 2006. Moreover, the number of delinquent recommendations slightly increased by 2%. Although, not reflected in the above table, the number of delinquent recommendations decreased by 28% during the first six months of 2006.

These positive results were attributable in part to the efforts of the Governor’s Office, and in particular, the Special Legal Counsel to the Governor, for their initiative in encouraging agencies to respond to OPA on their delinquent recommendations. The initiative taken by the Governor’s Office has resulted in the significant closure of recommendations as well as the decrease of delinquent recommendations. Closing recommendations where action has been taken will help OPA streamline the process, as well as improve the efficiency and effectiveness of the CNMI government.

An analysis of the 19 closed recommendations for year 2006 showed that 14 were closed because the agencies either implemented OPA’s recommendations, drafted policies and procedures or issued memoranda and directives in order to reemphasize the need to comply with existing regulations. OPA also closed 4 recommendations due to expenditure accounts earlier reviewed by OPA being ceased and no longer authorized and the suspension of a federal program and medical referral allowance making earlier recommendations issued as now
inapplicable. A recommendation was also closed due to alternative actions taken by the agency which OPA considered sufficient to close the recommendation.

OPA is also responsible for overseeing all audits of the CNMI Government conducted by private Certified Public Accounting (CPA) firms under contract by OPA. Therefore, follow-up procedures are also conducted for recommendations issued by these CPA firms requesting for information on actions taken to address their recommendations. OPA includes in the tracking report a total of 119 recommendations in 9 recent audit reports of the CNMI government and various government entities issued by private CPA firms. OPA would like to recognize the Marianas Visitors Authority for having no reportable audit findings in its annual financial and compliance audit report for fiscal year ended September 30, 2006 conducted by a private CPA firm.

As of December 31, 2006, recommendations in 13 audit reports were referred to the Attorney General’s Office for legal action to recover monies improperly expended. According to these 13 audit reports, approximately $2.7 million is potentially recoverable. As no update was provided to OPA on these referral cases, the status of these referrals remain unchanged from the previous report as of June 30, 2006.

In addition to the 13 audit reports referred to the Attorney General’s Office, recommendations in 8 audit reports also identified potential recovery of another $3.7 million which hinges on agencies’ actions. These potential recoveries include unpaid rentals of land leases, uncollected fees, overpayments in professional service contracts and retirement benefits, and improper expenditure of public funds. During its semi-annual follow-up process for the period covering July 2006 through December 2006, OPA received no new update by agencies on the recovery of these funds. As such, the status of these referrals remain unchanged from the previous
report as of June 30, 2006.

In accordance with statutory restrictions in the Auditing and Ethics Acts, the names of individuals and entities in the audits are not disclosed in this report.

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