Combined assets for the Marianas Public Land Trust decreased slightly by about $196K from $68.82M in FY05 to$68.63M in FY06. This is according to an independent audit conducted by Deloitte and Touche. General Fund assets declined $394K from $61.4M in FY05 to $61.0M in FY06 while the Park Fund assets increased from $7.4M in FY05 to $7.6M in FY06, or by $169K.

Financial Highlights

Total combined assets for MPLT decreased slightly by about $196K from $68.82M in FY05 to $68.63M in FY06. General Fund assets declined $394K from$61.4M in FY05 to $61.0M in FY06 while the Park Fund assets increased from $7.4M in FY05 to $7.6M in FY05, or by $169K. Assets decreased for the General Fund mostly due to the notes receivable from the Northern Marianas Housing Corporation (NMHC) which was written down through an allowance for loan losses of $4.0M. Management reduced the principal loan balance from $8.9M down to $4.9M due to uncertainties of the loan’s repayment. Other assets, however, increased from the previous year. Among them are the investments which increased $2.9M, cash and cash equivalents at $222K, and accrued income at $193K.

Liabilities increased $82K for FY06 from $366K to $448K in FY05 due to increases in payables to brokers and due to CNMI Government which jumped from $21K to $108K and from $274K to $284K, respectively.

MPLT has created three local economically targeted investments (ETI). These investments aim to provide corollary benefits while simultaneously providing a required rate of return. For the General Fund, two such ETIs are the loan to NMHC and Adelantun Publickun Luta Enteramente, Inc. or APLE. The third ETI is for the maintenance and development of the Park Fund.

Operating revenues decreased 19% from $6.8M in FY05 to $5.5M in FY06. The decrease inrevenue is mainly due to a decrease in the fair value of investments which declined from $4.5M in FY05 to $3.0M in FY06. However, interest income increased $217K for the same period. Operating expenses also decreased by $148K or 14% from $1.03M in FY05 to $890K in FY06. Professional fees, money management administration, and trustees’ expenses all contributed to the decrease in expenses. Other expenses, however, increased. These expenses include money manager fees, which increased $12K and salaries and benefits increasing $20K. In a 5-year period, revenues were negative in FY02 at $845K; it climbed upwards during FY03 through FY05 where it peaked in FY05 at $6.8M, and then it fell to $5.5M in FY06. Expenses, however remained fairly constant throughout the 5 year period. Expenses were at its lowest in FY02 at $752K and highest in FY03 at $1.1M.

Operating income is the change that results from subtracting operating expenses from operating revenues which measures earning power from ongoing operations. For FY06, operating revenue declined $1.2M or 20% from the previous year from $5.8M to $4.6M. For a 5-year period since FY02, operating income was negative at $1.5M in FY02. However, it remained steady for the fiscal years 2003 through 2005, and then in FY06, it declined.

MPLT engages the services of professional money managers to manage the assets of both the General and Park Fund trusts. The allocation of these securities, which may change over time because of investment policy decisions, consists of equities, fixed income securities, economically targeted investments (ETI), and cash and cash equivalents. For FY06, equities total $26.4M, down 30% from $37.8M in FY05 while fixed income securities gained $14.6M or 89% from $16.4M in FY05 to $31.1M in FY06.

Audit findings are reportable items considered material by the auditors. Findings document situations where established policy, procedures or standards have not been followed. Such deviations may lead to losses for the CNMI or misstatements in its financial reports. Findings, if they remain uncorrected, can ultimately lead to qualifications in the Opinion of the auditors. For FY 2006, there were no reported findings contained in the MPLT audit.

Download/view OPA Executive Summary of the MPLT a udited Financial Statements FY 2006

Download/view MPLT Audited Financial Statements FY 2006