CNMI officials may face criminal charges for misuse of federal Covid funds, OPA says

By Bryan Manabat

Saipan - As the commonwealth races to complete years of overdue audits, officials have warned that unresolved financial discrepancies, totaling more than $257 million in Covid grants, could lead to criminal prosecution of officials in charge of the federal grants.

During a recent press briefing at the CNMI governor’s office, Ashley Kost, counsel for the Office of the Public Auditor, confirmed that criminal charges are on the table if investigations uncover wrongdoing tied to questionable expenditures flagged in the fiscal year 2022 single audit.

“Yes, it’s possible,” Kost said when asked whether those responsible could face prosecution. “If it does indeed become determined that there is a lot that we can’t justify, criminal charges could be brought against anybody who is in those decision-making positions.”

According to the local government's fiscal recovery funds 2025 report, the CNMI received a total allocation of $481.9 million under the American Rescue Plan Act of 2021, with broad flexibility to decide how to use the funding to meet the community's needs.

The audit, conducted by Ernst & Young, identified approximately $257 million in questioned costs, expenditures that may violate federal rules or lack proper documentation.

Major findings include unallowable costs, procurement weaknesses and poor oversight of sub-recipient spending.

Finance Secretary Tracy Norita attributed the audit delays to a combination of factors: the transition to a new financial system, the departure of regional auditor Deloitte & Touche, pandemic-related disruptions and poor management decisions.

The CNMI government is now working under an accelerated timeline—six months per fiscal year—to catch up on audits, with federal support expected to increase capacity.

CNMI

Norita warned that unresolved findings could trigger serious consequences, including grant terminations, stricter conditions, or automatic collections from federal reimbursement accounts.

The federal government has already asked the CNMI to return $11 million in CARES Act funds spent between 2020 and 2022.

Norita said the CNMI will appeal the federal order.

This audit confirms what we’ve been communicating: we inherited financial disarray,” Norita said. “We welcome joint efforts with the Office of the Public Auditor and the Attorney General to investigate these questioned costs.”

Gov. David Apatang acknowledged the gravity of the findings but said the administration is committed to transparency and reform.

“We take full responsibility for addressing these challenges,” he said. “Completing this audit is a difficult but necessary step toward restoring trust and protecting our island’s financial future.”

The OPA is expected to lead any investigative efforts, with findings potentially shaping both legal outcomes and the CNMI’s future access to federal funding.

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