SAIPAN — Former Governor Ralph DLG Torres has issued a signed statement pushing back on claims reported publicly this month that his administration left the Commonwealth of the Northern Mariana Islands $1.2 billion in debt.
The figures behind that claim come from the government’s audited financial statements, and NMI News Service reviewed them. The review found that the numbers are not really in dispute. The figure cited in the claim and the figures Torres cites in his rebuttal are largely the same numbers, drawn from the same audits, and both sides state them accurately. What the two sides disagree about is what to call them, and how much to attribute to Torres personally.
The $1.2 billion figure is the government’s total liabilities as recorded in the fiscal year 2023 single audit. Torres argues that the figure is not debt in the ordinary sense of borrowed money.
On that narrow point, the audited record is on his side. The CNMI’s actual bonded debt, money it borrowed and owes to lenders, totaled about $75.6 million as of September 30, 2022. More than half of that traces to general obligation bonds issued in 2007, before Torres took office. The larger figure is total liabilities, roughly $1.239 billion, which includes obligations such as the pension owed to retirees, tax rebates owed to taxpayers, money owed back to federal grantors and unpaid vendor bills. Those are real obligations, but they are not bonded debt, and Torres is correct that describing the whole sum as debt is not quite right.
Being right about the word does not shrink the number. The two figures also measure different things. The $1.2 billion is everything the government owes. The government-wide net position, a different line in the same audit, is what is left after you count what the government owns, about $674 million in cash, buildings and other assets, against what it owes. That figure is negative $580 million. One number is the total pile of obligations. The other is how deep the hole is once the government’s own assets are set against it.
A pension obligation owed to retirees is money the government must eventually pay, the same as a bond, even though it is not borrowed. Whether it is called debt or liabilities, the government was underwater by hundreds of millions of dollars.
Much of that hole appeared on the books in a single year, and here too Torres has a point the record supports. He said a large share of the negative balance came from an accounting change rather than from new spending or borrowing. The fiscal year 2018 audit shows the CNMI acknowledged it owed a substantial pension liability but had not yet recorded it because, in the government’s own words, the amounts were not available. In fiscal year 2019 the CNMI recorded it. That single entry brought the government from negative $51 million to negative $456 million, according to the fiscal year 2019 financial statements. The change recognized an obligation of about $404 million that already existed rather than creating a new one.
NMI News Service obtained and reviewed the CNMI’s fiscal year 2018, 2019, 2020, 2021 and 2022 audited financial statements and confirmed that the figures cited on both sides of the argument appear in those reports as stated. NMI News Service also found the point neither side focuses on, that the government-wide statements those figures come from never got a clean opinion, drawing an adverse opinion or a disclaimer in each of the five years.
The fiscal year 2019 audit, performed by Deloitte and Touche, carried an adverse opinion. The fiscal year 2022 audit, performed by Ernst and Young, carried disclaimers on the government’s main funds and activities, meaning the auditors said they could not obtain enough evidence to form an opinion. In both years the auditors declined to vouch for the underlying numbers. That is the deeper account the debt-versus-liabilities argument sails right by. The figures both sides are talking about come from the government’s government-wide statements, and those drew an adverse opinion or a disclaimer in every one of those five years.
Torres is a candidate in the 2026 CNMI gubernatorial election, which is part of why the numbers have become a matter of public conversation. On the substance, the audited record credits the core of his defense. The CNMI’s borrowed debt is small, most of what is being called debt is other obligations, and the pension figure was recognized on the books rather than freshly spent. Those points are accurate. They do not erase a government-wide shortfall of roughly $580 million, and every figure on both sides of the argument comes from the government’s government-wide statements, which never earned a clean opinion.
