CNMI Payroll problems related to IDS investigation (Saipan Tribune)

Payroll accounts frozen

 

By Liberty Dones
Reporter

The payrolls of at least three major hotels in the CNMI-covering nearly 1,000 personnel-are currently frozen in banks as a result of an alleged federal investigation into the private accounting firm in-charge of payroll processing.

Guam-based Information Data Services, an outsourced accounting firm that handles the payrolls of Saipan World Resort, Pacific Islands Club, Hotel Nikko Saipan, as well as the Commonwealth Ports Authority, is reportedly prohibited by the federal government from accessing its accounts, which include deposits by Saipan-based companies.

As a result, the affected companies would have to use their reserve accounts to pay their personnel and to issue their checks manually, rather than electronically through the banks.

In the case of CPA, it said that it has not deposited its payroll money yet to IDS.

“There are concerns with IDS.cashing the checks is being put on hold. CPA, though, has not transferred to IDS for this pay period. Our accounting department has to do it manually now, working with the local banks to ensure that all of the employees who have accounts in other banks get their direct deposit. We'll do manual checks this pay period. We want to make sure that all employees will get their paychecks,” said CPA executive director Clyde Norita in an interview yesterday.

He said the agency has “minor issues with banks off-island” since these would not receive their allotment for six CPA personnel this week.

“Those employees, we are advising them that their allotment would not be possible this pay period,” he said.

These employees, however, will get their paychecks manually.

CPA said it has been doing business with IDS in the past five years. This is the first time that CPA encountered problems with the company.

Norita said that CPA has to outsource its payroll processing for easier management. He said CPA may look for another accounting firm to handle the job if needed.

“IDS has to come to us and tell us what's going on. If it does not., we may look for another company,” said Norita.

CPA employs 220 personnel.

Jason Chon, accounting manager of World Resort, said the hotel's payroll is being withheld under the IDS account. To meet its obligations with its employees, “we will use our own check this pay period.”

Chon said IDS has not formally informed them why the funds are frozen. “They don't tell us. We ask them but they don't tell us. My guess is they have problems with IRS. That's only a guess,” said Chon.

“We will see if we want to keep them again as [business partner],” he added.

He said IDS has handled the hotel's payroll since the new management took over the facility a couple of years back. World Resort employs some 250 people.

For its part, Hotel Nikko Saipan has reportedly tapped its other accounts to pay off its employees. The hotel has nearly 200 personnel.

Pacific Islands Club comptroller Michael Burn said PIC has to find ways to solve the issue. “We've done other contingency measures to ensure that our people get paid,” he said. PIC has some 300 employees.

IDS maintains an office on Saipan but its headquarters is located in Tamuning, Guam.

When reached for comments, an account manager at IDS Guam who agreed to speak on condition of anonymity said that company comptroller Gil Miclat and manager Fe Dulay were “being interviewed by the FBI” yesterday.

When pressed about the company's failure to release the payroll, the staff said, “Our accounts are frozen.”