U.S. Provided $34.8 Million in Compact Grants to the Federated States of Micronesia for First Half of Fiscal Year 2017

WASHINGTON, D.C. (June 21, 2017) – In compliance with the Compact of Free Association agreement (Compact) between the United States and the Federated States of Micronesia (FSM), the U.S. Department of the Interior has remitted $34.8 million in assistance for the benefit of the people and government of the FSM for the first half of fiscal year 2017.  An additional deposit of $29.5 million was made to the Trust Fund for the People of the Federated States of Micronesia at the beginning of the fiscal year and $500,000 was provided for the annual single audit, as required under U.S. Public Law 108-188.

“These monies provide important funding assistance to the people of the Federated States of Micronesia,” said Acting Assistant Secretary for Insular Areas Nikolao Pula. “The Joint Economic Management Committee deliberates carefully every year to ensure that these funds are used for the FSM’s utmost benefit, particularly in health and education as agreed to under the Compact.” Pula is Chairman of the joint committee known also as the JEMCO.

“The people of the Federated States of Micronesia are grateful for the assistance provided by the United States under the terms of the Compact of Free Association for the socio-economic development of the FSM,” said FSM Ambassador to the U.S. Akillino Susaia. “I look forward to further strengthening our bilateral relationship for the mutual benefit of our peoples.”

Compact Education grants support the improvement of basic education services, providing nearly 100% funding for the primary and secondary level public education systems in the FSM.  Significant strides have been made by the JEMCO to streamline the transition of teachers in the FSM from civil-servant to contract status.  This support helps meet the teacher effectiveness and compliance requirements in the FSM Strategic Plan for the improvement of public education. 

Five percent of the annual Supplementary Education Grant is being leveraged by the FSM Government in collaboration with the Asian Development Bank and the Australian Government to support the development of centralized Education Management Information Systems and the collection of reliable education sector data across the four FSM states of Pohnpei, Chuuk, Kosrae and Yap.

Compact Health sector grants also support a significant portion of health budgets in the FSM, and have been prioritized towards eliminating leprosy and Multiple Drug Resistant Tuberculosis, and reducing diabetes-related hospitalizations.  The grants also support other primary and preventive care needs.

The smaller grants for Public Sector Capacity Building, the Environment, Private Sector Capacity Building and Disaster Emergency Assistance have funded projects to help communities improve management for water quality, develop crops for food and shoreline protection, promote tourism and provide assistance to existing and future business owners. Funds are also used to provide staff development and oversight by Certified Public Accountants in the finance and auditing offices.

The Enhanced Reporting and Accountability grant supports the FSM’s request for assistance in strengthening and bolstering the finance and budget offices in each of the four states and to address requirements under the Compact related to budgeting, financial accountability, and expanded financial and performance reporting.

All grants provided under the Compact are subject to a Single Audit as required annually by the U.S. Office of Management and Budget.  The contribution to the Trust Fund for the People of the Federated States of Micronesia continues to bolster an investment fund that was established to replace direct Compact grant funding that expires in FY2023.  For more information on the Trust Fund, please visit http://fsmcfatf.com/

The next meeting of the JEMCO will take place just prior to the new fiscal year when it will review budget proposals for fiscal year 2018. 

The Secretary of the Interior is responsible for coordinating federal policy with respect to the territories of the U.S. Virgin Islands, American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands, and administering and overseeing U.S. federal assistance provided to the freely associated states of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau under the Compacts of Free Association. The Assistant Secretary for Insular Areas and the Office of Insular Affairs (OIA) executes these responsibilities. OIA’s mission is to foster economic opportunities, promote government efficiency, and improve the quality of life for the people of the insular areas.

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