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U.S. Suspends Some Compact Funding To Chuuk

Tuesday: August 12, 2008

The Department of Interior’s Office of Insular Affairs has suspended some funding under the Compact of Free Association for Chuuk state because of financial management problems.

U.S. Interior Department officials informed the Federated States of Micronesia national government that the action was taken effective August 4 and affects certain Compact sector grants for Chuuk state until sound financial management is restored in Chuuk, the FSM Information Services said.
 
The sectors affected by the suspension are Private Sector Development, Environment, and Public Sector Capacity Building.  The state agencies affected are the Department of Administrative Services, Marine Resources, Agriculture, EPA and Chuuk Visitor’s Bureau.  There is, however, an exemption provision for the Public Sector Capacity Building for Chuuk State’s Department of Administrative Services and certain functions at the Chuuk’s Office of Environment Protection Agency involving water testing and waste monitoring, an FSM Information Services release said.

“With the credibility of sound financial management at stake since the removal of the Director of Administrative Services, the national government and Chuuk State have been in consultation, especially at the technical level, in their efforts to resolve the issue,” the FSM Information Services release said. “The national government is also in close contact with the U.S. government offices and agencies concerned.
 
President Manny Mori who is currently heading the FSM delegation in Beijing for the Olympics had decided to shorten his visit to China and return to Chuuk to meet with the State’s leadership.  President Mori intends to impress upon the leadership the urgency to take full charge of ensuring that all Compact requirements and needed reforms agreed between Chuuk State and the national government are strictly adhered to, the release said.