Press Release

Review of Congress-Funded Public Projects in Kosrae State

On October 29, 2007, the Office of the National Public Auditor released its report on the review of FSM Congress funded Public Projects in the State of Kosrae. With the guidance of National Public Auditor, Mr. Haser Hainrick, former Audit Manager, Ann T. Walker, and the team consisting of Audit Supervisor Donald Yamada, Eric Elias, AIC, Keller Phillip, Auditor I, Julinida Weital, Auditor I, and Aisi Mori, Auditor I released its report to the President, Speaker, Members of Congress, Governors of the four states and the general public.

The review of Congress funded public projects in Kosrae State was the first to be issued among a series of audit assignments scheduled for the current Fiscal Year 2008. Basically, it covers a review of Congressional appropriations for public projects for the State of Kosrae spanning the last two fiscal years from FY2005 to FY2006. During the process, the team reviewed every activity involving funds appropriated under Public Law 13-36.

During its Third Regular Session, the 13 th Congress of the FSM passed Public Law 13-36 which appropriated $2.8 million from local revenues (non-Compact) to fund social and economic development projects in the four FSM states. The funds were then allocated as $200,000 per member of Congress. Since Kosrae State sends two members to Congress, $400,000 was allocated for Kosrae's social and economic development projects. Subsequently, Kosrae State apportioned the funds into two sectors: $200,000 for state-wide projects and the other half for regional projects.

The team found that the review's objectives -- whether appropriate processes for reviewing and selecting projects were followed and whether implementations of CFSM public projects were in accordance with laws and regulations—were not meet.. In fact, the team found that Congress members did not have a formal process for selecting public projects nor did they use project selection standards commonly employed by other government authorities. Given the dire need to address such deviations, the team made a number of recommendations to both Congress and the state of Kosrae.