United States General Accounting Office Single Audits Demonstrate Accountability Problems Over Compact Funds

Broderick, Tom; Friberg, Emil (2003). [www.gao.gov/cgi-bin/getrpt?GAO-04-7. United States General Accounting Office Single Audits Demonstrate Accountability Problems Over Compact Funds] (Report). Washington, DC: Government Accountability Office. p. 28.

• Has attachment: File:KGRD6HFC.pdf

Abstract: In 1986, the United States entered into a Compact of Free Association (Compact) that provided about $2.1 billion in U.S. assistance from 1987 through 2003 to the Pacific Island nations of the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI). GAO has issued a number of reports raising concerns about the effectiveness of this assistance. GAO was asked to review possible FSM and RMI misuse of Compact funds. We reviewed single audits for 1996 through 2000 and this report summarizes the audit results. GAO recommends that the Secretary of the Interior delegate responsibility to and hold the Office of Insular Affairs accountable for monitoring and reporting on FSM and RMI actions to address Compact-related single audit findings and initiating appropriate actions when the FSM or the RMI do not implement appropriate and adequate actions to correct Compact-related single audit findings in a timely manner. In commenting on this report, the Office of Insular Affairs of the Department of the Interior, FSM, and RMI agreed with our findings or conclusions and recommendations. They also cited the amended Compacts as mechanisms that should result in improved financial management over Compact assistance.