United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2008-06-12 monographic deposited born digital 28 p. GA 1.13:GAO-08-858T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-08-858T P0b002ee18039e109 f:d08858t DGPO 2010-08-12 2011-03-28 GAOREPORTS-GAO-08-858T machine generated eng fdlp REPORT GAOREPORTS-GAO-08-858T GAO-08-858T Accountability Cost analysis Economic analysis Economic development Economically depressed areas Federal aid programs Federal aid to foreign countries Financial disclosure Financial management Financial statement audits Fiscal policies Foreign aid programs Foreign economic assistance Foreign financial assistance Foreign governments Funds management Internal controls International agreements International economic relations International relations Private sector Reporting requirements Trust funds Cost estimates Compact of Free Association Palau Testimony A82342 Since 1995, when the Compact of Free Association between Palau and the United States entered into force, U.S. aid to Palau has included assistance provided for in the compact and related subsidiary agreements--direct assistance to the Palau national government, including investment in a trust fund intended to provide $15 million annually from 2010 through 2044; federal postal, weather, and aviation services; and construction of a major road--with the U.S. interest of promoting Palau's self-sufficiency and economic advancement. U.S. assistance to Palau has also included discretionary federal programs, such as health, education, and infrastructure services, that are not provided for in the compact. Compact direct assistance is scheduled to expire on September 30, 2009. In addition, the related subsidiary agreement providing for federal services to Palau will expire on that date unless renewed or extended. At that time, Palau's annual withdrawals from its trust fund can increase from $5 million to $15 million. The compact mandates that the U.S. and Palau governments review the terms of the compact and its related agreements in 2009 and concur on any modifications to those terms. The Department of the Interior's (Interior) Office of Insular Affairs (OIA) has primary responsibility for monitoring and coordinating all U.S. assistance to Palau, and the Department of State (State) is responsible for government-to-government relations. To provide accountability for compact funds, the compact's related agreements require an annual audit of Palau's use of compact funds and require Palau to submit economic development plans, identifying planned expenditures of compact assistance, and annual reports on, among other topics, its implementation of these plans. The U.S. and Palau governments are also required to hold annual economic consultations to review Palau's progress toward self-sufficiency and to consult regarding Palau's trust fund every 5 years. My statement is based on our report, which was released this week. In this report, we examined (1) the provision of compact and other U.S. assistance to Palau in 1995-2009, (2) Palau's and U.S. agencies' efforts to provide accountability over Palau's use of federal funds, and (3) Palau's prospects for achieving economic self-sufficiency. We conducted this performance audit from October 2007 to June 2008 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-08-858T/html/GAOREPORTS-GAO-08-858T.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-08-858T/pdf/GAOREPORTS-GAO-08-858T.pdf GAO-08-858T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-08-858T Testimony GAO-08-858T; Compact of Free Association: U.S. Assistance to Palau, Accountability Over Assistance Provided, and Palau's Prospects For Economic Self-Sufficiency; Accountability Cost analysis Economic analysis Economic development Economically depressed areas Federal aid programs Federal aid to foreign countries Financial disclosure Financial management Financial statement audits Fiscal policies Foreign aid programs Foreign economic assistance Foreign financial assistance Foreign governments Funds management Internal controls International agreements International economic relations International relations Private sector Reporting requirements Trust funds Cost estimates Compact of Free Association Palau