United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office National Security and International Affairs Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2000-09-21 monographic deposited born digital 156 p. GA 1.13:NSIAD-00-216 https://www.govinfo.gov/app/details/GAOREPORTS-NSIAD-00-216 P0b002ee1803a4623 f:ns00216 DGPO 2010-08-12 2011-03-28 GAOREPORTS-NSIAD-00-216 machine generated eng fdlp REPORT GAOREPORTS-NSIAD-00-216 NSIAD-00-216 Territories and possessions Program graduation Foreign economic assistance Reporting requirements International agreements Accountability International relations Foreign governments Financial management Economic development Marshall Islands Compact of Free Association with Micronesia Micronesia Trust Territory of the Pacific Islands Kwajalein Atoll (Marshall Islands) Pell Grant UN Development Program Chapter Report NSIAD Pursuant to a congressional request, GAO reviewed foreign assistance, focusing on the: (1) use of the Compact of Free Association funding by the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI) between fiscal years 1987 and 1998; (2) progress both nations have made in advancing economic self-sufficiency; (3) role of Compact funds in supporting economic progress; and (4) extent of accountability by the two nations and the United States over Compact expenditures.<p/>GAO noted that: (1) Compact funds were used for general government operations, capital projects such as building roads or investing in businesses, making debt payments, and improving targeted sectors such as energy and communications; (2) while FMS concentrated much of its spending on supporting government activities, the RMI emphasized capital spending; (3) since 1987, the two countries, particularly FSM, have made some progress in achieving economic self-sufficiency, as measured by their governments' lower reliance on U.S. funding; (4) however, both countries remain highly dependent on U.S. assistance, which still provides more than half of total government revenues in each country; (5) scheduled decreases in Compact funding as well as increases in locally generated funds have reduced reliance on U.S. funding; (6) although the amount of Compact funding has decreased since 1987 as required by the terms of the Compact, both countries have received other U.S. funding through their use of U.S. federal services and programs; (7) Compact expenditures to date have led to little improvement in economic development in FSM and RMI; (8) per capita incomes have stagnated in FSM and fallen in RMI; (9) Compact funds spent to support general government operations have maintained high government wages and a large level of public sector employment that has discouraged private sector growth; (10) Compact spending to create and improve infrastructure has not contributed to significant economic growth; (11) in addition, Compact-funded business ventures have generally failed; (12) while the Compact set out specific obligations for reporting and consulting regarding the use of Compact funds, the governments of FSM, RMI, and the U.S. have provided limited accountability over Compact expenditures and have not ensured that funds were spent effectively or efficiently; (13) the U.S. government did not meet the Compact requirement to consult annually with both countries during the first 7 years of Compact assistance; (14) also, the Department of the Interior has devoted few resources to monitoring Compact assistance; and (15) disagreements between the Departments of State and the Interior limited monitoring, as did a Compact provision that guarantees funding to the two nations. https://www.govinfo.gov/content/pkg/GAOREPORTS-NSIAD-00-216/html/GAOREPORTS-NSIAD-00-216.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-NSIAD-00-216/pdf/GAOREPORTS-NSIAD-00-216.pdf GAO/NSIAD-00-216 https://www.govinfo.gov/app/details/GAOREPORTS-NSIAD-00-216 Chapter Report GAO/NSIAD-00-216; Foreign Assistance: U.S. Funds to Two Micronesian Nations; Territories and possessions Program graduation Foreign economic assistance Reporting requirements International agreements Accountability International relations Foreign governments Financial management Economic development Marshall Islands Compact of Free Association with Micronesia Micronesia Trust Territory of the Pacific Islands Kwajalein Atoll (Marshall Islands) Pell Grant UN Development Program Public Law 98-502 Public Law 104-156