Government of the Federated States of Micronesia

President Mori responds to allegations of expenditure increase at the Executive Branch

Palikir, Pohnpei (FSM Information Services): January 13, 2012 - President Manny Mori sent a letter to Speaker Isaac V. Figir on January 6, 2011 responding to allegations by certain members of Congress that the costs of the operation of the Executive Branch increased substantially during the fiscal years 2007 to 2010.

In Senator David W. Panuelo's letter of December 13, 2010, he cautioned the President to take appropriate actions to curb the escalation of costs of running the Executive Branch. One particular claim was that the FY2010 expense level for the Department of Health and Social Affairs and the Department of Education went "over six times the level of expenditure in FY2007".

In response, President Mori agreed by acknowledging that there has been a cumulative increase in operation costs over the period indicated in the letter but that such increase was "certainly nowhere close to 50%" as alleged. On the contrary, the core operations of the Executive Branch from FY 2007 to FY 2010 was increased by 1,854,242 or16% with an average increase of 5% per year after other expenses such as salary reclassification, COLA benefits and others are factored in, the President stated.

The President stressed the need to carefully review the audit reports as there has been a change in reporting format for non-operation expenditures and expenses for "other national government programs" after FY07. These costs are presented in the audit reports subsequent to FY07 "as part of expenditure of the departments and agencies in the executive branch", irrespective of the fact that such funds cannot be used for the core operations of the Executive Branch.

"For instance, the $1.5 million for a Kosrae soft loan named the President as the allottee, which skewed the numbers by increasing the President's expenditure by over $2 million. An untrained eye would easily conclude that the President's spending went over the roof, without considering the fact that the Kosrae Loan was not part of President's core operation", the letter states.

The President also clarified that some other FY10 expenditures came about from Congressional appropriations where the President, heads of departments or heads of agencies were named as the allotees of such funds, increasing the level of expenditures for the affected departments and offices.

In closing, the President thanked the Congress "for being vigilant in ensuring a proper balance on government spending" and reiterated his recommendation that "public projects and social programs must have direct link to the Strategic Development Plan for the nation".

For further information on this release, please contact:

FSM Office of the President
Public Information: Press, Radio, Video
P.O Box 34
Palikir Station, Pohnpei, FM 96941
Tel.: (691) 320-2548/2092
Fax.: (691) 320-4356