Government of the Federated States of Micronesia

Compact Grants Total $81 Million to FSM for FY09

$56.7 million will go toward Education, Health, Private and Environment sectors, while $24.3 million will go toward priority Infrastructure projects. Another $20.2 million contributed into Trust Fund.

PALIKIR, Pohnpei (FSM Information Service): March 13, 2008 - The US Office of Insular Affairs has informed the FSM Government that Compact sector grants totalling $81,129,280 will be available to the five FSM governments for their FY 2009 budgetary appropriations in the Compact-supported areas of Education, Health, Private Sector Development, Environment, Capacity Building, and Infrastructure.

The $81 million in total Compact sector funding support will be allocated to the five governments of the FSM in accordance with the agreed distribution formula between the four states and the national government. Each government will appropriate its share in accordance with their respective constitutional budget appropriation process for use in conformance with the overall terms of funds use that are set out in the Amended Compact of Free Association ("Compact II") between the FSM and the United States.

As agreed by the FSM and the US under Compact II, at least 30% of the FY 2009 Compact allocation, or $24,338,784, must be allocated toward Infrastructure, with Education and Health facilities taking a priority. This will leave a total of $56,790,496 for sector operating support, and possibly more as the budget figure for FY 2009 provided by the US Office of Insular Affairs does not yet include any potential carryover funds from FY2007 as those grants have not yet been closed out.

Accordingly, under the current division formula, in FY 2009 Chuuk State will receive a total of $30,912,901 from Compact sectoral support funding, of which $21,580,388 will be available for government operational support in the areas of Education, Health, Private Sector Development, Environment and Capacity Building. Pohnpei will receive a total of $20,589,619 with $14,373,675 to be available for government operational funding, while Yap State will receive $12,345,124 of which $8,967,219 will be for operational support. Kosrae State will get a total of $8,867,122 of which $6,190,164 will be available for budgetary support. The FSM national government's share in FY 2009 will be $7,914,514 of which $5,679,050 will be available for operations.

In addition to the allocations to the annual government operating grants, the US Office of Insular Affairs also confirmed that the United States will contribute $20,282,320 to the FSM Trust Fund in FY 2009.