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FSM and US Conduct Annual Joint Budget Consultations

Palikir, Pohnpei (FSM Information Services): June 27, 2011 - Officials from the US and FSM National Governments recently held Joint Budget Consultations from June 6 to June 15 in the four states of the FSM. The annual consultations are a requirement under the Amended Compact and a critical step in the timeline of activities that lead up to the Annual JEMCO Meeting and ultimately the finalized Compact-funded budgets for the next fiscal year. During the course of the consultations, officials from both parties noted that the significance of the budget consultations lies in the spirit of partnership embodied in combined efforts at improving the implementation of resources and, thereby, of the goals outlined in the Amended Compact.

As part of the budget consultations, the issue of unallocated and "carry-over" funds was also addressed. At the most recent Midyear Meeting, JEMCO adopted a resolution outlining guidelines for the use of previously unallocated funds. The JEMCO Resolution specifically states that, "budget requests from the FSM for the use of previously unallocated funds should be a) non-recurrent in nature to avoid unsustainable increases in personnel or non-personnel operating budgets; b) allocable to any of the Compact sector grants; and c) presented in the prevailing "project-based proposal" format, or in the case of purchase of fixed assets or equipment, with a rationale and linkage to the relevant sector priorities."

The $8,165,662 unallocated amount available as State shares* for fiscal year 2012 has been moderately decreased to offset allocations made in the earlier days of the Amended Compact, i.e. for specific JEMCO-mandated tasks that were carried out and/or administered by the National Government. The FSM Office of SBOC and Department of Finance & Administration are now monitoring these variations to balance out applicable shares over the course of the next several years via regular updates of a Compact Tracking Tool, which was developed by the Office of SBOC in collaboration with the USDA Graduate School.

While the FSM has made progress in the area of reporting obligations, there are still numerous challenges in the general implementation of the Amended Compact. During the closing of the budget consultations, officials from SBOC's Division of Compact Management noted that while some of the seemingly relentless struggles are directly handled with the Office of Insular Affairs, there are finer details that must be dealt with internally, between and amongst the FSM's five governments. The FSM Office of SBOC looks forward to working closely with the five governments of the FSM, in collaboration with the US Department of Interior's Office of Insular Affairs, to improve the overall management and implementation of the Amended Compact.

For more information about this year's Annual Joint Budget Consultations, please contact the Division of Compact Management at the Office of Statistics, Budget and Economic Management, Overseas Development Assistance & Compact Management (SBOC) at (691) 320-6260 or email slowe@sboc.fm.

* Of the unallocated funding total of $8,165,662, available shares by government are as follows: Chuuk--$5,621,576; Kosrae--$586,573; Pohnpei--$429,920; Yap--$1,527,593.