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Unqualified Opinion on Audit Report for the FSM National Government

Palikir, Pohnpei (FSM Information Services): July 12, 2010 - The FSM National Government joins the Pohnpei, Kosrae and Yap State Governments in obtaining an unqualified audit report for Fiscal Year 2009.

On July 6^th, 2010, Dan Fitzgerald, Managing Partner of Deloitte & Touche LLP - Guam, presented to President Mori and members of the Cabinet the highlights of the firm's Exit Report regarding the Audit of the FSM National Government's Financial Statements for the year ended September 30, 2009.

Overall, Fitzgerald claimed that Mori's Administration had "achieved very good results." Specifically, he mentioned that the FSM Government timely completed its audit and obtained an unqualified audit report for the first time since the government's inception in 1987. Fitzgerald also brought attention to the fact that the FSM Government had ended the year with a $5.1 million surplus in its operations results. "You have reason to celebrate," said Fitzgerald.

Fitzgerald mentioned that the Compact Trust Fund, which has a total fund balance of $9 million, reserved for the funding of future operations of the National Government commencing in fiscal year 2023, showed a 1.9% return on its investments. Fitzgerald noted that Mori's Administration had no direct control on these returns and they reflected the weakness in global financial markets; nevertheless, he affirmed the Administration can analyze the fund management more closely. The FSM (non-Compact) Trust Fund achieved a 9% return on its investments.

Two clear recommendations were outlined by Fitzgerald, both relevant to the relationships between the National Government and each State Government. The first recommendation emphasized the need to establish a systematic process for turning over the financial documents and the accounting of projects specific to the States. The second recommendation proposed setting up some form of Coordination Committee to oversee projects involving numerous National and State Departments. This Coordination Committee, said Fitzgerald, will be helpful in addressing US reporting requirements which will become more and more stringent in the future.

President Mori, in turn, congratulated the Department of Finance and the Office of Statistics, Budget, Overseas Aid and Compact Management, for their hard work. Mori also specified that his Administration was eager to perform a management audit of the government to report on the quality and effectiveness of the services being provided to FSM citizens.