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President Mori Signs $35 Million FSM Budget for FY2010

Palikir, Pohnpei (FSM Information Services): October 1, 2009 - On September 29, 2009, Vice President Alik signed Congressional Act No. 16-10 into Public Law No. 16-7 on behalf of President Manny Mori, approving the federal budget for Fiscal Year 2010 in the amount of $35,278,975. The Executive Branch had submitted a budget proposal for more than $39 million, but Congress approved a reduced figure.

The approved amount includes $3.8 million from the Education Sector Grant, $845,334 from the Health Sector Grant, $493,140 from the Capacity Building Sector Grant, all under the amended Compact, and the remainder from domestic revenue.

In addition to thanking the Speaker and all members of the FSM Congress for passing the FY 2010 budget act, President Mori transmitted a Presidential Statement raising a few concerns regarding certain portions of the budget act.

In the Presidential Statement, The President asserted that the budget act places restriction on the ability of allottees of funds under section 8 (Grants, Subsidies & Contributions) and section 9 (Capital and Human Resources). The President pointed out that while these restrictions do not raise a constitutional challenge, they will impinge upon the capacity of the allottees of funds to innovate in managing and allocating resources as needs arise. The President stated that the implication of the restriction is that Congress will have to amend the law every time reallocation of funds is required. President Mori is recommending that Congress re-examine this arduous process.

The Presidential Statement goes on to clarify that in addition to section 12 of the act, which states that "all funds appropriated by this act shall be allotted, managed, administered and accounted for in accordance with applicable law, including, but not limited to, the Financial Management Act of 1979," and since the act also appropriates money out of the sector grants made available to the FSM pursuant to the Compact, as amended, the Fiscal Procedures Agreement will be applicable as well. Therefore, the Executive Branch will interpret those line items appropriated out of the sector grants in a manner consistent with the Compact of Free Association, as amended.

Finally, President Mori expressed his concern over certain grant requests and capital and human resource development items that he believes were not afforded adequate consideration by the respective committees of Congress. He stated there was not ample justification provided for denying funding for certain items. The President also suggested further review of budget requests for scholarships, the Infrastructure Maintenance Fund, a Multipurpose Building, Rural Development, the Micronesian Conservation Trust, FSM Development (Capital) and Capital Complex Facilities Rehabilitation, in order to efficiently and cost-effectively provide the essential government services that FSM citizens deserve.