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Advanced notice of MOU termination sent to Chuuk State and Kosrae State by President Mori

Palikir, Pohnpei (FSM Information Services): December 12, 2011 - On December 6, President Manny Mori letters to T.H. Johnson Elimo, Governor of Chuuk State and T.H. Lyndon H. Jackson, Governor of Kosrae State, informing them of "our intention to terminate the MOU within six months of this notice", the President writes.

Two identical MOU's were executed between the FSM National Government and the named two States on April 5, 2007 to assist them in getting out of a stressful period of fiscal difficulty, cash flow problems and long term structural issues, the letter explains.

"During the term of the MOU, FSM National Government administers the state discretionary funds and took over the disbursement, accounting and reporting responsibilities for all pass-pass thru US Federal Program Grants", the President explains.

The President writes that having the MOU for nearly five years, he now believes Chuuk State and Kosrae State have the capabilities for administering their own federal grants affairs and states that the national government will assist in making sure reimbursement processes are complete and timely, avoiding "undue burden" on the two states.

The MOU has a provision on its required termination under Article VII (2) which states that "This MOU may be terminated by either party, with or without cause, upon the giving of six months advance notice, unless waiver or such notice is given in writing and agreed to by both parties".