Joint Economic Management Committee Meets in Chuuk

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WASHINGTON – Led by Joint Economic Management Committee (JEMCO) Chair and Office of Insular Affairs Director Nikolao Pula, both U.S. and Federated States of Micronesia (FSM) members of the JEMCO convened a mid-year meeting on March 19, 2019, in Chuuk, Federated States of Micronesia (FSM). As outlined in the Compact of Free Association, the JEMCO has several responsibilities, some of which are to review the following: 1) planning and budgeting documents for proposed funding through the Compact; 2) Single Audits; and 3) performance outcomes on prior year funding.

In Fiscal Year (FY) 2018, as provided for under the Compact of Free Association, the FSM Government received approximately $80 million in sector grant funding with an additional $30 million deposited in the Compact Trust Fund for the People of the Federated States of Micronesia. The primary sectors supported through the Compact are health, education, and public infrastructure. Distributions from the Compact Trust Fund are intended to replace direct financial assistance beginning in FY 2024.

“I am pleased with the progress reported at this year’s mid-year meeting,” said JEMCO Chair Nik Pula. “After many years of collaboration, it is satisfying to see trends moving in directions that we believe will ultimately benefit the people of the FSM and lay a solid foundation for the future.”

The JEMCO plans to reconvene in early September of 2019 to review budget proposals and allocate Compact financial assistance to support the FSM and its four state governments of Chuuk, Kosrae, Pohnpei, and Yap during FY 2020.

The meeting in Chuuk was well attended to include the U.S. Ambassador to the FSM Robert Riley, the newly-elected Governor of Kosrae Carson Sigrah, and Deputy Chief of Mission Jack Soram of the FSM Embassy in Washington, D.C. Officials from the national, state, executive and legislative branches of government also attended. Director of Chuuk State School System Graceful Enlet gave welcome remarks on behalf of Chuuk Governor Johnson Elimo who was unavailable due to a family emergency. 

More details on the recent meeting follow:

Single Audits

The JEMCO commended the leadership of FSM Secretary of Finance Sihna Lawrence and finance teams at the state government level for increased and continuing integrity in overall financial management related to the use of Compact financial grant assistance. In FY 2017 (the latest Single Audit available), out of an approximate $80 million provided under the Compact, $95,055 were considered questioned costs, a slight increase from $74,514 in FY 2016, and considerably improved from $1,366,703 million in FY 2014 and $3,027,274 in FY 2013.

Project Management for Public Infrastructure

Related to public infrastructure, the FSM government, with contracted technical assistance from the U.S. Army Corps of Engineers (USACE), has now established and fully staffed three out of five program management offices at the FSM national government level, Pohnpei, and Yap States. Kosrae State has hired the requisite professional staff with support staff pending hire, and the FSM and USACE are currently evaluating expressions of interest for an office in Chuuk State.

USACE continues to provide technical assistance for laying the foundation for the professional management of public infrastructure funding. Their support has also provided independent technical review of projects resulting in better designs, reduced cost overruns, and fewer disputes. FSM Project Management Unit leader Robert Goodwin reported that the FSM is developing common standards and procedures under an internationally-accepted building code for public infrastructure and are benefiting from expertise leveraged among the states. As more and more infrastructure projects begin to get underway, JEMCO members encouraged more systematic budgeting for infrastructure maintenance.

“It is gratifying to begin to see the fruits of professional project management and expertise leveraged in the use of Compact public sector infrastructure funding,” continued JEMCO Chair Pula. “I hope that Chuuk leadership will support efforts to ensure establishment of the Chuuk program management office and to expedite the use of infrastructure funds in Chuuk State. We want to ensure that the availability and use of Compact infrastructure funding translates into important opportunities for the people of Chuuk, and the FSM in general,” concluded Pula. 

Education

FSM national and state Departments of Education officials continue to make progress in their efforts to transition to electronic data management and systematic reporting on education performance. In 2016, with funding from Supplemental Education Grants (SEG) and in collaboration with technical assistance from the Asian Development Bank, the FSM began developing the FSM Education Management Information System (FedEMIS) to provide reliable data to leaders and educators in their policy and budget decision-making needs. FedEMIS is mostly functional at the State and National Departments of Education, with the school interface of the system, expected to roll out later in 2019.

The FSM Education system supports an average of 26,000 K-12 students across 187 school representing an annual enrollment rate of over 90 percent at the primary level. As of 2018, 92 percent of teachers possessed a college degree. All schools have been evaluated under the FSM School Accreditation Systems and continue to work towards improvements.

“There is always room for improvement, but over the years I have seen progress in the development education data,” said Chairman Pula. “I hope that policy makers and the community at large in the FSM demand this data and distribute it widely so that all can work together to inform improvements and strengthen schools. For our part, we’d like to see the FSM develop its goals under the key education performance indicators so that we will be assured as we conduct our responsibilities under the JEMCO process that Compact funding is making a good impact on education in the FSM.”

Health

Led by the FSM Secretary of Health Magdalena Walter, a team of health officials reported on the development of a central health database system for the FSM and transition to electronic health records collection. A server and hardware have been installed in Pohnpei State and will soon be completed in Kosrae, Yap, and Chuuk States. Plans are in place to install software and database applications by June 2019.

In the area of disease prevention and treatment, cases of Hansen’s disease (leprosy) have been on a steady decline since 2012, with less than 100 known cases across the FSM.

Challenges remain, however, in treating latent and active tuberculosis (TB) cases, especially in Chuuk, with known cases standing at 77 in 2018.  Ten years ago, with assistance from the JEMCO and other partners, Chuuk State was successful in managing an outbreak of multi-drug resistant tuberculosis, however, the islands of Weno and Tol in the Chuuk Lagoon continue to have among the highest incidences of TB in the U.S.-affiliated Pacific Islands. Successful in its efforts to treat the MDR-TB outbreak, Chuuk health officials expect similar success as they focus on early detection and treatment with the goal of a tuberculosis-free and leprosy-free Chuuk. The JEMCO allocated $1,618,213 in Compact assistance to support Chuuk in these efforts and $500,000 to support standardization in reporting on key health performance indicators in all four states.

The Department of the Interior is responsible for overseeing U.S. federal assistance provided to the Freely Associated States of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau under the Compacts of Free Association. Through the Office of the Assistant Secretary, Insular and International Affairs, and the Office of Insular Affairs these responsibilities are discharged on behalf of the Secretary of the Interior.

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