ONPA Releases Audit Report on ADB Grant Assistance for Weno Water

The ONPA announces the release of Audit Report No. 2014-05, Audit of ADB Grant Assistance for Weno Water Supply Well Remediation Project funded by Japan Fund for Poverty Reduction (JFPR) for fiscal years 2012 and 2013.

The audit report is available for public viewing online at www.fsmopa.fm. Printed copies are available at the ONPA’s offices in Palikir, Pohnpei and on Weno, Chuuk.

Grant assistance from the JFPR was provided to the FSM National Government to improve the delivery of safe and secure water supply to the residents of Weno Island in Chuuk State. The
grant amounting to $980,000 was administered by the Asian Development Bank. The Department of Transportation, Communication & Infrastructure was the Executing Agency for
the project while the Chuuk Public Utility Corporation was the Implementing Agency.

The project started in 2009 and was completed in July 2012. As a result, 28 water wells were made operational, delivering safe and secure water supply to the residents of Weno Island.

We performed this financial audit in accordance with Government Auditing Standards, issued by the Comptroller General of the United States. Based on our audit, we expressed an unqualified
opinion on the financials for the years ended September 30, 2012 and 2013.

We also evaluated the internal controls related to financial reporting and found a number of deficiencies as follows:

 Segregation of duties was lacking over the control of cash       
     disbursements.

 Monitoring of reconciliations was not consistently performed.

 Manual checks were used for project disbursements instead of
     the MICR encoded checks      routinely used for most payments processed through DFA.
 

 Certificates of insurance were not maintained on file for     
     consulting and engineering
     contracts.

 The project maintained its funds in a non-interest bearing    
     checking account.

 The project did not submit the required quarterly and annual
      progress reports.

 Payments to suppliers directly paid (direct payments) by ADB
     were not recorded in the
     books of accounts of the FSM National Government.

 Disbursements from the Imprest Accounts were not
     replenished/liquidated timely.

The concerned Departments generally agreed with all the findings and recommendations except for the finding and recommendation regarding the use of Manual Checks. The Acting Secretary of the Department of Finance & Administration disagreed with the recommendation that automating the printing of checks would minimize the likelihood for fraud and misappropriation of assets.

The ONPA evaluated the response and is retaining the finding and recommendation about manual checks.

The concerned departments should take corrective actions to improve the deficiencies noted by
the audit.
 

Office of the National Public Auditor
P.O. Box PS-05
Palikir, Pohnpei FM 96941
Tel: 691.320.2862/2863; Fax 691.320.5482
Hotline: 691.320.6768; Website: www.fsmopa.fm

FSM Congress shows appreciation to First Speaker and approves two nominations

FSMIS (April 10, 2014): During the recently concluded Third Special Session, the fourteen Members of the Eighteenth Congress of the Federated States of Micronesia unanimously authored and approved a resolution, expressing appreciation to Mr. Bethwel Henry, the first elected Speaker of the Congress of the Federated States of Micronesia, for his "dedication and public service to his country".

The document refers to Mr. Henry as one "of the remaining 'Founding Fathers' of the Federated States of Micronesia, the group of Statesmen who forever changed the political landscape of Micronesia by establishing the foothold for the nations in the Micronesian archipelago to progress towards self-governance and sovereignty".

Two nomination resolutions also met congressional approval; a nomination for Mr. Kalwin Kephas to represent the State of Kosrae on the FSM Social Security Administration Board of Directors and for Mr. W-One Williander of Toleisom Island in Chuuk to be the FSM Election Commissioner in Chuuk State.

Mr. Kephas' resolution (C.R. 18-119) was introduced on January 22 and adopted on April 1.

The confirmation resolution for Mr. Williander (C.R. 18-130)  was introduced on January 31, during the Third Regular Session. Congress initially disapproved the nomination toward the end of the recently concluded 10-day special session, but subsequently reconsidered and confirmed it on March 31, two days before adjourning.

For further information, contact the FSM Information Office at 320-2548 or email fsmpio@mail.fm.

Senator Johnston of Australia expresses appreciation to FSM for taking part in the 100th International Fleet Review event

Senator David Johnston

FSMIS (April 8, 2014): In a November 13, 2013 letter to FSM Secretary of Justice Mrs. April Skilling, Senator David Johnston, Minister of Defence for the Australian Government, expressed his Government's appreciation for the participation of the Federated States of Micronesia in Australia's most recent International Fleet Review, celebrating the 100th anniversary of the Royal Navy's entry into Sydney Harbour.

The event, which took place on October 4, 2013, was hailed a "significant event for the Australian Defence Force and the Australian nation".

The FSS Micronesia represented the Nation's fleet at the maritime section of the FSM National Police, showcasing maneuver skills in such operation, acting among military vessels representing other participating countries.

Senator Johnston wrote, "Australia values its relationship with the Federated States of Micronesia and I welcome our security cooperation through the Pacific Patrol Boat Program...I look forward to our continuing engagement on Pacific issues and Defence participation at the Maritime Security Cooperation Talks in 2014".

The Maritime Security Cooperation Talks between Australia and the FSM were held on February 24 in Palikir.  

 

[Photo Attribute: Parliament of Australia Website at http://www.aph.gov.au/Senators_and_Members/Parliamentarian?MPID=00AON ]

For further information, email fsmpio@mail.fm.

Forward planning on SNLC Conference and nation-wide meetings with the Private Sector

Vice President Alik, left, and President Mori

FSMIS (April 8, 2014): Planning for upcoming events, Federated States of Micronesia President Manny Mori and Vice President Alik L. Alik held a joint meeting involving the Department of Resources and Development (R&D) and the Office of  Statistics, Budget and Economic Management, Overseas Development Assistance, and Compact Management (SBOC) on April 8 at the President's Conference Room.

The Department of R&D is the Secretariat for the FSM State and National Leadership Conference (SNLC) while the Office of SBOC serves as the Secretariat for the 2023 Planning Committee, which is chaired by the President.

Led by the President, the group tackled at the brainstorming stage preparatory discussions in stringing together the main issues to be addressed at the next convening of the SNLC.

Tentatively, the SNLC is scheduled to fit into the first week of the 4th Regular Session of the Eighteenth FSM Congress during the second week of May, 2014.  

Some of the main concerns viewed at the meeting included the need to address the expected budgetary shortfall for all FSM governments in 2024 after funding from the United States under the amended Compact is terminated; the difficulties in gaining concrete federation-wide commitments in progressing needed tax reform legislations; insufficient progress in improving the foreign investment climate; formulation of a framework for the proposed Set Aside Fund (Investment Development Fund) to help with the state of FSM-wide economy; etc.

This process involves the solicitation of inputs from the State Governments to be able to provide an agenda that reflects and integrates priorities from all parties for consideration of the SNLC.   The SNLC Secretariat was asked to expedite communications to the State Governments regarding this process.

At the latter part of the meeting, the President reviewed proposed timeline of activities to be taken up by the 2023 Planning Committee, namely the four Governors, the President and key Secretariat staff in the next couple of weeks.

The upcoming outreach meetings throughout the Nation will focus mainly on concrete economic activities that the Private Sector would prefer to concentrate on within the priority areas of agriculture, fisheries, tourism and renewable energy.

President Mori said the Government "must not dictate to the Private Sector" what investment or projects should be pursued.

The President agreed to moving ahead on the proposed itinerary put forth by the Secretariat, with outreach meetings to start in Chuuk, Yap, Kosrae and conclude in Pohnpei before the convening of the SNLC in May.

World Health Day 2014: “Vector-Borne Diseases”

World Health Day, celebrated on April 7^th every year, marks the founding of the World Health Organization in 1948 and is a unique opportunity to draw worldwide attention to a subject of major importance to global health.  In 2014, World Health Day focuses on vector-borne diseases.  Vector-borne diseases are illnesses caused by viruses and other germs that are transmitted by mosquitoes and other insects in human populations.

Vectors are organisms that transmit viruses and parasites from one infected person (or animal) to another, causing serious diseases in human populations. Many of these vectors are bloodsucking insects which ingest disease-producing microorganisms (pathogens) during a blood meal from an infected host (human or animal) and later inject it into a new host during their subsequent blood meal.  Mosquitoes are the best known disease vectors.  With just one bite they can transmit diseases such as Malaria, Dengue, Leismaniasis, Lyme disease, Yellow fever, Japanese encephalitis, Chikungunya, Zika, Filariasis, etc.  Other vectors include ticks, flies, fleas and bugs.

Every year there are more than 1 billion cases and over 1 million deaths from vector-borne diseases globally. Vector-borne diseases account for 17% of the estimated global burden of all infectious diseases. These diseases are commonly found in tropical and sub-tropical regions and places where access to sanitation systems is problematic.  Their distribution is determined by a complex dynamic of environmental and social factors.  The most deadly vector-borne disease, Malaria, caused an estimated 627,000 deaths in 2012.  Fortunately, the mosquito that carries this disease does not exist in FSM yet.  However, the world's fastest growing vector-borne disease is Dengue, with a 30 times increase in disease incidences over the last 50 years.

Globalization of travel and trade, and environmental challenges such as climate change are having a significant impact on disease transmission in recent years. Some diseases, such as dengue, Chikungunya and West Nile virus are emerging in countries where they were previously unknown.  As of March 24, 2014 the Pacific Public Health Surveillance Network reported at least one on-going outbreak of vector-borne disease (dengue, Chikungunya or Zika) in eleven (11) Pacific Island Countries plus Queensland, Australia.  There is currently an outbreak of Chikungunya in Yap State and as of March 20, 2014 the Yap Department of Health Services reported 1,711 cases from all the municipalities of the main island of Yap and three of the outer islands.  Outbreaks of dengue have occurred in Yap in 2004, 2007 and 2012, and in Kosrae in 1996 and 2013.  There were also two cases of dengue confirmed during a recent investigation of acute febrile illness in Chuuk in 2012.  It is likely that the main vectors (Aedes species of mosquito) for dengue, Chikungunya and Zika also exist in Chuuk and Pohnpei, so there is potential for an outbreak of these diseases if we do not take the necessary measures or actions to protect ourselves and our families from these serious vector-borne diseases.

Simple measures that can taken to protect people include the following:

Ø  Avoid mosquito or insect bites;

Ø  Use insect repellant;

Ø  Wear light-colored, long sleeved shirts and pants;

Ø  Sleep under an insect-treated bed net;

Ø  Install window screens;

Ø  Clean-up around homes and get rid of stagnant water from places where mosquitoes breed, such as in old containers (e.g., cans and coconut shells), flower pots and used tires;

Ø  Raise community and public awareness on vector-borne diseases; 

Ø  Avoid travel to areas where there is an outbreak of vector-borne disease; and,

Ø  Get vaccinated again yellow fever and Japanese encephalitis, if you travel to countries where they are endemic.

FSM Department of Health and Social Affairs and the World Health Organization, in partnership with States Department of Health Services and other States agencies, are raising public awareness on vector-borne diseases and other important public health issues beginning on April 7^th and beyond.  Though 2014 World Health Day is emphasizing the prevention and control of vector-borne diseases, the significance of this day to the overall and wellness of a person, a community and a population should be encouraged as a priority on this day and every day.

For more information on World Health Day and vector-borne diseases, please contact the respective Department of Health Services, Division of Public Health in your State or the FSM Department of Health and Social Affairs at the following numbers:

 

Yap Department of Health Services:                          350-2114/2115

Chuuk Department of Health Services:                      330-2210/2216/2217

Pohnpei Department of Health Services:                    320-2214/2215/2216

Kosrae Department of Health Services:                     370-3199

FSM Department of Health and Social Affairs:         320-2619/8300

Kosrae celebrates heritage and rallies in support of local talents and productivity

FSMIS (April 4, 201): The Kosrae State Fair kicked off its annual event on the 27th and 28th of March 2014 at Kosrae High School and the Kosrae Gymnasium with the purpose of advancing the role of trade and investment and cultural awareness. The theme of the fair entitled, “Tuhkeni Pahtok Kasrpacn Acn Sesr Ac Oiyac Mahtuh” roughly translates as, “Help sustain the resources and good tradition of our island”, which exemplifies important components of development, preservation and sustainability. According to State officials, the state fair has been held annually for more than a decade.

The two-­day fair that aimed to promote productivity, food security and cultural vibrancy has turned into an iconic event. With their government officials, traditional chiefs and distinguished guests, communities gathered to celebrate their highly regarded event. In opening the celebration, Lieutenant Governor Carson Sigrah conveyed his gratitude to all and highlighted his and the Government of Kosrae's appreciation to the President of the Federated States of Micronesia (FSM) for the FSM's support of the annual event. In addition to taking innovative steps, Lt. Governor Sigrah joined others in recognizing that long­-term effects is crucial to strengthening the state’s economic development.

“We need to know what resources we have available, what we can export or sell here to sustain our resources both naturally and financially.”

Director Steven George of the Department of Resources and Economic Affair (DREA) gave a few talking points that highlighted the core purpose of the event. Based on the productivity level, Mr. George congratulated participants and the community for successfully carrying out the Strategic Development Plan (SDP) done by state leaders. In such decisions, open collaboration is encouraged in areas critical to sustainability and resource development.

Representing the FSM Department of Resources and Development (R&D), Mr. Roger Mori, investment Advisor for the Department, congratulated the Leaders and people of Kosrae for their success in keeping this annual event. He went on to speak on the FSM National Trade Policy, stressing attention to the policy's vision as adopted by the FSM Congress in 2011.

“That vision is to encourage and facilitate local and foreign direct investment in agriculture, fisheries, tourism, human resources development and other supporting services to enable the private sector to produce value added, quality and competitive goods and services, both for local and the export markets, in order to promote export­led economic growth, self­-reliance and sustainable development, with the ultimate objective of creating employment, alleviating hardship and raising the living standards of FSM citizens.”

Mr. Mori said the National Government has been working with partner departments and agencies, such as the Department of Resource and Economic Affair (DREA) and the Chamber of Commerce in the State of Kosrae.

Among other activities with the exhibition of handicrafts and local dishes, a fishing tournament took place for two consecutive days prior to the state fair involving three categories: trolling,

vertical ­long-line and bottom fishing. Presentation of awards was announced at the end of the ceremony.

The traditional leader of Nett in Pohnpei, Isonahnken Salvador Iriarte, made a special appearance on the Cultural Day and delivered a speech to a gathering crowd of fairgoers. The Isonahnken, who spoke in his indigenous tongue at the start of his remarks, spoke on the importance and wisdom of culture and heritage.

“We must uphold and protect our customs and practices”, the high ranking Chief emphasized.

Commenting on how culture and heritage bridge the past and the future, the Isonahnken acknowledged three significant principles in the Pohnpeian tradition: the virtue of respect, responsibility and honesty, and pointed out that culture and heritage give full meaning to one's life.

Although Kosrae has experienced life-­cycle transitions from living under colonial powers and missionary influence, the Kosraean way of life endured and have forged lasting imprints amid historical challenges and the forces of modernization.

Lt. Governor Carson Sigrah presented awards for 7th and 8th graders in the English and Indigenous language while Isonahnken Iriarte awarded six float entries. Of the six floats that participated, there was a tie for first place between Utwe and Tafunsak.

As Kosrae State celebrated and remembered the ways of old and how they link the past with the future through the celebration of life, the annual state fair allowed spectators to increase awareness and experience Kosrae’s unique culture. 

"A Big Moment": President Mori signs the Telecommunication Liberalization bill into law

FSMIS (April 4, 2014): Federated States of Micronesia President Manny Mori signed the Telecommunication Liberalization bill on April 3 at the President's Conference Room. Vice President Alik L. Alik, Secretary of Transportation, Communication and Infrastructure Mr. Francis Itimai, Secretary of Justice Madame April Dawn Skilling, Secretary of Finance and Administration Mr. Kensley Ikosia, Chief of Staff Mr. Leo Falcam Jr., Assistant Secretary of Communications Mr. Jolden Johnnyboy, Mr. Scott Garvey, legal advisor for Customs and Tax Administration, and other staff members of the Office of the President witnessed the signing event.

Hailed a significant breakthrough and a turning-point, the liberalization bill  signifies a refreshed momentum in the Nation's effort to boost communication capacities, which affects all-around development, most especially in tourism, education, health and information.

After signing the bill, President Mori expressed gratitude to Congress and thanked the many individuals who played important roles throughout the process the past six months for the telecommunication objective the Government has been wrestling with for about seven years.

The President also expressed appreciation for the involvement of the FSM Telecommunication Corporation, which helped producing "a product of team-work".

President Mori said that the Telecom Liberalization bill, the Tax Reform proposals and the Airline Project being pursued by a taskforce are critical objectives for the Nation.

Like the President, Vice President Alik underscored his appreciation for the encouraging results in the reforming of the telecommunication sector. He also added that the 2023 Planning Committee being chaired by the President is another corner-stone undertaking that the Administration is very keen on. In  closing  his statement, he invited everyone to stay on course in support of the remaining endeavors.

Secretary Itimai called the occasion "a big moment" and also thanked Secretary Skilling, Mr. Scott Harvey and his Assistant Secretary, Mr. Johnnyboy for being on the front-line on the matter. He also congratulated the President and later told him that signing the bill makes his Directive of fiber optic connectivity to all the States inch closer to reality.

Secretary Skilling said she appreciates the dedication from Mr. Aaron Warren, an attorney at the FSM Department of Justice, who was instrumental in the drafting of the bill.

Wrapping up the exchange of comments, Chief of Staff Falcam said that while there is now a sense of relief with regards the signed liberalization bill, "the hard work has just begun". He said the bigger challenge remains in moving the new system into motion. In clear-cut tone, he summoned, "let's get to work".

A turning point in the history of telecommunication services in the FSM, sunset clause deadline pushed back till May

FSMIS (April 1, 2014): Federated States of Micronesia President Manny Mori indicated on March 26 his preference for Congress to focus on concluding its work on the Telecommunication Liberalization Bill and repealing the sunset clause in the Revenue Administration Act (RAA) during its Third Special Session.

In the morning of March 31, about fourteen hours before the sunset clause deadline was to kick into effect nullifying the tax reform initiatives, Congress voted one in favor and three against changing the tax reform deadline through State Delegation vote, prompting some Members to quickly rally for a last attempt before Speaker Dohsis Halbert called for a lunch-break.

Coming back to session at around 2:30pm after having a lunch meeting with President Mori and Vice President Alik at the Congress Hearing Room, Congress went through a reconsideration process and eventually chose to extend the sunset clause deadline to May 31, 2014.

Regarding such decision, a Member expressed that the two-months extension is simply to allow additional time for  Members to put into final terms their stance on the long-dragged tax regime change initiatives before the May regular session.

The President signed Public Law 18-51, the amended sunset clause, the evening of March 31, less than 8 hours before the deadline.

As for the Telecom Bill (as commonly known), the four State Delegations at Congress voted unanimously in favor of the bill after an amendment was made on the floor. The amendment had to do with altering certain provisions regarding the appointment of members for the regulatory authority that will govern and make regulations for the telecommunication sector for the Nation. As initially set, the FSM President has the sole authority to appoint and remove members of the authority. The floor amendment in its final form changes the specific section such that Congress would have the "advise and consent" power over the President's nomination. In other words, as in the case with the appointment of Cabinet and some board memberships, the Congress will have to confirm the President's appointments for members of the authority.

All along, Congress took the review of the voluminous reform bill very slowly to carefully review the many components of the legislation that sought to bring changes to a highly technical sector that is critical to the socio-economic status of the Nation.    

President Mori welcomes the news on Congress' decision to open up the telecommunications sector with the passage of the liberalization bill. The bill has gone through rigorous review by different entities including the FSM Telecommunication Corporation and undergone oversight and public hearings by the Congressional Standing Committee on Transportation and Communication.

Given President Mori's strong backing of the bill, it is anticipated that he will sign it into law.

The opening up of the telecommunications market is seen as a necessary catalyst for the Nation to not only access needed Information Communication Technology support from the World Bank but also for the obvious need to attract probable telecommunications service providers in a competitive setting with the aim of improving user-based service access and costs.  

Committee on Ways and Means holds oversight hearing with Tax Reform Taskforce

FSMIS (April 1, 2014): At around 1:30 in the afternoon of March 26, 2014, the Executive Steering Committee (ESC) for the FSM Tax Reform Project appeared in front of the Congressional Committee on Ways and Means at the Congress Committee Hearing Room in Palikir.

The hearing started out with a brief courtesy call on Congress Speaker Dohsis Halbert who thanked the Committee for their interest in meeting with him and noted the endeavors undertaken in progressing the tax reform movement up to the present.

Vice President Alik reciprocated complimentary remarks toward the Speaker and thanked him and Chairman Isaac Figir for the opportunity to appear before the Ways and Means Committee, availing time for both the ESC and the Committee to engage more on urgent matters relating to the over-10-year endeavor on reshaping the tax regime for the entire federation.

Discussions focused primarily on the March 31st deadline under the "sunset clause" of the Revenue Administration Act (RAA).

The ESC expressed its support of the request made by President Manny Mori in which he indicated to Congress his preference that the sunset clause be repealed from the act. However, the ESC also explained that it would settle for any decision that would prevent the triggering of the sunset clause and sustain the reform process.

Apart from deadline extension concerns, some Committee Members voiced skepticism over the proposed tax regime and asked that clear state-based scenarios be provided in terms of how these measures will directly impact consumers. Assisted by staff of the tax reform program office, Vice President Alik assured the Committee that apart from targeting acceptable revenue generation measures, the proposed regime also seeks to underpin potentials for a more business-friendly climate for local entrepreneurs and foreign investors. At present, not only are the governments running tax systems with varying characteristics, but also there remain several impediments that continue to hamper robust development and economic gains over the years.

A more sensitive point of discussion centered on the fact that Yap State and Pohnpei State, through their State Legislatures, have maintained their position against passing the Value Added Tax (VAT) legislation that the States of Chuuk and Kosrae have endorsed about a year ago. The ESC highlighted its interest in letting Chuuk and Kosrae implement the tax reform together with the FSM National Government. Through Chairman Figir, the Committee underscored caution against the tax reform implementation without having all the States endorsing the VAT as required by the sunset clause provision. This situation has created the stalemate for which some tax reform proponents, most notably the President himself, have called for affirmative action on removing the sunset clause from the RAA. Doing so will allow the incremental implementation of the reform measures by the entities that are ready while the other States continue assessing their respective position and possibly benefit from letting others test-run the proposed changes.

The hearing ended with both parties expressing mutual appreciation for the opportunity in engaging one another in face-to-face exchange of views and sharing of information.

FSM President Mori and State Governors review 2023 Planning Committee timeline of action

FSMIS (April 1, 2014): In the morning of March 27, Federated States of Micronesia President Manny Mori met with Governor John Ehsa, Pohnpei State; Governor Sebastian Anefal, Yap State; Governor Johnson Elimo, Chuuk State; and Governor Lyndon Jackson, Kosrae State in Palikir.

The Governors were in Pohnpei primarily for the meeting of the Tax Reform Taskforce Steering Committee held the day before.

President Mori, accompanied by Vice President Alik L. Alik, welcomed the Governors to Palikir and discussed a few matters relating to the activities of the 2023 Planning Committee along with its Secretariat.

With assistance from Chief of Staff Leo Falcam Jr., President Mori provided a review of the completed round of community outreach meetings throughout the Nation as part of the mandate that the 2023 Planning Committee is currently undertaking.

The President stressed that as the 2023 Planning Committee moves further along its timeline of action, more emphasis will be placed on engaging the Private Sector actively in identifying specific development targets and activities within the priority sectors of tourism, fisheries, agriculture and renewable energy to have a focused view on well-defined development agenda.

In furthering decisions of the 2011 FSM Economic Summit, the Leaders also emphasized the critical importance for the Governments, the Private Sector and relevant stakeholders to deepen efforts in identifying and removing impediments to growth and nurture an business-friendly climate to boost stability.

The President made mention of the need for the 2023 Planning Committee to review its timeline of actions and determine a more enabling funding level with the help of the Governors who comprise the Committee.

The Leaders also touched upon other pressing topics such as the Compact Trust Fund investment and the backlogging of Compact infrastructure development projects already identified by the State Governments through their respective infrastructure plans. The Leaders agreed to jointly address infrastructure development project concerns through a sanctioned body, in addition to normal procedures pertaining to the amended Compact.

Witnessing the Leaders discussions were members of the Unified Revenue Administration Board of Directors, a few staff of the Tax Reform Program Office.

For further information on the meeting, contact the FSM Information Office at 320-2548 or email fsmpio@mail.fm.