Wednesday, March 19, 2014

Governor Ehsa wants to set aside part of Compact sector grant increase, use some for "one -time-needs" for Pohnpei

FSMIS (March 19, 2014): On March 11, Federated States of Micronesia President Manny Mori met with Pohnpei State Governor John Ehsa over breakfast to discuss certain important matters.

Three days later, the President sent a letter to Governor Ehsa, commending his plan on how to utilize the increase in Compact sector grant for Pohpei State that resulted from a new allocation formula for such grant. That formula, which became effective six months ago through FSM Public Law 18-12,  reduces the FSM Government's share of Compact sector grants by 5 percent and redistributes the amount amongst the State Governments.

President Mori had conveyed to the State Governors his wish for the States to set aside the increase in their share into the FSM Compact Trust Fund under each State's sub-account.

During their breakfast meeting, Governor Ehsa indicated his plan to use part of the increase for Pohnpei State to address "one time needs" for his government and set aside the rest in the State's Compact Trust Fund sub-account.

 “I am pleased to note your plan to use portion of this for urgent one-time needs of the State Government, while setting aside the rest into Pohnpei State’s sub-account in the Compact Trust Fund (CTF).”

Both parties acknowledged that if control of budgetary practices is taken into practice, the allocation of Pohnpei State’s share of that money in FY2015 onward will have a positive impact on the State’s sub-account of the CTF.
Encouraging the exercise of fiscal discipline, the President said, “I applaud you for taking this position and I will lend support to making this intent a reality so that we can begin now without delay to ease the burden that awaits our governments in 2024 onward when the Compact sector grants are set to expire.”

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