First Compact JEMCO Meeting Concludes

Representatives of the Federated States of Micronesia and the United States gathered in Honolulu on Wednesday, August 11th, 2004 for the first regular meeting of the Joint Economic Management Committee (JEMCO). Attendees representing the FSM Office of the National Public Auditor included Haser Hainrick, National Public Auditor and Ryan Torvik, Audit Manager.

The JEMCO was established under the amendments to the Compact and was created primarily to strengthen management and accountability with regard to assistance provided under the Compact, as amended, and to promote the effective use of funding provided hereunder.

This first meeting of the JEMCO saw an abundance of issues being addressed with the primary focus directed at reviewing and approving the compact-funded portions of the FSM budgets and specific project requests. While a number of requests were either declined or modified by US members of the Committee, most of the FSM funding proposals were successfully adopted to enable Compact funding for FY 2005 to flow at levels negotiated in the Compact.

A number of issues proved to be particularly contentious, such as the use of Compact funds for new or existing land leases or purchases, use of the capacity building sector grant, and US insistence on strict adherence to the US Congress’ recommendation to establish infrastructure spending at a level of thirty percent of total Compact assistance.

Meetings of the JEMCO will be held periodically at the request of members, but are mandated under the Fiscal Procedures Agreement to take place at least once annually no later than 30 days before the beginning of each fiscal year.