By Haidee V. Eugenio
Variety Assistant Editor

THE investigative arm of the U.S. Congress says the Department of the Interior should do more to assist insular areas which “continue to lack accountability measures.”
The persistence of management problems in Indian and island community programs is one of highlights of the Government Accountability Office’s 31-page testimony on Friday to the U.S. House Committee on Natural Resources on Interior’s “Major Management Challenges.”
“The Department of the Interior has made progress in addressing challenges that the GAO has identified in such areas as developing and maintaining better data to manage the department’s programs and strengthening internal controls. However, numerous important problems remain,” said the GAO report prepared by its natural resources and environment director Robin M. Nazzaro.
The GAO’s Feb. 16 report came over a week after it testified before the U.S. Senate Energy and Natural Resources Committee in the Feb. 8 oversight hearing on CNMI labor, immigration, law enforcement and fiscal conditions.
“(Interior) could be doing more to assist the seven island communities — four U.S. territories and three sovereign island nations — with long-standing financial and program management deficiencies,” said the GAO.
The CNMI, for example, continues to have serious internal control and accountability problems that increase the risk of fraud, waste, abuse and mismanagement, the GAO said in its testimony to the U.S. Senate panel which has oversight over insular areas.
On Dec. 12, 2006, the GAO reported on serious economic, fiscal and financial accountability challenges facing the CNMI, Guam, American Samoa and the U.S. Virgin Islands.
These economic challenges stem from dependence on a few key industries, scarce natural resources, small domestic markets, limited infrastructure, shortages of skilled labor, and reliance on federal grants to fund basic services.
The GAO recommended two things to Interior to increase the effectiveness of the federal government’s assistance to insular areas.
First, increase coordination activities with officials from other federal grant-making agencies on issues of common concern relating to insular area governments such as single audit reports, high risk designations and deficiencies in financial management systems and practices.
Second, conduct formal periodic evaluations of Interior’s Office of Insular Affairs’ conferences and business opportunities missions, assessing their impact on creating private sector jobs and increasing insular area income.
“(Interior) agreed with our recommendations, stating that they were consistent with OIA’s top priorities and ongoing activities. We will continue to monitor OIA’s actions on our recommendations,” said the GAO.
OIA carries out Interior’s responsibilities for island communities like the CNMI.
OIA’s mission is to assist these areas in developing more efficient and effective government by providing financial and technical assistance and to help manage relations between the federal government and the island governments by promoting appropriate federal policies.
Island governments, according to the GAO, experience difficulties in accurately accounting for expenditures, collecting taxes and other revenues, controlling the level of expenditures, and delivering program services.
The GAO said OIA helps diversify and strengthen island economies by sponsoring conferences and business opportunities missions in the areas to attract U.S. businesses; “however, there has been little formal evaluation of these efforts.”
The GAO added that efforts to meet formidable fiscal challenges and build strong economies are hindered by financial reporting that does not provide timely and complete information to management and oversight officials for decision making.
The insular governments have also submitted required audits late, received disclaimer or qualified audit opinions, and had many serious internal control weaknesses identified.
“As a result of these problems, numerous federal agencies have designated these governments as high risk grantees. Interior and other federal agencies are working to help these governments improve their financial accountability, but more should be done,” said the GAO.
Besides the persistence of management problems in Indian and island community programs, other highlights of the GAO testimony on Interior noted: management of resource protection efforts need to be strengthened; land appraisals continue to fall short of standards; deferred maintenance backlogs need to be addressed; revenue collection needs more management attention; and contract and grant management lacks needed controls.