During fiscal year 2008, 11 cases were referred to the FSM Department of Justice for action.
Haser Hainrick, FSM national public auditor, said the Compliance Investigation Division of his office, which conducts administrative and criminal investigation, handled 27 cases in FY 2008 that were narrowed down to 11 serious offenses.
Two cases — a $400,000 fund allocated for a municipal fishing project wherein fraudulent documents were used and a $6,000 dispensary funds diverted for personal use — were discovered through a tip-off from concerned citizens.
ONPA also found out that a $300,000 grant from the U.S. Department of the Interior for FSM’s secondary nutrition program was missing and unaccounted for.
This case was referred to the Justice Department for review and immediate action.
In yet another case, ONPA said the management of an agency entrusted with $30,000 worth of program funds embezzled the money.
The U.S. has given FSM more than $1.5 billion since the nation became a freely associated state 1986.
FSM and the U.S. revised their Compacts of Free Association in 2003, which entitles the island-nation to another round of financial assistance for the next 20 years.
But the U.S. wants a guarantee that the federal tax money it will give to FSM will be spent properly.
FSM must come up with comprehensive reporting requirements and performance measurements, remedies for non-compliance and increased oversight if it wants continued U.S. support.
The amended Compact also provides for the creation of a trust fund for the people of FSM to generate a reliable income stream for the island-nation after 2023.
