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Highlights

The United States has extended to Micronesia and the Marshall Islands a number of domestic programs in such critical areas as health care, education, job training, and telecommunications. GAO found that geographic, economic, and social conditions in both countries have limited the effectiveness of nine of the 13 programs, which were originally designed for the United States. Nine of the 13 programs experienced accountability problems, including theft or misuse of program funds. The two island nations lacked the administrative skills to meet the federal government's complex accountability requirements, and federal managers did not provide the necessary training. Although some federal agencies tried to provide oversight, their efforts at ensuring accountability fell short because of several factors, including time, distance, and travel costs and the relatively small size of the programs in the region.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Interior In order to assist congressional consideration of continued U.S. program operations in conjunction with its consideration of new economic assistance to the FSM and the RMI, the Departments of the Interior and State, in consultation with the relevant government agencies and the Federal Regional Council, should jointly report to Congress on (1) whether individual programs should be continued and for how long, with an exit strategy developed for any concluding program; (2) how local capabilities can be enhanced in order that the FSM and the RMI can provide the services; (3) how programs can be redesigned to work more effectively and efficiently, including the use of alternative mechanisms (such as grant consolidation, trust funds, foundations, or nonprofit organizations) to deliver the assistance; (4) how program coordination and accountability can be improved; (5) what government authority and resources are required to monitor and coordinate U.S. programs, grants, loans, and services; and (6) what the future roles and responsibilities of the Departments of the Interior and State should be in monitoring and coordinating U.S. programs, grants, loans, and services.
Closed - Not Implemented
No action taken.
Department of State In order to assist congressional consideration of continued U.S. program operations in conjunction with its consideration of new economic assistance to the FSM and the RMI, the Departments of the Interior and State, in consultation with the relevant government agencies and the Federal Regional Council, should jointly report to Congress on (1) whether individual programs should be continued and for how long, with an exit strategy developed for any concluding program; (2) how local capabilities can be enhanced in order that the FSM and the RMI can provide the services; (3) how programs can be redesigned to work more effectively and efficiently, including the use of alternative mechanisms (such as grant consolidation, trust funds, foundations, or nonprofit organizations) to deliver the assistance; (4) how program coordination and accountability can be improved; (5) what government authority and resources are required to monitor and coordinate U.S. programs, grants, loans, and services; and (6) what the future roles and responsibilities of the Departments of the Interior and State should be in monitoring and coordinating U.S. programs, grants, loans, and services.
Closed - Not Implemented
No action taken.

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