October 14-18, 2024 – Pohnpei, FSM – Over 70 representatives from budget offices and line departments across the four FSM States and the FSM National Government gathered in Pohnpei from October 14-18 for a workshop to address their roles and share early experiences under the 2023 Amendments to the Compact of Free Association. The workshop marks the first convening under the enhanced FSM role in the Compact budget process.
The workshop opened with welcoming remarks from Special Assistant to the President (SAP) on Compact Matters Mr. Kemsky Sigrah, who emphasized the importance of the gathering in demonstrating the FSM’s commitment to the new Compact agreement. He underscored the proactive approach needed to fulfill the FSM’s greater role in planning and accountability for Compact funds, urging participants to pour their “hearts and souls” into ensuring that the FY 2026 Annual Implementation Plan (AIP) reflects this commitment. The plan, due in July 2025, is a priority as state budget calls are already in progress.
Throughout the week, participants exchanged ideas on maximizing grant effectiveness under the new Compact terms. Key sessions featured updates on the FSM Strategic Development Plan (SDP), which will guide the nation’s economic development for the next 20 years, presented by Avalon Edward of the Department of Resources and Development.
Chief Adviser Leo A. Falcam, Jr., outlined the recent Compact Amendments, and Fritz Weilbacher of the Office of Compact Management led discussions on specific budget challenges faced by participants, focusing on technical elements such as reporting formats, reprogramming deadlines, and fund drawdowns. Dr. Sam Brazys, development economist and adviser, provided insight into the process for developing AIPs, linking these reports to the revised SDP starting in FY 2026.
Dr. Brazys also introduced new carryover funding provisions under the Compact Trust Fund Agreement, allowing unused funds to grow in a special interest-bearing sub-account for future needs.
Sectoral breakout sessions allowed participants to share best practices, coordinate on budget codes, and discuss deadlines for the FY 2024 Annual Performance Report, the first under the new Compact agreement. Participants identified the FY 2026 AIP as a pivotal opportunity for the FSM to assert ownership of the Compact budget process, integrating the new SDP and increased FSM authority.
At the closing session, Assistant Secretary John Sohs John introduced a harmonized budget data template for FSM State and National Governments, soon to be integrated into a new financial management system. Additionally, adviser Lance Laack demonstrated an online forms-based system to streamline data sharing between government offices, based on workshop feedback.
Mr. Sigrah closed the workshop by thanking participants on behalf of the Simina-Palik administration for their dedication, expressing optimism for continued collaboration, and proposing that similar gatherings be held regularly, potentially on an annual basis.
This workshop stands as a crucial step in the FSM’s path toward full engagement with the Compact’s budget process, ensuring alignment with national priorities and enhancing self-sufficiency and accountability in managing Compact resources.
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