Chuuk financial management update
PALIKIR, Pohnpei (FSMIS) — As part of its oversight responsibilities required under the Joint Economic Management Committee resolution on Chuuk financial management, the FSM Department of Finance regularly visits the Chuuk State Department of Administrative Services.
On June 17-1, Secretary Finley Perman and his key staff held meetings with the director of DAS, Jesse Mori, and some of his key staff.
During the meeting, Chuuk DAS provided an update on the FY 2008 audits.
It is expected that the FY2008 audits will be completed in time for the June 30 deadline.
DAS staff also expressed confidence that they expect an improvement in FY 2008 audit over FY 2007, which was an improvement over previous years.
Improvements in audits reflect wide-ranging improvements in financial management in Chuuk since the Aug. 2007 JEMCO resolution conditioning the flow of Compact funds on significant improvements in financial management in the state.
The outcome of the income tax reconciliation work between the FSM CTA staff and Chuuk DAS staff was also discussed at the meeting.
As a result of the findings from the reconciliation, Chuuk can expect the release of calendar year 2006 and 2008 refund checks for its employees sometime soon, with priority release of CY 2008 checks.
The issue of municipal CIP funds was also taken up at the meeting.
The requirements for the funds to be drawn down were clarified and a better understanding reached on the next steps that the state government needs to take.
These requirements and steps will be documented and communicated in a memo from DAS Director Mori.
Mori and his staff also provided an update on the budgetary out-turn of the state government during FY 2008, and budgetary outlook for FYs 2009 and 2010.
After running an operating surplus in FY 2007 the state ran an operating deficit in FY 2008 — mainly due to a loss on the investment earnings on the early retirement funds.
The financial performance to date indicates that an operating surplus for FY 2009 is very likely.
Also discussed in the meeting were the following: a proposal by Chuuk on securing land for public infrastructure projects, implementation of a second round of its reduction in force program, and status of un-liquidated obligations for FY2008.
During the meeting, Secretary Perman and Director Mori signed 11 checks totaling $94,499, mostly to vendors and some individuals for payment of prior year obligations incurred under various U.S. federal programs.
