GAO cites weaknesses in compact impact reporting

The U.S. Government Accountability Office has found weaknesses that “reduce” the accuracy of the methods used by some affected jurisdictions such as the CNMI, Guam, and Hawaii in “collecting and reporting” on the impact of migration from the Freely Associated States.

GAO, the investigative arm of the U.S. Congress, released on Monday a report titled, “Compacts of Free Association: Improvements Needed to Assess and Address Growing Migration.”

The report, prepared by David B. Gootnick, GAO director for International Affairs and Trade, said some of the affected jurisdictions “did not accurately define compact migrants, account for federal funding that supplemented local expenditures, or include revenue received from compact migrants.”

Affected jurisdictions have been saying that the amount they get from the U.S. government as reimbursement for the costs associated with hosting FAS citizens is far lower than the actual costs they have incurred.

But GAO’s report found weaknesses in the methods used to collect and report the migration impacts.

Although the U.S. Department of the Interior is required to report to Congress any compact impacts that the affected jurisdictions report to the Interior, GAO said that DOI “has not provided the affected jurisdictions with adequate guidance on estimating compact impact.”

“Compact migrants participate in local economies through employment, taxation and consumption, but data on these effects are limited,” GAO said.

$1 billion vs $120 million

The CNMI, Guam, and Hawaii reported more than $1 billion in costs associated with providing education, health, and social services to compact migrants for fiscal years 2004 through 2010.

But for the same period, the U.S. Department of the Interior awarded some $210 million in grants to these affected jurisdictions.

Of the $210 million that Interior awarded, some $33 million went to the CNMI, $102 million to Guam, and $75 million to Hawaii.

The CNMI hosted a fewer number of FAS migrants—from an estimated 3,570 in 2003 to only 2,100 in 2008.

The Interior grants were used by these jurisdictions mainly for budget support, projects, and purchases in the areas of education, health, and public safety.

Under the Compacts of Free Association between the U.S. and FAS—Palau, the Marshall Islands, and the Federated States of Micronesia—citizens of these countries are allowed to travel to the U.S. to live and work without a visa or work authorization.

There are roughly 56,000 compact migrants living in U.S. areas, based on combined data from the 2005-2009 American Community Survey and the required enumeration in 2008.

Gov. Benigno R. Fitial, in his letter to GAO’s Gootnick on Oct. 12, said the CNMI seeks to address compact impact issues with Interior/Office of Insular Affairs based on the recommendations provided by the GAO report.

“For the past few years, CNMI has voiced concerns over the disproportion in compact impact grant reimbursements. What the CNMI claims are not commensurate to what the U.S. Congress allocates, and the amount DOI/OIA reimburses,” Fitial said.

He said the CNMI generally agrees with the GAO report’s recommendations and further recommend that Interior/OIA consult with the CNMI on developing future guidelines.

Outspoken

In 2003, Congress gave funds to help offset FAS migration costs, but the CNMI, Guam, and Hawaii argue that the amount was not enough. Since then, other states, such as Arkansas, have seen significant FAS migration and felt the fiscal impact.

Early this year, GAO conducted fieldwork in the CNMI to evaluate the impact aid provided by Congress to offset the costs of FAS migration.

Delegate Gregorio Kilili Sablan joined his colleagues from Guam, Hawaii, Arkansas, and American Samoa in asking GAO to conduct the study.

Press secretary Angel Demapan, when asked for comment on the GAO report yesterday, said the CNMI has been outspoken in its concerns over several issues, including reimbursements for costs associated with compact migrants.

“While the CNMI welcomes FAS citizens, the compact agreement between FAS countries and the federal government provides free access to FAS citizens into the U.S. and its territories as well as basic services without adequate funding support to continue providing such services in the CNMI,” he said.

Demapan conceded that OIA did provide the CNMI with a reporting format to seek reimbursement for costs associated with services provided to FAS citizens. “However, the DOI-OIA, without much explanation, does not fully reimburse all costs associated with services provided to FAS citizens. The CNMI ends up incurring the remaining costs,” he added.

Demapan said the governor further recommends that DOI-OIA provide a clear reporting format as recommended by previous GAO reports.

“Furthermore, the governor believes that the assistance of the CNMI’s delegate to the U.S. Congress is needed to redress these issues and provide additional funding to cover costs associated with providing public services to FAS migrants from past to present,” he said.

Guam Delegate Madeleine Z. Bordallo, in a separate statement yesterday, said the GAO report “further highlights the challenges that local governments in Guam, Hawaii, and the CNMI have encountered in having to use local funds to cover the full cost of providing social services to compact migrants.”

“The current structure of the compacts is unsustainable for the affected jurisdictions, and I will urge the House Committee on Natural Resources to hold an oversight hearing to further examine the recommendations contained in this report. I hope that this will provide Congress with further guidance to make policy decisions and find ways to reduce the burden on local governments and increase Federal assistance to the affected jurisdictions,” Bordallo said.