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«Compacts of Free Association with the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI) For Fiscal Year 2006 Table ...»

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The lack of national goals for the environment continued to hamper the evaluation of performance progress. Each state established its own strategic focus at the agency or office level and activities failed to reach overarching national goals for the sector. At its March 2006 meeting, the JEMCO received a report from OIA that the sector has no overarching goals or performance measures to guide funding at either the national or state level. The majority of funding has gone to personnel, with little left over for other needs.

For most of the first two and a half years of the amended Compact, a number of funded offices were either under-performing or not performing, based on reported activities. A major contributor to inefficient program performance has been a lack of cohesiveness and responsible management within the sectors.

OIA consequently recommended that JEMCO take the following actions: (1) not allocate sector grant funding to these agencies in fiscal year 2007, unless sector grant proposals are submitted in project-based format emphasizing specific deliverables and measurable

outcomes (a project-based budget format would include the following sections:

Introduction, Objective, Work Plan, Budget, Outcome (Output), Value of the Project to the Sector, and Link to the Strategic Development Plan), and (2) not allocate Compact sector funding in fiscal year 2007 in the event offices cannot demonstrate project-specific outcomes (outputs), and (3) ensure that offices receiving fiscal year 2007 allocations must dedicate no more than 70 percent of their budgets to salaries and budgets.

JEMCO implemented these recommendations in its fiscal year 2007 allocation of grant funds.

Private-Sector Development The FSM received an allocation of $4,038,910 for its private-sector development sector grant. This amount funded the basic operations of a number of different agencies to increase tourism, promote agriculture, and support small business.

The lack of national goals for the private sector development sector grant continued to hamper the evaluation of progress. Each state established its own strategic focus at the agency or office level and activities failed to reach overarching national goals for the sector. At its March 2006 meeting, the JEMCO received a report from OIA that the sector has no over-arching goals or performance measures to guide funding at either the national or state level. The majority of funding has gone to personnel, with little left over for other needs. For most of the first two and a half years of the Compact, a number of funded offices were either under-performing or not performing, based on reported activities. A major contributor to inefficient program performance has been a lack of cohesiveness and responsible management within the sectors.

OIA consequently recommended that JEMCO take the following actions: (1) not allocate sector grant funding to these agencies in fiscal year 2007 unless sector grant proposals are submitted in project-based format emphasizing specific deliverables and measurable

outcomes (a project-based budget format would include the following sections:

Introduction, Objective, Work Plan, Budget, Outcome (Output), Value of the Project to the Sector, and Link to the Strategic Development Plan), and (2) not allocate Compact sector funding in fiscal year 2007 in the event offices cannot demonstrate project-specific outcomes (outputs); and (3) ensure that offices receiving fiscal year 2007 allocations must dedicate no more than 70 percent of their budgets to salaries and budgets.

Department of the Interior Discretionary Grants

The FSM continues to be eligible for the discretionary grant programs of the Office of Insular Affairs (OIA) of the Department of the Interior. Although the amended Compact provides significant operational support in health and education and provides funds for capacity building, the government still has special short-term needs that can be effectively addressed by OIA’s programs.

In fiscal year 2006, OIA provided $419,460 in operations and maintenance grants for infrastructure covering repairs, training, equipment purchases, and expert consulting services. The sum of $693,231 was provided in Technical Assistance grants, including $500,000 for the continued implementation of a national financial management system.

Additional technical assistance funding was made available for an environmental assessment of a fiber optic cable project, medical, law enforcement and airport security operations. The FSM was also awarded two grants totaling $158,175 from the Coral Reef Initiative grant program.

Fiscal Year 2006 Allocations for the RMI The following is a breakdown of grant allocations to the RMI by sector and Compact of

Free Association, Section 211-mandated funding:

–  –  –

Education During fiscal year 2006, the RMI used Compact education sector funds to meet the following four elementary and secondary education goals and three post-secondary

education goals:

1. Continue to improve the curriculum at all levels of education in the RMI

2. Improve the effectiveness of all education staff and teachers in the RMI for all areas of education.

3. Improve student performance and learning outcomes through improved program delivery and community involvement.





4. Provide financial assistance to qualified students to pursue educational opportunities.

5. Improve the college curriculum

6. Improve the college campus environment.

7. Provide a sustainable college development plan.

The RMI Ministry of Education (MOE) identified and purchased textbooks and supplies in coordination with curriculum revisions, which include recently implemented educational standards, benchmarks, and learning expectations. New English language arts and mathematics textbooks were distributed in grades K-8. Mathematics and science textbooks were purchased and distributed to the high schools. A multi-year textbook purchasing plan is now in place.

Training of teachers on the new teaching materials took place. Twenty administrators and managers completed an on-line master’s degree in educational administration. Time clocks have been installed in all Majuro schools to address teacher absenteeism.

Preliminary results from re-testing teachers on English language skills indicate some improvement in written English. Intensive summer English institutes continued for the second year. The MOE faces challenges since over 40 percent of teachers have only a high school diploma.

The third year of universal Kindergarten expanded the program to 61 schools. Fourteen schools remain to implement the program. The locally developed, criterion referenced Marshall Islands Student Achievement Test (MISAT) is aligned to the elementary level standards and tested students in grades 3, 6, and 8. The MISAT for grade 10 is under development.

The MOE improved its use of the RMI Performance Based Budgeting system. Ministry staff members are developing measurable goals for each indicator. For the second year, the MOE submitted data on 17 of 20 indicators of educational performance. Comparison can now be made with last year’s baseline data. The need to clean and verify data received from schools is recognized as an MOE issue to address.

The College of the Marshall Islands (CMI) receives only three percent of Compact education sector funding. CMI made significant progress in addressing several accreditation issues. CMI was taken off “Show Cause” status and moved to “Probation” status. Marked improvements continue to be made addressing academic programming, faculty recruitment and retention, and delivery of student services. Several facility improvements are well under way.

Fiscal year 2006 Supplemental Education Grant funding to the RMI contributed to the seven goals cited. The grant award was again released late in the fiscal year due to late fiscal year 2006 appropriation, logistics issues regarding the transfer of funds from the U.S. Department of Education to the Department of the Interior, and because the RMI did not submit its plans for the use of the SEG funds until well into the fiscal year. The delays caused hardship to some education program.

Health

Compact funds provided approximately 38 percent of the total dollars available for health operations in fiscal year 2006. Although the Ministry of Health’s basic health sector grant increased by $741,221 over the previous year, this amount still did not make up for the $1 million decline between 2004 and 2005, the first two years of the Compact as amended. Increased general fund and special health fund appropriations initially offset the negative impact this reduction in Compact sector grant funding would have had on keeping up with inflation and coping with the loss of actual dollars. A suspension in general fund spending midway through the fiscal year placed an unexpected added strain on the Ministry’s overall budget and consequently on Compact resources.

While the Compact gives the RMI wide latitude in determining how and where to apply its grant resources, it stresses two specific objectives: (1) establish funding sustainability to operate community-based services and programs and hospitals that provide appropriate secondary care; and (2) reduce reliance on out-of-country medical referrals. Judged against these objectives, the performance of the Ministry of Health in fiscal year 2006 was mixed at best.

The Ministry began the process of analyzing expenditures associated with certain diseases such as diabetes but, to date, no attention has been given to revising the co-share fee structure that would enable the recouping of a greater share of money spent on health care. Costs are still heavily subsidized by employer-based social insurance payments, general funds, the Compact, and U.S. Federal grants. Although primary health care is the focus of the Ministry’s strategic mission and viewed as the principal means to improve health status, funding still has not followed policy.

In fiscal year 2006, hospital-based outlays for recurring costs and improvements continued to outpace those for public health, prevention, and outer island primary care services. The RMI consciously chose to upgrade its secondary care facilities in Majuro and Ebeye. With these upgrades has come a concomitant need to spend to improve the quality of hospital services. The payoff has been service enhancements and greater attention to biomedical equipment acquisition that yield a broader range of services ultimately intended to reduce the country’s reliance on expensive out-of-country tertiary care.

Medical referral management underwent important changes. The RMI paid off its debt to Hawaii hospitals, entered into more cost-efficient agreements with Manila health care centers, and improved case management. Its direct referral expenditures decreased from $5,535,740 in 2000, to $1,742,696 in 2004, and $1,507,610 in 2005. Spending has become more efficient and better managed. While these efficiencies have been significant, improved diagnostic capacity paradoxically contributed to a higher number of patients sent out-of-country for specialized care. This trend of sending off more patients at less cost will likely continue until treatment and management capacity in Majuro and Ebeye become firmly established.

Compact grants did not affect primary care and public health outcomes to any significant degree in fiscal year 2006. For the most part, funds helped keep community-based disease prevention and control services stable. They were not applied in any new targeted fashion to address the nation’s burdensome chronic and infectious disease profile of high rates of diabetes, cancer, leprosy, tuberculosis, and sexually transmitted disease;

nor were they directed to support innovations that decrease teenage pregnancies or improve environmental safeguards to the spread of contagious disease.

The Ministry of Health continued to be a leader in implementing performance budgeting and monitoring in the RMI, and is just now reaping benefits in terms of increased accountability among managers and in information-led decision-making. Compact funds supported internal capacity building to determine the “measurability” of the outcomes;

establish timing targets and baselines; evaluate outcomes; and isolate and track progress in strategic areas such as hospital improvements and the delivery of preventive services and primary health care on Ebeye.

Public Infrastructure The RMI allocated $12,495,679 for infrastructure improvements and maintenance in fiscal year 2006. This allocation is consistent with the government’s policy that at least 30 percent of all annual Compact grants be directed to infrastructure development. To guide project selection, the RMI continued to utilize a comprehensive Infrastructure Development and Maintenance Program (IDMP), with complete project descriptions, timelines, financial requirements and measurable project indicators. Education is the priority sector targeted by Compact infrastructure assistance and has also received the largest portion of infrastructure development and maintenance funding over the past three years.

RMI Infrastructure Development and Maintenance Program projects listed below are for the Health and Education sectors with fiscal year 2004-2006 funding. Projects are mostly

multi-year and include construction, maintenance, and purchasing of equipment:



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