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MAJURO, Marshall Islands (March 11, 2000 – Marshall Islands Journal)---In an audit letter dated December 9, 1998, Deloitte and Touche auditors told the Utrik Atoll Local Government that it was unable to form an opinion about its financial status for the fiscal year ending September 30, 1996 because of "inadequacies in UALGov’s accounting records and internal control structure."

The Utrik local government was placed into receivership in December 1996.

The report said that auditors couldn’t get any written replies from UALGov in response to specific questions about financial statements, and requests for minutes, ordinances and resolutions of meetings held by the council between October 1, 1995 and December 9, 1998.

"UALGov declined to present a statement of cash flows for its nonexpendable trust fund and a statement of revenues, expenditures and changes in fund balances for the year ended September 30, 1996," the report said, adding that these statements "are required by generally accepted accounting principles."

It raised a number of questions about lack of internal controls and records and specifically questioned the 1996 distribution of $676,798 in Compact compensation funds because it said auditors were unable to get any supporting documentation, such as receipts, for these expenditures.

The audit also said that Utrik receives $1.5 million annually under the Compact, but had not satisfied U.S. audit requirements for the years 1990-1992, 1994 and 1995 by having these funds subject to an audit. "Due to the nature of this funding, a specific dollar amount cannot be questioned," the audit reported.

Aside from distributions, the audit said that there was no appropriate documentation for general fund expenditures in 1996 totaling $340,245.

The audit also noted that UALGov was not paying RMI taxes and Social Security, there was no evidence that there had been a council ordinance approved for an annual operations budget, and no timecards, personnel action forms, or allotment authorizations were prepared and used in 1996.

The Marshall Islands Journal, Box 14, Majuro, Marshall Islands 96960 E-mail: journal@ntamar.com  Subscriptions (weekly): 1 year US $87.00; international $213.00 (air mail).

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