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By Giff Johnson

MAJURO, Marshall Islands (Marianas Variety, April 3) — Hundreds of thousands of dollars in United States funding for education and preventive health programs in the Marshall Islands are not being spent each year, according to Ministry of Finance records.

But the Ministries of Health and Education have different stories, saying that the money is, in fact, being spent, but is not being properly charged to the different federal accounts managed by the Ministry of Finance.

A top Ministry of Finance official acknowledged that there is a communication problem with the two ministries, and said efforts are underway to resolve it.

According to Ministry of Finance information, more than $700,000 out of grants worth more than $1.5 million — or 45 percent of the total — was not spent from five preventive health grants received from the United States in fiscal years 2004 and 2005.

The apparent confusion over multi-million dollar U.S. government funding affects programs that are facing serious challenges: the Marshall Islands currently has the Pacific’s highest teen pregnancy rate at 17 percent annually, an increasing level of sexually transmitted diseases, low immunization levels, and poor academic results in public schools, according to recently released government statistics.

The grant money that the Ministry of Finance reports as unspent ranged from a high of 64 percent for the HIV prevention program to a low of 20 percent for the diabetes program. At least three other programs — family planning, immunization and sexually transmitted diseases — had unspent funds ranging from $144,000 to $229,000 for FYs2004 and 2005. FY2005 ended on Sept. 30 last year, and six months later, the Ministry of Finance still showed these amounts as unspent.

Ministry of Finance records also show that last year, the Ministry of Education spent only 15 percent — $201,000 — of a $1.5 million U.S. education grant aimed at improving teacher quality in the country, despite more than half the teaching force having only a high school diploma and no college degree. But Education officials dispute the Ministry of Finance information, claiming that more of the money was spent and saying it is a "reconciliation" problem with the Ministry of Finance.

Health Secretary Justina Langidrik said in an interview Friday that the amounts listed by Finance as "unspent" are actually for salaries of personnel in these five programs. "Finance is supposed to charge the salaries to these grants but they haven’t," she said.

Langidrik added that she has no idea what accounts the Ministry of Finance is using to pay the salaries of the Ministry’s staff in these programs. She said the problem has been an ongoing one between Health and Finance, despite her Ministry’s efforts to get a resolution.

There has been this problem of improperly charging one federal grant account for personnel who are supposed to be paid from another grant account, Bruce Bilimon, the assistant secretary for budget and finance at the Ministry of Finance, said. "For instance, Immunization grant personnel have been paid from the HIV grant," he said. "I gather that Ministry of Health assumes that Ministry of Finance should have been the one assigning personnel accounts for these grants. Either way, there is still a communication problem between Health and Finance and that’s what we are working towards resolving."

Bilimon helped to launch quarterly meetings of all Marshall Islands government’s U.S. federal grant managers last year, which he said is helping to bridge some of the communication problems among grant managers, as well as make sure everyone understands the regulations for the different U.S. federal grants.

The Marshall Islands receives close to $10 million annually in U.S. federal grant assistance in addition to about $50 million in other grants, trust fund contributions and rental payments for use of the U.S. missile testing range at Kwajalein Atoll.

Langidrik said one of the problems she sees with Ministry of Finance administration of federally funded grants for the Ministry of Health is that Finance often submits the incorrect reports to the U.S. agencies without prior review by the Ministry of Health. This situation puts Health at further risk of either losing or getting less federal funding, she said.

The Ministry of Health maintains its own accounting for each of its federal grants, Langidrik said. But when Health staff submit a purchase requisition to Finance, "they are often told that there is no money in the account," she said. Then, several months later, Finance officials will notify the Ministry of Health and ask, "why aren’t you guys using this money?" she said.

The Ministry of Health has asked Finance to let it directly manage its own federal funding, she said. Langidrik said she realizes this would require the Ministry of Health to hire more financial management staff. But "because the funding agencies are always on our back," the Ministry of Health is keen to take over from Finance, she said.

An initiative from the Ministry of Finance is to closely monitor the spending of each federal grant during mid-year and inform the program managers of their spending pattern, Bilimon said.

April 3, 2006

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