[Island Times] Palau Plans To Reestablish Compact Board Of Trustees
President: Board needed to protect fund, eliminate excessive withdrawals
By Aurea Gerundio-Dizon
KOROR, Palau (Island Times, May 2, 2013) – President Remengesau Jr. is looking forward to the re-establishment of the Compact of Free Association Board of Trustees in order to protect the trust fund.
Earlier reports showed Remengesau disclosed that previous administration had withdrawn more than the $5 million limit in FY 2011 and FY 2012.
The excess drawdown had caused delay in the release of US financial aid to Palau for FY 2013. According to Department of Interior Budget Officer Tom Bussanich, there is about $6 million in FY 2013 funding for Palau operations that is available for drawdown. But the US cannot release this until Palau returns the overdrawn amount from the trust fund.
Finance Min. Elbuchel Sadang said during the press conference Wednesday at Palau Wave radio station that the overdrawn amount was already returned to the trust fund.
Sadang said the source of funding was the local revenue. Therefore, right away, FY 2013 is short of $6 million.
“The reason why we are facing a problem with cash flow is because all of these drawdown, including excess drawdown, was withdrawn at the beginning of the year. There is no cash for us to use for the remainder of the next fiscal year. Right away we are short of $6million. The $5million was withdrawn in advance for FY 2013,” Sadang said.
Remengesau, in his first SORA, said that he believes that the events that have taken place in recent years have firmly established the need for COFA Board.
The president said he is pleased to learn that the Senate has already taken action by introducing a measure on this matter.
The bill that seeks to re-establish the COFA Board of Trustees, with five members to oversee the administration of the Trust Fund, already passed second reading in Senate on Wednesday.
Remengesau committed that, in the meantime, this administration will not be making withdrawals from the Compact trust fund in excess of what is permitted by law or that which is permitted under grant agreements with the United States.
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