[Mariana Business Journal] U.S. To Withhold Palau’s Annual COFA Grant Money
Previous administration withdrew in excess for 2011, 2012
By Bernadette Carreon
HAGÅTÑA, GUAM (Marianas Business Journal, May 6, 2013) – The United States Department of Interior will withhold the annual grant funding for Palau under the Compact of Free Association (COFA) after the previous administration withdrew funds in excess of $5 million in 2011 and 2012.
An April 8 letter from Tom Bussanich, budget officer of the Office of the Insular Affairs to the Palau president’s chief of staff Elbuchel Sadang, said the funds cannot be released unless or until the money overdrawn is returned.
Palau’s compact with the U.S. allows for a $5 million annual withdrawal from the Compact Trust Funds.
Those funds now total more than $150 million invested by the U.S. to supplement Palau’s budget.
Earlier Palau President Tommy E. Remengesau told reporters that former President Johnson Toribiong’s administration had withdrawn over $6 million from the $13.15 million annual grant for FY 2013 to cover Oct. 1, 2012 to March 31, 2013 leaving a balance of about $6 million.
Busanich said the $6 million can be withdrawn by Palau if the overdraft has been restored.
“My sense is the government is reconciling this matter as we speak,” Bussanich said. “I’m hopeful that the money can be returned to the fund as soon as possible. I realize this did not happen on your watch, and I am sure you are not happy about it. Please let me know how this is being settled.”
Remengesau took over the presidency in January 2013.
He told reporters that the government is looking into why money managers or banks were able to allow the withdrawal of money in excess of $5 million.
Following the statements of the president, Palau’s ministry of finance claimed the overdrawn money had already been paid back.
Marianas Business Journal
Copyright © 2013 Glimpses of Guam Inc., All Rights Reserved