Micronesia
Audit Profile: Office of the National Public Auditor of the Federated States of Micronesia
Background
In 1979, the FSM, a United Nations Trust Territory under the administration of the
United States, adopted a constitution. In 1986, the FSM attained independence under
a compact of free association with the United States, which was amended and renewed
in 2004.
In 1979, the Office of the National Public Auditor was established under article XII,
section 3, of the constitution of the FSM and title 55, chapter 5, of the FSM code.
The office seeks to enhance governance, accountability, and performance in the public
sector through the delivery of independent assurance and investigative services. Its mission
is to create an environment in which reports on the office’s audits and investigations
lead to improved government operations.
Legal Authority
The national public auditor is appointed by the president of the FSM with the advice
and consent of Congress and serves for a term of 4 years. An individual may be reappointed
for additional terms with the advice and consent of Congress. Congress may
remove the public auditor from office for cause by a two-thirds vote. In the event of
such a removal, the chief justice of the FSM Supreme Court appoints an acting public
auditor until a successor is confirmed.
The public auditor is authorized by statute to evaluate the adequacy and effectiveness
of management controls in accomplishing the national government’s policies, plans,
and directives. To that end, members of the Office of the National Public Auditor are
authorized to have full, free, and unrestricted access to all national government functions,
records, property, and personnel. This authority extends to states and nonprofit
organizations that receive funds from the national government.
The public auditor may choose to perform, or assist in performing, audits that are
requested by statute. He or she has exclusive audit jurisdiction over public funds of the
FSM national government. The public auditor may also, if funding is available, contract
for independent auditing services to be performed under his or her supervision when specialized expertise is required or auditing requirements are beyond the capacity
of the office’s staff. The public auditor may subpoena persons to appear before him or
her and question such persons, under oath, regarding the receipt and expenditure of
money, as well as any other relevant matters.
Duties
It is the public auditor’s duty to examine and inspect all books, records, files, papers,
documents, and financial affairs of each branch, department, office, agency board,
commission, bureau, and statutory authority of the national government and other
public legal entities, including state and nonprofit organizations receiving funds from
the national government.
The public auditor inspects and audits transactions, accounts, books, and other financial
records associated with any project, program, or activity receiving funds in whole
or in part from the national government’s public funds.
The public auditor may audit the records of any contractor performing public work
under a cost-reimbursement contract with the FSM to verify the fees assessed. Any
contractor performing public work under such a contract must maintain the records
necessary to establish the validity of costs charged to the national government.
The public auditor is also responsible for performing other audits specifically required
by statute.
The public auditor must file a report at least annually with the Congress and may
file other reports throughout the year at his or her discretion. All reports of the public
auditor are to be made available to the public.
Along with his or her audit reports, the public auditor may submit recommendations
on matters within his or her jurisdiction, including compliance or noncompliance with
laws governing the expenditures of public moneys and the need for amendments or
new laws to secure the efficient expenditure of public funds.
The public auditor must maintain a complete and accurate record of audit reports,
inspections, investigations, releases, audit work papers, and other material pertaining
to the office’s work.
Audit Reports
As required by government auditing standards, the Office of the National Public
Auditor prepares a written report for each audit performed. The report is issued to the
target agency so that it may address the report’s recommendations.
The reports generally include the audit’s objectives, scope, and methodology; a statement
that the audit was conducted in accordance with government auditing standards;
findings; and recommendations for corrective action. Management’s written response to the draft audit findings is also included. All audit reports issued since fiscal year
2000 are posted on the office’s Web site, as are selected earlier reports. In rare cases, a
report may not be posted for security or privacy reasons.
Organizational Structure
The Office of the National Public Auditor currently has 17 staff, including the national
public auditor. Its administrative division has three staff (an administrative officer, a
secretary, and a clerk). Its Audit Division has one audit manager, two audit supervisors
and eight auditors, and its Compliance Investigation Division (CID) has three employees
(a chief investigator and two staff).
Peer Review
The Office of the National Public Auditor is required to have a peer review at least
every 3 years by a member of the Association of Pacific Islands Public Auditors. The
Office of the National Public Auditor passed its last review in 2005. The review was
performed by the Office of the Public Auditor, Republic of Palau; the Territorial Auditor
of American Samoa; and a representative of the USDA Graduate School.
Strategic Plan 2004-2007
The office worked diligently to create a strategic plan for 2004-2007. This work gave
the office a more comprehensive understanding of its environment, its stakeholders’
needs, and its current capability to respond to those needs. Based on this understanding,
the office developed its strategies and actions for the next 3 years. Dr. Lowell
Kuehn, a consultant from Pacific Northwest Consulting Services, facilitated a weeklong
strategic planning process in Pohnpei in February 2005. All staff of the Office of
the National Public Auditor participated in the discussions. Dr. Kuehn also facilitated
the development of strategic plans for the supreme audit institutions of the Mariana
Islands and Guam.
For additional information, contact the Office of the Public Auditor:
Fax: ++691 320 54 82
E-mail: fsmopa@mail.fm