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National audit finds $126,000 in Kosrae public projects unaccounted for and questions Congressional involvement
Bill Jaynes The Kaselehlie Press
October 19, 2026 PALIKIR, Pohnpei—The FSM Office of the National Public Auditor has identified more than $126,000 in public projects in Kosrae that government officials could not adequately account for, along with procurement practices involving the Kosrae Congressional Delegation Office that auditors said violated an FSM Supreme Court ruling restricting Congressional involvement in the implementation of public projects.
The findings appear in Report No. 2026-12, dated September 30, 2026, which examined public projects funded through FSM Congress appropriations for Kosrae between October 1, 2022, and March 31, 2025.
The inspection covered $4.67 million in expenditures, of which auditors selected approximately $950,000 for detailed testing. The report identified $126,234.59 in equipment and other public project purchases that could not be satisfactorily verified.
Among the questioned items were fishing boats, outboard motors, cellular phones, a laptop computer, solar streetlights, a riding mower, and two trucks.
The auditors did not conclude that all of the equipment had been stolen or that the entire amount represented a financial loss. Rather, they found that officials responsible for the projects could not produce sufficient evidence to establish that the items had been delivered to their intended recipients or otherwise properly accounted for.
In several instances, people identified in government disbursement records as beneficiaries told inspectors that they had never received the equipment.
The report listed six 19-foot fiberglass boats among the questioned purchases. According to the auditors, beneficiaries identified in the records said they had not received the boats. Another intended recipient reported not receiving a 40-horsepower outboard engine.
Five people listed as recipients of cellular phones said they had never received them. Another beneficiary reported not receiving a laptop computer.
The auditors also questioned $23,400 in solar streetlights. During the inspection, three municipal governments reported receiving none of the equipment, while one municipality confirmed receiving 30 lights. Of those, five had been installed at Kosrae Airport, and the remaining 25 were in storage.
In Utwe Municipality, inspectors were unable to reconcile records for a riding mower costing $5,920.49. Two riding mowers found during the inspection were inoperable and did not match the specifications of the equipment purchased under the project.
Records also showed the purchase of two 2007 Mazda Titan cargo trucks costing $30,178, but the vehicles identified by municipal officials did not match the project documentation.
The report attributed the problems to inadequate oversight by officials assigned to manage and inspect the projects.
Under FSM financial management regulations, designated project inspection officials are responsible for ensuring that public funds are properly accounted for and projects are completed as intended.
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The auditors found that those responsibilities had not been adequately carried out.
A second finding raised questions extending beyond missing or unverified equipment.
The auditors found that the Kosrae Congressional Delegation Office had participated directly in procurement and distribution activities for certain projects, particularly those involving fishing equipment and sewing machines.
According to the report, the delegation office participated in obtaining price quotations, coordinating with suppliers, selecting project recipients, and handling payments.
Although the Department of Finance and Administration issued checks in vendors’ names, delegation office personnel routinely collected the checks from the Finance Field Office before passing them to the vendors.
Finance personnel told auditors that the delegation office explained the practice as necessary to make copies for its records.
The auditors questioned whether those activities went beyond recordkeeping and amounted to the Congressional office assuming responsibilities legally assigned to project allottees and implementing officials.
The report cited the FSM Supreme Court’s 2001 decision in Udot Municipality v. FSM, which prohibited Congressional involvement in deciding which projects receive funding after Congress has already appropriated the money.
The auditors said the Kosrae delegation office’s participation in procurement and recipient selection violated that ruling.
The inspection also found inconsistent procurement documentation. Some price quotations were issued in the name of the Congressional Delegation Office, while others carried individual names. Certain records failed to identify intended recipients.
In other instances, recipient names had been crossed out and replaced without documentation explaining the changes or showing that they had been authorized.
The auditors said those practices created risks of favoritism, weakened financial controls, and made it more difficult to establish whether public funds had been used for their intended purposes.