Compacts of Free Association:

Improvements Needed to Assess and Address Growing Migration

GAO-12-64: Published: Nov 14, 2011. Publicly Released: Nov 14, 2011.

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U.S. compacts with the freely associated states (FAS)--the Federated States of Micronesia (FSM), the Marshall Islands, and Palau--permit FAS citizens to migrate to the United States and its territories (U.S. areas) without regard to visa and labor certification requirements. Thousands of FAS citizens have migrated to U.S. areas (compact migrants)--particularly to the Commonwealth of the Northern Mariana Islands (CNMI), Guam, and Hawaii, which are defined as affected jurisdictions. In fiscal year 2004, Congress appropriated $30 million annually for 20 years to help defray affected jurisdictions' costs for migrant services (compact impact). Though not required, affected jurisdictions can report these costs to the Department of the Interior (Interior), which allocates the $30 million as impact grants in proportion to compact migrant enumerations required every 5 years. This report (1) describes compact migration, (2) reviews enumeration approaches, (3) evaluates impact reporting, and (4) reviews Interior grants related to compact impact. GAO reviewed U.S. agency data, recent enumerations, impact reports, and grants and it also interviewed officials, employers, and migrants in the affected jurisdictions.

Combined data from the U.S. Census Bureau's (Census) 2005-2009 American Community Survey (ACS) and the required enumeration in 2008 estimate that a total of roughly 56,000 compact migrants from the FSM, the Marshall Islands, and Palau--nearly a quarter of all FAS citizens--were living in U.S. areas. Compact migrants resided throughout U.S. areas, with approximately 58 percent of all compact migrants living in the affected jurisdictions. According to the 2008 required enumeration, compact migrant populations continued to grow in Guam and Hawaii and were roughly 12 percent of the population of Guam and 1 percent of the population of Hawaii. Working under agreements with Interior, Census used a different approach for the most recent enumeration than for prior enumerations, employing two methods in 2008: (1) a one-time survey in Guam and the CNMI and (2) a tabulation of existing multiyear ACS data for Hawaii. The affected jurisdictions opposed the change in approach. The 2008 approach allowed for determining the precision of the estimates but did not yield comparable results across jurisdictions or detailed information on compact migrants. Interior and Census officials have a preliminary plan for the required 2013 enumeration but Interior has not determined its cost or assessed its strengths and limitations. The methods used by affected jurisdictions to collect and report on compact impact have weaknesses that reduce their accuracy. For fiscal years 2004 through 2010, Hawaii, Guam and the CNMI reported more than $1 billion in costs associated with providing education, health, and social services to compact migrants. However, some jurisdictions did not accurately define compact migrants, account for federal funding that supplemented local expenditures, or include revenue received from compact migrants. Although Interior is required to report to Congress any compact impacts that the affected jurisdictions report to Interior, it has not provided the affected jurisdictions with adequate guidance on estimating compact impact. Compact migrants participate in local economies through employment, taxation and consumption, but data on these effects are limited. From fiscal years 2004 to 2010, Interior awarded approximately $210 million in compact impact grants to the affected jurisdictions, which used the funds primarily for budget support, projects, and purchases in the areas of education, health, and public safety. In Guam and Hawaii, government officials, service providers, and compact migrants discussed approaches to more directly address challenges related to migration by bridging language barriers, providing job training, and increasing access to services. The amended compacts also made available $808 million in sector grants for the FSM and the Marshall Islands from fiscal years 2004 to 2010. Sector grants are jointly allocated by the joint U.S.-FSM and U.S.-Marshall Islands management committees and have been used primarily in the FAS for health and education. Few sector grants directly address issues that concern compact migrants or the affected jurisdictions. The committees had not formally placed compact impact on their annual meeting agendas until 2011 and have not yet allocated any 2012 sector grant funds to directly address compact impact. GAO recommends that Interior assess the 2013 enumeration approach, disseminate adequate guidance on estimating compact impact, and encourage uses of grants that better address compact migrants' impact and needs. Interior generally agreed with the report but did not support the recommendation on grant uses.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In its November 2011 report, Compacts of Free Association: Improvements Needed to Assess and Address Growing Migration (GAO-12-64), GAO found that Interior's compact impact grants have generally been used for affected jurisdictions' budget support, projects, and purchases in the areas of education, health, and public safety. However, government officials, service providers, and compact migrants noted that the complex challenges confronting service providers and migrants could be more directly addressed. The U.S. Department of the Interior (Interior) disagreed with the recommendation, saying that the amended compacts' enabling legislation authorizes broad uses of compact impact grants and that it has chosen to respect the funding priorities of the governors. However, the three affected jurisdictions agreed with our report's recommendations. In February 2012 Interior provided information to GAO that reiterated the processes Interior's Office of Insular Affairs (OIA) has in place for reviewing and determining uses of compact impact grant funding, including discussions between OIA and the leadership of the recipient jurisdiction that may include evaluating current proposals and alternative uses that fit within the uses outlined by law. Expanding opportunities for discussion, in March 2012, OIA convened the first in a series of meetings that will help them implement the recommendation. The Pacific Island Leaders Addressing Compact Impact (PILACI) meeting was established to collaboratively develop meaningful strategies to address policy issues concerning the Compact of Free Association (COFA). Representatives of the three COFA nations and the affected jurisdictions of Guam, Hawaii, and the Commonwealth of the Northern Mariana Islands all participated in the March 2012 meeting. The PILACI meeting discussed issues of health, education, and other priority areas of compact impact. PILACI meeting presentations covered resource allocations and compact impact fund management for affected jurisdictions, and discussions included ways to leverage partnerships to develop a coordinated response to compact impact. PILACI also formalized a structure for coordinating outreach meetings with COFA citizens in affected U.S. jurisdictions. The PILACI meeting ended with a commitment to additional meetings to continue discussion of compact issues and will provide a mechanism for Interior to discuss and evaluate the use of compact impact grant funds on an ongoing basis.

    Recommendation: In order to promote the most effective use of compact impact grants, the Secretary of the Interior should work with the affected jurisdictions to evaluate the current use of grant funds and consider alternative uses of these grants to reduce compact impact.

    Agency Affected: Department of the Interior

  2. Status: Open

    Comments: In a January 13, 2012 letter, Interior provided a status update to GAO and the Congress on this recommendation. Interior stated that it generally concurred with the recommendation and that it would advise the governors of affected jurisdictions of possible guidelines to develop compact reports. In addition, Interior officials met with staff of the Senate Energy and Natural Resources Committee and GAO representatives on January 17, 2012 to discuss approaches to preparing this guidance. Interior targeted a completion date of September 15, 2012 for the guidance at that time. In March 2012, Interior met with three of the four governors of affected jurisdictions, Hawaii, the CNMI, and Guam. According to Interior, the governors reached the consensus that Hawaii would develop a template for developing guidelines by December 2012. Although the completion date was revised, as of August 2013, such guidance has not yet been prepared. Section 13 of S. 1237, as introduced June 27, 2013, would require Interior to identify the amount of compact impact costs in affected jurisdictions for the purpose of permitting the amount of impact cost to be used as in-kind contributions for federal grants. In its statement at a July 11, 2013 Senate Energy and Natural Resources committee hearing on S. 1237, Interior stated that it "has urged the governors [of affected jurisdictions] to develop consistent standards of reporting among themselves, including the definition of FAS migrants, accurate accounting of migrant costs to the affected government, and benefits received by the affected jurisdiction from employment, taxation and consumption." but that it opposed the enactment of Section 13. On August 20, 2013, Interior sent letters to all four governors of affected jurisdictions stating that it was available to provide comments on any guidelines for measurement that the governors may choose to develop and present. Simultaneously, Interior sent a letter to GAO stating that the governing law, P.L. 108-188, does not give Interior authority to mandate either measurement processes or the reporting of impacts to the Congress. Therefore, Interior stated that it is unable to ensure that guidelines for reports to Congress are completed by the affected jurisdictions and that it can take no further action. However, our report found that, though the guidelines were not required under the law, without such guidelines, there were a number of weaknesses in affected jurisdictions' reporting of compact impacts to Interior from 2004 through 2010 related to accuracy, adequacy of documentation, and comprehensiveness. We continue to believe that providing more rigorous guidelines to the affected jurisdictions and promoting their use for compact impact reports would increase the likelihood that Interior can provide reliable information on compact impacts to Congress.

    Recommendation: In order to strengthen its ability to collect, evaluate, and transmit reliable information to Congress, the Secretary of the Interior should disseminate guidelines to the affected jurisdictions that adequately address concepts essential to producing reliable impact estimates, and call for the affected jurisdictions to apply these guidelines when developing compact impact reports.

    Agency Affected: Department of the Interior

  3. Status: Closed - Implemented

    Comments: In January 2012, Interior concurred with our recommendation that it fully consider the strengths and limitations of its preliminary approach for the 2013 enumeration, weighing the cost of the approach with the need for data that will be fair as well as useful to the affected jurisdictions. In March 2012, to prepare for the 2013 enumeration approach, Interior received cost estimates from Census for multiple approaches to the enumeration ranging from a tabulation of existing data to an independent sample survey in Guam, Hawaii, and the CNMI. Interior also sought concurrence on the proposed approach in advance of the survey from each of the affected jurisdictions and modified its approach based on comments from Guam.

    Recommendation: In order to select the most appropriate approach for its next enumeration of compact migrants, the Secretary of the Interior should fully consider the strengths and limitations of its preliminary approach for 2013, weighing the cost of the approach with the need for data that will be fair as well as useful to the affected jurisdictions.

    Agency Affected: Department of the Interior

  4. Status: Open

    Comments: In January 2012, in a status update to GAO and the Congress, Interior stated that it generally concurred with this recommendation and that it will request the bi-lateral Joint Economic Management Committees (JEMs) to consider uses of compact funding for activities within the respective FAS country that may meet both goals. Each JEM included compact impact as a topic of discussion at the March 2012 JEM mid-year meeting. Interior stated that it urged each FAS to program fiscal year 2013 Compact funds in consideration of the adjustments of migrants by undertaking projects such as the preparation of educational materials and videos to help orient possible migrants to the U.S. On this basis Interior notified GAO in May 2012 that it considered the recommendation fully resolved and implemented. The September 2012 annual JEM meetings each included compact impact and ways to address it in their agendas for discussion, as did the subsequent March 2013 mid-year meetings. However, the August and September 2013 annual JEMs did not include compact impact on their agendas. As compact impact is an ongoing issue of concern to the Congress and affected jurisdictions GAO will hold this recommendation open pending reinstatement of compact impact as a continuing item to be addressed at future JEMs.

    Recommendation: In order to help mitigate compact impact and better assist FSM and Marshall Islands citizens who migrate to the United States, the Secretary of the Interior should work with the U.S.-FSM and U.S.-Marshall Islands joint management committees to consider uses of sector grants that would address the concerns of FSM and Marshallese migrants and the affected jurisdictions.

    Agency Affected: Department of the Interior

 

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