Fiscal Year 2016 Annual Report and Audit for the Trust Fund for the FSM

WASHINGTON, D.C. (April 14, 2017) – The Trust Fund Committee of the Trust Fund for the People of the Federated States of Micronesia (the Fund) approved the Fiscal Year 2016 (FY16) Annual Report on April 1st. The FY16 Audited Financial Statements were completed by the independent auditor, Baker Tilly Virchow Krause, LLP, on March 27th and presented to the Committee on April 12th. Both reports were released to the respective governments.
The Fund’s restricted fiduciary net position value increased 17.5% to $466,938,730 for FY16 from
$397,313,588 for FY15. The increase was primarily due to contributions from the United States government ($28,288,800) and gross investment income from investments ($42,148,280). There was a net investment gain of $41,519,302.
The Fund had a weighted annual rate of return of 9.71%, following a loss of 2.59% for FY15 and three consecutive growth years: 9.1% for FY14, 14.4% for FY13, and 15.9% for FY12. Overall, on a performance basis, net of fees, the Fund has had a 4.96% return since inception, below the benchmark of 5.40%.
Total investment and administrative expenses decreased to 0.81% of restricted fiduciary net position in FY16 from 0.88% in FY15. Investment expenses increased in dollar value but decreased to 0.77% of restricted fiduciary net position from 0.81% in FY15. Administrative expenses decreased in dollar value and as a percent of restricted fiduciary net position to 0.04% from 0.07%.
The FY16 audit performed by Baker Tilly was completed on time and according to U.S Generally Accepted Auditing Standards and Generally Accepted Government Auditing Standards issued by the Comptroller General of the United States. There were no audit findings.
The Trust Fund for the People of the Federated States of Micronesia was established by the Compact of Free Association, as Amended, as codified in the Compact of Free Association Amendments Act of 2003 (U.S. Public Law 108-188, December 17, 2003). The Trust Fund’s purpose is to contribute to the economic advancement and long-term budgetary self-reliance of the FSM by providing a source of revenue for the government and the people of the Federated States of Micronesia when certain grants under the Amended Compact of Free Association expire in 2023.