Marshall Islands Correspondent

U.S. Ambassador to the Marshall Islands Roxanne Cabral speaking at an event in the Marshall Islands in April 2020.
Photo Courtesy of the Marshall Islands Journal

MAJURO, Marshall Islands — In the wake of an investigation by the U.S. Health and Human Services Department into spending of federal funds by Marshall Islands authorities, the U.S. Ambassador has asked top government leaders what they are doing to “safeguard” U.S. federal funds.

U.S. Ambassador to the Marshall Islands Roxanne Cabral said in comments to the media June 23 that the U.S. government takes allegations of misuse of federal government funds seriously.

Earlier this year, HHS opened an unprecedented investigation into the use of Substance Abuse and Mental Health Services Administration funding by the Majuro-based Single State Agency, which administers the US funding.

The HHS investigation, along with an earlier intervention by the Department of Interior to remove authority of a local government over an annual federal grant, comes as the Marshall Islands and the U.S. government are preparing to engage in negotiations to extend grant funding beyond the current 2023 expiration of the funding agreement in the Compact of Free Association.

The ambassador said she has made sure that top-level Marshall Islands leaders are fully aware of the U.S. concern about use of the SAMHSA funds.

“The SAMHSA program provides important services to Marshallese with mental health or substance abuse issues,” Cabral said. “It is critical to ensure these funds are spent for their intended purpose, or else those in need will be deprived of the care they deserve.”

SAMHSA comes under HHS and provides funding to the Single State Agency, which in turn issues funding to a variety of Marshall Islands non-profit programs, from schools to non-profit youth-related organizations.

SAMHSA officials in Washington earlier this year opened an investigation into more than $1 million in spending by the Single State Agency program in conjunction with the Kumit Bobrae Coalition — a community-based non-profit organization, which was questioned by Deloitte auditors. 

SAMHSA officials initially indicated they would release $50,000 so work could progress, while $450,000 was on hold pending resolution of a long list of audit findings. When Marshall Islands authorities did not reply to SAMHSA audit questions by a Feb. 26 deadline, SAMHSA responded by putting a hold on the $50,000 as well as the $450,000, effectively locking the Marshall Islands SAMHSA account, pending resolution of numerous problems identified by auditors in recent years.

The Marshall Islands did reply in April to a further round of SAMHSA inquiries but in a 10-page letter to Marshall Islands authorities on June 11, SAMHSA rejected every one of the responses as “not acceptable.”

The Ministry of Finance is now under notice to provide documentation and justification by July 12 for the issuance of 280 checks totaling more than $1 million.

Despite information submitted by the SSA office in response to HHS’s investigation, the U.S. agency said the Marshall Islands has not addressed the questioned costs from the 2016 and 2017 Kumit Bobrae audits at the transaction level. “They did not provide supporting source documentation for the questioned costs or provide any action taken to address the costs, i.e., adjustments, return of funds, etc.,” said the June 11 letter to Majuro authorities.

“This is especially concerning given the nature of some award costs [including] construction of capital assets on a privately owned island, cash disbursements to the Marshall Islands SSA Program Director while employed full-time by the Government of the Republic of the Marshall Islands, and purchases from related-party vendors.”

Cabral said, “The U.S. embassy has been closely engaged with our HHS colleagues to address this issue. The Marshall Islands government is fully aware of these allegations and I have personally expressed our concern to officials at the highest levels, including to the president, the ministers of foreign affairs and finance, the attorney general, the auditor general and key leaders in the Nitijela and asked what interim steps the Marshall Islands is planning to take to safeguard these funds.”

Although HHS officials declined to answer specific questions concerning the investigation, they did say “We echo the U.S. embassy’s recognition [of] the important role SAMHSA’s funding plays in establishing state and local governmental infrastructure to address substance use and mental health issues. SAMHSA funds must be spent for their intended purposes and any indications of misuse are taken seriously and addressed promptly.” mbj