An audit of an Asian Development Bank-supported project in the RMI shows that the vast majority of the money spent went to pay consultants.
This is confirmed by the Ernst & Young audit of the RMI government’s Public Financial Management Project, which was included in the RMI Auditor General’s recent 81st Semi-Annual Report to Nitijela.
The audit shows that between 2017 and September 30, 2023, $4,047,325 was spent on the project that supported work at the Ministry of Finance. Of this total amount spent, $3,788,757 was spent on “Consulting services,” the report said. This is 94 percent of the grant.
The one-year snapshot of FY2023, which ended September 30, 2023 was event more extreme in terms of spending for consultants. Of a total of $749,541 spent last year, $735,116 — or 98 percent — was spent on consulting services. A total of $1,572 was used for “training and capacity building” and $12,853 for “project management costs.”
The audit said the Ministry of Finance properly complied with the grant conditions in the use of its funding for FY2023.
It also said that the ministry had not documented that it had met the required $650,000 in in-kind matching counterpart contributions. The RMI showed counterpart in-kind contributions totally $67,016 over FY2022 and FY2023, about 10 percent of the grant requirement.
In other audit news:
An education improvement project for the Marshall Islands spent only half of the funding provided by the Asian Development Bank over six years.
The Improving the Quality of Basic Education in the North Pacific Project was originally to operate from 2017 until January 2024. As a consequence of apparent delays in project implementation during the Covid period, the ADB approved extending the project for two additional years, to January 31, 2026.
The audit by Ernst & Young included in the latest RMI Auditor General’s 81st Semi-Annual Report to Nitijela shows that the ADB allocated $6.5 million for the education improvement project. From 2017 through September 30, 2023, the project spent $3,296,022 — or slightly over half of the grant — leaving $3.2 million to spend from October 1, 2023 through January 31, 2026.
The audit shows that 35 percent — $1,114,122 — of this grant was spent on “consulting services.” Training and capacity building was the next highest expenditure at $1,059,690. This leaves $1.4 million for ongoing training activity.
Only $252,642 was spent on teaching supplies and resources, leaving $910,021 for this category through January 2026. Equipment spending totaled $129,443, with $61,326 leftover.
Project management costs amounted to $740,125 over six years, leaving $367,675.
The ADB approved $6.5 million for this project with the requirement that the RMI will provide counterpart in-kind contributions estimated at $1,000,000 in the form of recurrent costs such as office space, utilities, administration and support staff, and taxes and duties exemption, according to the audit. However, Ernst & Young audits said the RMI government’s “contributions cannot be reliably measured and fully quantified.”
The audit said that for FY2022 and FY2023 the RMI contributed a total of $251,598 in the form of income taxes and other personnel benefits, such as social security services and health insurance of national consultants.
The auditors said the Ministry of Education complied with ADB grant terms and conditions for FY2023.
The objective of the ADB-funded Improving the Quality of Basic Education Project is to:
- Address factors to improve the conditions for learning in the Marshall Islands.
- Build on the successes and lessons learned under the (earlier) Quality Primary Education in the North Pacific technical assistance.
- Allow for a more comprehensive and sustained approach required for effective reforms within the primary education sector.