- - -

OF 

INSPECTOR GENERAL 

U.S.DEPARTMENT OF THE INTERIOR 

MANAGEMENT ADVISORY

Coronavirus Aid, Relief, and 

Economic Security Act Funds 

Awarded to the Republic of the

Marshall Islands

Report No.: 2020-WR-041-E October 2020
 

OFFICE OF 

INSPECTOR GENERAL 

U.S.DEPARTMENT Of THE INTERIOR 

Mr. Junior Patrick 

Auditor-General 

Office of the Auditor General – Marshall Islands 

Republic of the Marshall Islands 

P.O. Box 245 

Majuro, MH 96960 

Subject: Management Advisory – Coronavirus Aid, Relief, and Economic Security Act 

Funds Awarded to the Republic of the Marshall Islands 

Report No. 2020-WR-041-E 

Dear Mr. Patrick: 

Over the past few months, as a part of our oversight responsibilities, we have focused 

particularly on the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) 

appropriations to the U.S. Department of the Interior (DOI). We have provided a variety of 

resources and reports to the DOI addressing potential risks associated with the expenditure of 

these funds and have looked to our own past work to identify potential lessons learned that may 

be applicable now. We have likewise reviewed the Office of Insular Affairs’ (OIA’s) initial 

oversight steps for the CARES Act grant funds to the Insular Area governments. As part of those 

efforts, we also reviewed the Republic of the Marshall Islands’ grant documentation and 

pandemic plans and wanted to take this opportunity to share with you some of the lessons we 

have learned from auditing grant awards issued during emergency situations. In addition to these 

general lessons learned, we have attempted to contextualize this discussion by acknowledging 

some of the challenges unique to the Marshall Islands. We hope that our experiences may be 

helpful to your own future auditing efforts and would welcome the opportunity to continue 

working with you and your staff, whether through training programs or otherwise. 

Background 

The CARES Act provided the DOI with $756 million to support the needs of its 

programs, bureaus, Indian Country, and the Insular Areas. The OIA was allocated $55 million to 

be distributed to the seven Insular Area governments through its Technical Assistance Program 

(TAP) Office in April of this year, to help prepare for, prevent, and respond to the COVID-19 

pandemic. 

The Marshall Islands received $3.9 million of the CARES Act funds, to be expended by 

September 30, 2021. These amounts are in addition to the annual TAP distributions, which are 

usually smaller amounts, even considering that they cover 12 months rather than 18 months. For 

Office of Inspector General | Washington, DC 
 

 

 

example, in fiscal year (FY) 2019, the Marshall Islands received $1.79 million through TAP (see 

Figure 1).

1 

Figure 1: Funding the Marshall Islands Received Through TAP 

Pre- and Post-CARES Act 

$1.79 

million TAP Funds FY 2019 

$3.9 

million 

CARES Act Funds Available 

Through FY 2021 

As part of the award, the Marshall Islands must meet the grant terms and conditions, 

which include a requirement to document how it used the funds to prevent and respond to the 

pandemic and how the funds supported its pandemic plan. We summarize the grant terms and 

conditions in our attached CARES Act flash report (The Office of Insular Affairs Took 

Appropriate Action With CARES Act Funds) on the OIA’s initial actions related to CARES Act 

grant funds.2 

Monitoring Grants 

Our past work demonstrates that awards issued during emergency situations create risks 

because they are awarded quickly to respond to public need, often without competition and 

adequate cost and pricing determinations, and have a higher purchase threshold than other 

acquisitions. We believe that these previously identified risks are equally applicable to the 

CARES Act grant funds, and we accordingly encourage you to consider including these grants in 

your future audit planning efforts. Our previously mentioned flash report summarizes the steps 

that the OIA has taken to appropriately administer CARES Act funds, including providing 

specific guidance to the Insular Area governments. The report also includes a list of lessons and 

risks that we have identified and reported on from past audit work: 

• Ensuring sufficient workforce capacity

• Ensuring use of the appropriate award vehicle

1 In FY 2019, the OIA distributed an additional $8.2 million in TAP funding among the seven Insular Areas. 2 OIG Report No. 2020-WR-041, https://www.doioig.gov/sites/doioig.gov/files/DOIOIG_OIACARESAct_062520.pdf 

2 
 

 

• Maximizing competition in the source selection process

• Ensuring background research and risk assessments of potential recipients

• Monitoring documentation and use of funds by recipients

• Reviewing recipients’ performance and financial reports

We have also attached another recently issued CARES Act flash report (Lessons Learned 

for CARES Act Awards) that describes these lessons in more detail and hope that you will find 

this information helpful as you consider your future audit planning efforts.3 

Challenges Unique to the Marshall Islands 

We have summarized above some of the challenges we have identified that are associated 

generally with receipt of large amounts of funds in an emergency setting. We are well aware, 

however, that—even aside from the challenges created by the COVID-19 pandemic—the Insular 

Areas as a group face challenges that may heighten financial risks or otherwise strain their 

governments’ resources and ability to provide support in crisis situations. These concerns include 

economic dependence on a few key industries, scarce natural resources, shortages of skilled 

labor, and a reliance on Federal grants to fund basic services. In addition to these shared 

concerns applicable to the Insular Areas overall, we also know that the Marshall Islands faces its 

own unique set of challenges: 

• The Marshall Islands’ economy is dependent on public sector commerce such as

fisheries and transportation. Fisheries have seen a recent decline in imports and

revenue, while the transportation industry has been affected by the near complete

shutdown of airline travel due to the pandemic.

• A recent outbreak of dengue fever on several of the islands resulted in a travel

advisory and declaration of a health emergency. The Marshall Islands has made a

focused effort to eliminate and treat mosquito breeding grounds.

Taken together, these concerns can simultaneously increase the need for careful oversight 

but make it more difficult to provide. 

Conclusion 

Your office has a unique perspective on the particular challenges facing both the Insular 

Areas and the Marshall Islands. The additional risks associated with CARES Act grant funds can 

exacerbate those challenges and lead to a heightened need for oversight of these funds. I want to 

reiterate that we would be pleased to serve as an audit planning resource for your office. In the 

past, we have provided audit and investigative training and assistance to Insular Area public 

3 OIG Report No. 2020-FIN-037, 

https://www.doioig.gov/sites/doioig.gov/files/DOIOIG_CARESActLessonsLearned_052020.pdf 

3 
auditors, including audit and investigative assistance on requested projects to enhance 

professional proficiency. In addition, we have provided tailored training opportunities to audit 

and investigative staff in the Insular Areas to improve technical skills, and we presented 

information at the recent Association of Pacific Islands Public Auditors conference regarding 

fraud awareness and the importance of oversight. Given these experiences, which we believe 

were very positive for everyone, we want to express our commitment to help you identify highrisk areas associated with the CARES Act money your government received and to assist you in 

planning for CARES Act assignments. 

If you have any questions or would like to discuss any of these issues, please contact me 

at 202-208-5745. 

Sincerely, 

Mark Lee Greenblatt 

Inspector General 

Attachments (2) 

4 
Report Fraud, Waste,

and Mismanagement

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Government concern everyone: Office 

of Inspector General staff, departmental 

employees, and the general public. We 

actively solicit allegations of any 

inefficient and wasteful practices, fraud, 

and mismanagement related to 

departmental or Insular Area programs 

and operations. You can report 

allegations to us in several ways.

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 By Phone: 24-Hour Toll Free: 800-424-5081

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Office of Inspector General

Mail Stop 4428 MIB

1849 C Street, NW.

Washington, DC 20240