Compacts of Free Association: Improvements Needed to Assess and Address Growing Migration
Published: 2011-11-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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.
section_title: What GAO Recommends
paragraphs: 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.

section_title: Letter
paragraphs: The Federated States of Micronesia (FSM), the Republic of the Marshall  Islands, and the Republic of Palau have entered into compacts of free  association with the United States. The compacts provide, among other  things, for citizens of these three freely associated states (FAS) to enter  and reside indefinitely in the United States, including its territories, without  regard to the Immigration and Nationality Act’s (INA) visa and labor  certification requirements. Since the compacts went into effect—in 1986  for the FSM and the Marshall Islands and 1994 for Palau—thousands of  migrants from these countries have established residence in U.S. areas,  particularly in Guam, Hawaii, and the Commonwealth of the Northern  Mariana Islands (CNMI).
In 2003, Congress approved amended compacts with the FSM and the  Marshall Islands. In the amended compacts’ enabling legislation,  Congress extended additional economic assistance to the two countries  and authorized and appropriated $30 million annually for 20 years for  grants to Guam, Hawaii, the CNMI, and American Samoa, which it  deemed “affected jurisdictions,” to help defray the cost of services to  compact migrants. Congress directed the Department of the Interior  (Interior) to divide these compact impact grants among the affected  jurisdictions in proportion to the most recent enumeration of those  compact migrants residing in each jurisdiction.
In 2003 and 2008, the U.S. Census Bureau (Census), working under an  agreement with Interior, performed the required enumerations, and Interior  plans another enumeration in 2013. However, affected jurisdictions have  expressed continuing concerns that they do not receive adequate  compensation for the growing cost of providing government services to  compact migrants. In addition, thousands of compact migrants have  moved to other states that are not eligible to receive compact impact  grants. Among these states, Arkansas has attracted many Marshallese  who have moved there for employment in the poultry industry.
At your request, this report (1) describes compact migration to the United  States; (2) reviews approaches to the required enumerations of compact  migrants; (3) evaluates impact reporting from the affected jurisdictions;  and (4) reviews Interior grants related to compact migration. Also at your  request, appendix II provides information on the growing Marshallese  migrant population of northwest Arkansas and their impact.
To prepare this report, we reviewed previous reports on compact  migration and cost estimation, Interior’s existing compact migrant  enumerations and impact reports, as well as the supporting  documentation and methodologies used to prepare the enumerations and  impact reports. We also interviewed officials at Interior, Census, and the  Department of State, as well as local and FAS government officials and  migrants in Guam, Hawaii, the CNMI, and Arkansas.
To approximate the dispersion of compact migrants, we purchased from  Census a special tabulation of their American Community Survey (ACS)  data gathered from 2005 to 2009. We assessed Interior and Census  approaches to required enumerations against the requirements of the  amended compacts’ enabling legislation and Office of Management and  Budget (OMB) guidelines. To assess compact impact cost reporting, we  reviewed affected jurisdictions’ impact reports since 2004 and compared  these reports to cost estimation criteria. To assess Interior’s guidance on  compact impact reporting and its congressional reporting, we reviewed the  requirements in the amended compacts’ enabling legislation and Interior’s  existing guidelines, and assessed the existing Interior congressional report.  To describe compact migrants’ role in the economy, we used data from  earlier FAS migrant surveys supplemented where possible with additional  information from local agencies and other literature. To assess Interior’s  compact impact grants, we reviewed the requirements of the amended  compacts’ enabling legislation, Interior’s Financial Assistance Manual, and  all Interior compact impact grant files. To identify relevant Interior grants to  the freely associated states, we collected grant allocation data and  discussed the grants with Interior officials. For complete details on our  scope and methodology, see appendix I.
subsections: section_title: Background
paragraphs: The FSM, the Marshall Islands, and Palau are among the smallest  countries in the world. In 2008, the three FAS had a combined resident  population of approximately 179,000—104,000 in the FSM, 54,000 in the  Marshall Islands, and 21,000 in Palau.
subsections: section_title: Establishment of Compacts of Free Association
paragraphs: In 1947, the United States entered into a trusteeship with the United  Nations and became the administering authority of the FSM, the  Marshall Islands, and Palau. The four states of the FSM voted in 1978  to become an independent nation, and the Marshall Islands established a  constitutional government and declared itself a republic in 1979. Both the  FSM and the Marshall Islands remained subject to the authority of the  United States under the trusteeship agreement until 1986, when a  Compact of Free Association went into effect between the United States  and the two nations. In 1994, Palau also entered a Compact of Free  Association with the United States and became a sovereign state.
Under the compacts, FAS citizens are exempt from meeting the visa and  labor certification requirements of the Immigration and Nationality Act (INA)  as amended. The migration provisions of the compacts allow compact  migrants to enter the United States (including all U.S. states, territories, and  possessions) and to lawfully work and establish residence indefinitely.
In addition, under the compacts, the United States provided economic  assistance, and access to certain federal services and programs, among  other things. Also under the compacts, the United States has a  responsibility for the defense of the FAS, and the compacts provide the  United States with exclusive military use rights in these countries. A  further compact-related agreement with the Marshall Islands secured the  United States access to the U.S. military facilities on Kwajalein Atoll,  which are used for missile testing and space tracking activities.
In the 1986 compacts’ enabling legislation, Congress stated that it was  not its intent to cause any adverse consequences for United States  territories and commonwealths and the state of Hawaii. Congress further  declared that it would act sympathetically and expeditiously to redress  any adverse consequences and authorized compensation for these areas  that might experience increased demands on their educational and social  services by compact migrants from the Marshall Islands and the FSM.  The legislation also required the President to report and make  recommendations annually to the Congress regarding adverse  consequences resulting from the compact and provide statistics on  compact migration. In November 2000, Congress made the submission of  annual impact reports optional and shifted the responsibility for preparing  compact impact reports from the President, with Interior as the  responsible agency, to the governors of Hawaii and the territories.
section_title: Amended Compacts, 2003
paragraphs: In December 2003, Congress approved the amended compacts with the  FSM and the Marshall Islands and took steps in the amended compacts’  enabling legislation to address compact migrant impact in U.S. areas. The  legislation restated Congress’s intent not to cause any adverse  consequences for the areas defined as affected jurisdictions—Guam,  Hawaii, the CNMI, and American Samoa.
The act authorized and appropriated $30 million for each fiscal year  from 2004 to 2023 for grants to the affected jurisdictions, to aid in  defraying costs incurred by these jurisdictions as a result of increased  demand for health, educational, social, or public safety services, or for  infrastructure related to such services, due to the residence of compact  migrants in their jurisdiction. Interior’s Office of Insular Affairs (OIA)  reviews the affected jurisdictions’ annual proposals for the use of the  funds and provides them to affected jurisdictions as grants. Grants are to  be used only for health, educational, social, or public safety services, or  infrastructure related to such services due to the residence of compact  migrants.
Under the amended compacts’ enabling legislation, the affected  jurisdictions are to receive their portion of the $30 million per year through  2023 in proportion to the number of compact migrants living there, as  determined by an enumeration to be undertaken by Interior and supervised  by Census or another organization at least every 5 years beginning in fiscal  year 2003. The act permits Interior to use up to $300,000 of the compact  impact funds, adjusted for inflation, for each enumeration.
The legislation defines the population to be enumerated as persons, or  those persons’ children under the age of 18, who pursuant to the  compacts are admitted to, or resident in, an affected jurisdiction as of the  date of the most recently published enumeration.
In contrast to the original compacts’ enabling legislation, the amended  compacts’ enabling legislation permits, but does not require, affected  jurisdictions to report on compact migrant impact. If Interior receives such  reports from the affected jurisdictions, it must submit reports to Congress  that include, among other things, the Governor’s comments and  Administration’s analysis of any such impacts.
Under the initial compacts with the FSM and the Marshall Islands, the  United States provided $2.1 billion in economic assistance to these  governments. Under the amended compacts, the United States will  provide an estimated combined total of $3.6 billion in economic  assistance, much of it in a form known as “sector grants,” in annually  decreasing amounts from 2004 through 2023. The amended compacts  require that the sector grants be targeted to sectors such as education,  health care, the environment, public sector capacity building, private  sector development, and public infrastructure, or for other sectors as  mutually agreed, with priority given to education and health.
The amended compacts also established two management committees,  the U.S.-Federated States of Micronesia Joint Economic Management  Committee and the U.S.-Republic of the Marshall Islands Joint Economic  Management and Financial Accountability Committee. Each committee  has two FAS representatives and three U.S. representatives from,  respectively, Interior, the Department of State, and the Department of  Health and Human Services, with the Interior representative serving as  chair. These committees review and approve compact grant allocations  and performance objectives for the upcoming year on an annual basis  and may attach conditions to the grants.
Figure 1 shows the locations of the FAS and the affected jurisdictions.
Census has gathered data through multiple efforts that can be used to  describe aspects of the FAS migration to U.S. areas. Data are currently  available through Census’s decennial censuses, which cover all U.S.  areas, and its American Community Survey (ACS), which covers the 50  states, the District of Columbia and Puerto Rico. In addition, under  agreements with Interior, Census has conducted special enumerations of  compact migrants in affected jurisdictions, such as in 2003 and the 2008  enumeration required by the amended compacts’ enabling legislation.  The next such required enumeration must occur by 2013.
The decennial census is an enumeration of the U.S. population that is  constitutionally required every 10 years. The 2010 decennial census data  was gathered as of a specific day: April 1, 2010.    The 2010 decennial census in the 50 states is a 10-question survey  that gathers limited demographic data such as sex, age, and race.  The 2010 decennial census race question provided multiple choices  for respondents to identify the race of each member of the household,  with one choice being “Other Pacific Islander.” Respondents could  identify multiple races for each individual and could further identify  themselves by writing in a specific race. The decennial census in the  50 states does not collect respondents’ place of birth or year of entry,  both of which are needed to identify those who arrived during the  period of the compacts and are defined as compact migrants by the  amended compacts’ enabling legislation.    Unlike the census in the 50 states, the decennial census in the insular  areas—including Guam and the CNMI—is a detailed survey that  collects a variety of demographic and economic information including  respondents’ place of birth and year of entry, both of which are  needed to identify compact migrants.
Begun in 2005, the ACS uses a series of monthly samples to produce  data for the same small areas of the United States (census tracts and  block groups) used in the decennial census and formerly surveyed via the  decennial census long form. To conduct the ACS, Census mails survey  forms to selected households and, if a household does not respond,  follows up by telephone and sometimes in person. Census then uses the  information obtained from the surveys to estimate results for the entire  population of larger areas that have a determined level of statistical  precision. The ACS collects a variety of demographic and economic  information on an ongoing basis, including data such as place of birth and  year of entry that can be used to identify compact migrants.
The ACS reports estimates from individual or multiple years of data rather  than point-in-time counts, such as the decennial census provides.
Interior has conducted four sets of enumerations of compact migrants in  affected jurisdictions. The 1993, 1998, and 2003 surveys used the  “snowball” technique; Census, working under an interagency agreement  with Interior, employed a two-pronged approach in 2008.
In the snowball technique used by Census for the 2003 survey  and by prior surveys, trained workers who spoke the FAS  languages asked the respondent in compact migrant households  for referrals to other compact migrant households until they had  surveyed every identified compact migrant. The surveys provided  a count of compact migrants and demographic information such  as employment, occupation, education, and reasons for migration.  The snowball technique is a nonprobability method.    The two-pronged approach used one approach in Guam and the  CNMI and another in Hawaii. In Guam and the CNMI, Census  designed a block sample probability surveyand collected only  the data needed to establish whether the respondents and th eir  children could be classified as compact migrants. Census used  the survey results to produce an estimate for each affected  jurisdiction’s population. data from the 2005, 2006, and 2007 ACS needed to identify  migrants and their children.
In the CNMI, Census surveyed only the island of Saipan. Because few migrants and  approximately 10 percent of the total CNMI population live on the CNMI’s other inhabited  islands Census estimated the migrant population on the other islands using data from the  2000 decennial census.
Interior for both enumerations. Census and Interior officials did not retain a  record of the cost of the 2003 snowball enumeration, but in 2011 the director  of the 2003 effort estimated the cost at $400,000 to $500,000, including  Census headquarters and field costs but excluding the cost of a final report.  In 2008, the two-pronged approach cost approximately $1.3 million, including  headquarters and field costs and the cost of final reporting.
section_title: U.S. Census Data Show Compact Migrants throughout U.S. Areas, with Growing Populations in Guam and Hawaii
subsections: section_title: Compact Migrants Reside throughout States and Territories
paragraphs: The combined data from Census’ 2005-2009 ACS and the 2008 required  enumerations in Guam and the CNMI estimated approximately 56,000  compact migrants—nearly a quarter of all FAS citizens—living in U.S.  areas, with the largest populations in Guam and Hawaii. An estimated  57.6 percent of all compact migrants lived in affected jurisdictions: 32.5  percent in Guam, 21.4 percent in Hawaii, and 3.7 percent in the CNMI.  According to ACS data, nine mainland states had estimated compact  migrant populations of more than 1,000. (See fig. 2.) In comments on a  draft of this report, the government of Arkansas stated that it had serious  doubts about the accuracy of the ACS estimate for Arkansas shown in  figure 2, particularly in comparison to the higher count implied by 2010  decennial Census data and school enrollment data from Springdale,  Arkansas. See appendix IV for a discussion of the differences between  these data sources, and see appendix II for the varying estimates in  Arkansas.
On the basis of these combined data, we estimate that approximately 68  percent of compact migrants were from the FSM, 23 percent were from  the Marshall Islands, and 9 percent were from Palau. According to these  estimates, although the FSM produced the highest number of migrants,  Marshallese predominated in Arizona, Arkansas, California, and  Washington.
See appendix III for Census’s 2005-2009 ACS estimates of compact  migrants by U.S. area and FAS of origin.
Census has also published the 2010 decennial census counts of Pacific  Islanders, with respondents identifying themselves by race, for the 50  U.S. states. Decennial census data include published state-level  information on the Marshallese population and will provide counts of  ethnicities from the FSM and Palauans in the future. According to these  data, there are more than 1,000 Marshallese identified by race in five  states, with the largest number in Hawaii and Arkansas. See appendix IV  for information on the Marshallese population gathered through the 2010  decennial census in the 50 states.
section_title: Enumerations Show Growing Populations of Compact Migrants in Guam and Hawaii
paragraphs: Surveys that Interior conducted in affected jurisdictions from 1993 through  2008 show growth in the compact migrant populations in Guam and  Hawaii. In the CNMI, the compact migrant population declined between  2003 and 2008, mirroring a general decline in the CNMI population.   (See fig. 3.)
From 2003 through 2008, the percentage of the total compact migrant  population grew in Guam and Hawaii. In 2008, compact migrants  represented approximately 12 percent of the total population in Guam and  one percent of the total population of Hawaii. (See fig. 4.)
Census’s 2003 survey of compact migrants in the affected jurisdictions  found that most migrated to the affected jurisdictions for employment or to  accompany migrating relatives. Employment was the most common  reason for migration in Guam and CNMI, followed by accompanying  relatives. In Hawaii, slightly more migrants identified accompanying  relatives than employment as their reason for migration. In Guam and the  CNMI, less than 1 percent of migrants cited medical reasons for  migration; in Hawaii, 10 percent cited medical reasons.
Census’s 2008 survey did not ask about reasons for migration. However,  during our interviews in 2011, compact migrants and officials from FAS  embassies and consulates identified employment opportunities,  educational opportunities, accompanying relatives, and access to health  care as reasons for migration, similar to the findings from Census’s  previous surveys.
section_title: Enumeration Approach in 2008 and Preliminary Approach for 2013 Have Strengths and Limitations
subsections: section_title: Approach Used in 2008 Had Strengths and Limitations
paragraphs: The two-pronged 2008 enumeration, on which the current allocation of  compact impact grants is based, had certain strengths and limitations.  Strengths of the 2008 enumeration included its reliance on available data  in Hawaii, lowering the enumeration’s cost, and its use of a probability  method in all jurisdictions that allows Census to statistically calculate the  quality of the data and report margins of error for the enumerations in all  three jurisdictions. Limitations of Census’s approach for the 2008  enumeration included its use of two different methods and its use of data  from two different time periods, both of which affect the perceived fairness  and usefulness of the enumerations. In addition, data resulting from the  2008 approach has limited comparability with data from the prior surveys  and includes limited demographic information, limiting the usefulness of  the 2008 data for purposes other than the required enumeration.    Use of two different methods. The data produced by block sampling  in Guam and the CNMI and the ACS tabulations in Hawaii that were  used for the 2008 enumeration are not fully comparable among the  affected jurisdictions.    Use of data from different time periods. Because the 2008  enumeration used data from two different time periods—2008 for  Guam and the CNMI and 2005 to 2007 for Hawaii—the enumerations  for the respective jurisdictions do not reflect the continuing migration  to Hawaii after 2007 but do reflect such migration to Guam and the  CNMI. The effect of the earlier time frame is to undercount the  compact migrants in Hawaii relative to the counts in Guam and the  CNMI.    Limited comparability with prior enumeration. The shift in  approaches from prior enumerations to 2008 limits Interior’s and  affected jurisdictions’ ability to draw inferences from trends in the  data. Some differences in the counts for those years may be  attributable to the change in methodology rather than changes in the  populations. However, using the same methodology at different points  in time does not guarantee comparability of data across time.    Limited collection of demographic data. In 2008, Census did not  collect information on characteristics of compact migrants in Guam  and the CNMI beyond that required for the enumerations. Collected  ACS demographic data on characteristics such as employment,  income, and age distribution may not be statistically reliable for  populations as small as that of compact migrants in Hawaii. The  numbers of compact migrants found by the ACS in each year’s Hawaii  survey are very small. For example, the 2006 ACS identified, by place  of birth and arrival after the compact’s effective date, 55 persons from  the FSM, 30 persons from the Marshall Islands, and 3 from Palau.  The ACS for 2005-2007 identified a cumulative total of 295 compact  migrants, from which Census estimated the total reported population.
section_title: Affected Jurisdictions Opposed Change in Enumeration Methods for 2008
paragraphs: Affected jurisdictions expressed concerns about the potential accuracy  and fairness of the 2008 enumeration approach. Guam, Hawaii, and  CNMI officials expressed a preference for the snowball method that was  used for the prior enumeration, stating that it was a more suitable  approach to enumerating compact migrants. Further, though the snowball  method used in the past had undercounted migrants, these officials were  concerned that the 2008 approach would also miscount. Both Guam  and CNMI officials stated that the compact migrant population changed  addresses frequently, potentially affecting the sampling methodology and  leading to a miscount. Hawaii expressed concern that the use of ACS  data for the state from earlier years would not reflect recent migration  and, in contrast to the special survey to be conducted in Guam and the  CNMI, would eliminate Hawaii’s local input into the survey while  permitting such input from Guam and the CNMI. However, Guam and the  CNMI also stated that implementation of the survey was rushed and they  had only limited opportunity to provide such input. In addition, Guam,  Hawaii, and CNMI officials expressed concern that the approach chosen  for 2008 would provide fewer demographic data. Led by the University of  Hawaii, the Hawaii Governor’s office prepared an unsolicited proposal to  Interior to conduct a snowball survey in all three affected jurisdictions.
Responding to the affected jurisdictions’ concerns, Census officials stated  that the snowball method was statistically insufficient and was unlikely to  meet statistical survey criteria established by OMB in 2006. These  criteria require agencies initiating a new statistical survey to document the  precision required of the estimates (e.g., the size of differences that need  to be detected).
Interior offered to adopt Hawaii’s proposal if all affected jurisdictions  agreed to it; however, Guam and the CNMI did not agree to the proposal.  In addition, Interior cited Census’s independence as an advantage of its  conducting the enumerations. Officials in all three affected jurisdictions,  however, remained dissatisfied with the 2008 enumeration approach.  (See app. V for attributes of the 2008 approach compared with the  approach used for the prior enumeration.)
section_title: Preliminary Approach for 2013 Also Has Strengths and Limitations
paragraphs: Although Interior has not yet selected an approach for its 2013  enumeration of compact migrants in the affected jurisdictions, Interior and  Census officials are discussing a preliminary approach that would have  strengths and limitations similar to those we found in the 2008  approach. As of July 2011, according to Census officials, no agreement  was in place for Census to conduct this work. However, according to both  Interior and Census officials, if Interior employs Census for the 2013  enumeration, Census would again deploy a two-pronged approach, using  the 2010 decennial census results for Guam and the CNMI and the ACS  for Hawaii. Interior has not determined the cost of the preliminary  approach or weighed its strengths and limitations.
Our analysis shows that the strength of the preliminary 2013 approach  would be its low cost; because it would draw solely from existing Census  data, it would require no new data collection. However, it would have  limitations similar to those we found in the 2008 approach, compromising  both its fairness as a basis for distributing compact impact funds as well  as the usefulness of the data it produces.    Use of two different methods. Using the counts provided through  the full enumeration contained in the 2010 census in Guam and the  CNMI produces single numbers for these jurisdictions. In Hawaii,  use of the ACS would provide an estimated total based on a sample  with calculated level of precision.    Use of data from different time periods. The preliminary approach  would use data from April 1, 2010 for Guam and the CNMI and from  multiple ACS monthly samples at different points in time for Hawaii.    Limited comparability with prior data. The change in enumeration  method for Guam and CNMI would limit the comparability of the 2008  and 2013 enumerations.    Limited collection of demographic data. Detailed demographic  data could be produced for compact migrants in Guam and CNMI,  because the 2010 decennial census in those locations collected such  data. However, as in 2008, demographic data from the ACS in Hawaii  could lack statistical reliability because of the small number of  migrants included in the ACS sample.
In addition, the 2010 census and the ACS may provide different coverage  of the compact migrant populations. The 2010 census collection followed  a widespread campaign by Census and community groups to encourage  participation, while the ACS collection efforts are not accompanied by this  level of outreach.
section_title: Estimates of Rising Compact Impact Costs Have Weaknesses, and Guidance on Impact Reporting Is Lacking
subsections: section_title: Guam and Hawaii Report Rising Costs, Primarily for Education and Health
paragraphs: For 2004 through 2010, the affected jurisdictions’ reports to Interior show  more than $1 billion in costs for services related to compact migrants.  During that period, Guam’s reported costs increased by nearly 111  percent, and Hawaii’s costs increased by approximately 108 percent. The  CNMI’s reported costs decreased by approximately 53 percent, reflecting  the decline in the CNMI compact migrant population.
Figure 5 shows compact impact costs reported by the affected  jurisdictions for 1996 through 2010. For more details, see appendix VI.
The affected jurisdictions reported impact costs for educational, health,  public safety, and social services. Education accounted for the largest  share of reported expenses in all three jurisdictions, and health care costs  accounted for the second-largest share overall. (See table 1.)
Our analysis of data in affected jurisdictions’ impact reports for 2004  through 2010 found that, reflecting the growing numbers of compact  migrants, annual costs for educational services across all jurisdictions  increased from approximately $46 million to $89 million, or by 93 percent.  Annual costs for health services across all jurisdictions increased from  approximately $33 million to $54 million, or by 66 percent.
The affected jurisdictions’ impact reports, numerous studies, federal and  state officials, and officials from affected jurisdictions have identified  several other factors, in addition to growing migrant populations, that  contribute to the cost of providing public services to compact migrants.    Educational services. Compact migrant school children generally lag  academically owing to (1) poor-quality schools in the FAS; (2) limited  language skills and experience with a school environment; and (3)  difficulties in involving parents in their children’s education, due to  language barriers. Various officials from affected jurisdictions,  Interior, and service providers said these factors increase the  resources required to provide educational services to compact  migrants relative to other students.    Health services. FAS citizens have high rates of obesity; diabetes;  hypertension; cardiovascular disease; and communicable diseases  such as tuberculosis, Hansen’s disease, and sexually transmitted  diseases. The Department of the Interior’s Inspector General has  reported on inadequate health care systems in the FAS, which can  lead to the prevalence of these health issues among FAS citizens.  These health factors also lead some FAS citizens to migrate in order  to gain access to the U.S. health care system. In U.S. areas, compact  migrants’ low household incomes may lead many migrants to rely on  public health services.    Social services. Like many other migrant populations, compact  migrants often face challenges related to homelessness, reliance on  public housing, and crowded living conditions.
section_title: Compact Migrants Are Ineligible for Several Federal Programs
paragraphs: Various officials in Guam and Hawaii also cited compact migrants’ limited  eligibility for a number of federal programs, particularly Medicaid, as a key  contributor to the cost of compact migration borne by the affected  jurisdictions. Table 2 shows compact migrants’ eligibility status for  selected federal benefit programs.
In some cases, affected jurisdictions have provided services for compact  migrants at local expense that are similar to those available to U.S.  citizens. For example, Guam, Hawaii and the CNMI provide funding for  medical services that, prior to 1996, were available through Medicaid to  low-income non-U.S. citizen compact migrants. U.S.-born children of  compact migrants are eligible as citizens for the benefits available to them  as U.S. citizens.
section_title: Compact Impact Estimates Have a Number of Weaknesses
paragraphs: We identified 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.  Examples of such weaknesses include the following (see appendix VI for  more details).    Definition of compact migrants. For several impact reports that we  examined, the reporting local government agencies (state and  territorial agencies in the affected jurisdictions) did not define compact  migrants according to the criteria in the amended compacts enabling  legislation when calculating service costs. For instance, some  agencies defined and counted compact migrants using the proxy  measures of ethnicity, language, or citizenship rather than the  definition in the amended compacts’ enabling legislation. Using  ethnicity or language as a proxy measure could lead to overstating  costs, since neither measure would exclude individuals who came to  the jurisdiction prior to the compact, while using citizenship as a proxy  measure could lead to understating costs, since it would exclude U.S.- born children of compact migrants.    Federal funding. States and territories receive federal funding for  specific programs that offsets a portion of the costs of providing  services to compact migrants. However, two of the three affected  jurisdictions’ public school systems and health agencies did not  account for these offsets in their impact reporting, thus overstating  reported compact impact costs.    Revenue. Multiple local government agencies that receive revenues,  such as user fees, associated with services provided to compact  migrants did not consider them in their compact impact reports, thus  overstating reported costs.    Capital costs. Many local government agencies did not include  capital costs in their impact reporting. Capital costs entail, for  example, providing additional classrooms to accommodate an  increase in students or additional health care facilities. In cases where  compact migration has resulted in the expansion of facilities, agencies  understated compact migrant impact by omitting these costs.    Per person costs. A number of local government agencies used an  average per-person service cost for the jurisdiction rather than  specific costs associated with providing services to compact migrants.  Hawaii reported in 2008 that several costly diseases are  overrepresented within the compact migrant population. Using the  average cost may either overstate or understate the true cost of  service provision. In some cases—for example, the provision of  health services—the service cost for each compact migrant could be  determined. However, a number of agencies apply a range of  approaches, such as using the simple average cost (e.g., cost per  student) or factoring in higher costs if additional or more costly  services are used.    Discretionary costs. Some compact impact costs local government  agencies reported were for benefits or services provided at the  discretion of the affected jurisdiction.    Data reliability. One local government agency used data on compact  migrants that were found to be in error in a subsequent compilation of  their impact reporting and caused an overstatement of total costs in its  impact reporting.
A number of local government agencies did not disclose their  methodology, including any assumptions, definitions, and other key  elements, for developing impact costs making it difficult to evaluate  reported costs.
For those years when the affected jurisdictions submitted impact reports  to Interior, not all local government agencies in the jurisdictions included  all compact impact costs for those years. Between the affected  jurisdictions the scope of reporting differed, with one jurisdiction not  reporting cost related to police services.
section_title: Existing Compact Impact Reporting Guidelines Have Gaps and Generally Are Not Used
paragraphs: Guidelines that Interior developed in 1994 for compact impact reporting  for Guam and the CNMI do not adequately address certain concepts key  to reliable estimates of impact costs. Developed in response to a 1993  recommendation by the Interior Inspector General, the guidelines  suggest that impact costs in Guam and the CNMI should, among other  concepts, (1) exclude FAS citizens who were present prior to the  compacts, (2) specify omitted federal program costs, and (3) be  developed using appropriate methodologies. However, the 1994  guidelines do not address certain concepts, such as calculating revenue  received from providing services to compact migrants; including capital  costs; and ensuring that data are reliable and reporting is consistent.
Several Hawaii and CNMI officials from the reporting local government  agencies we met with, as well as Interior officials, were not aware of the  1994 guidelines and had not used them. Officials at the Guam Bureau of  Statistics and Plans, which was in possession of the guidelines, said that  the bureau attempts to adhere to them when preparing compact impact  cost estimates. The bureau does not provide these guidelines in its  annual letter to the agencies when requesting compact impact costs since  the agencies do not submit their reports for Interior directly. The bureau  said it applies the guidelines to the data it receives from the agencies  prior to submitting the final report to Interior. However, we found some  cases where the bureau and local Guam agencies did not follow the  guidelines.
section_title: Interior’s Reporting of Compact Impacts to Congress Has Been Limited
paragraphs: Interior’s reporting to Congress on compact impacts reported by the  affected jurisdictions has been limited. The amended compacts’ enabling  legislation requires Interior, if it receives compact impact comments from  the Governor of an affected jurisdiction by February 1, to submit a report  with specific required elements on compact impact to Congress no later  than May 1 of that year. As of August 2011, Interior had submitted one  required report to Congress in 2010 but had not submitted any reports in  2004 through 2009, although at least one affected jurisdiction had  reported compact impacts to Interior in each of those years. Although  Interior officials stated they were preparing their 2011 congressional  report, as of August 2011 it had not been submitted.
Interior’s 2010 report did not address all elements required by the  amended compacts’ enabling legislation:  Interior’s report lacked information from the Guam and Hawaii  governors’ compact impact reports regarding increasing compact  migrant costs, the types of services being used, and the associated  costs for each local government agency. Interior’s report did not  analyze the impact cost information provided by the two governments.  However, Interior noted that the affected jurisdictions’ compact impact  reports do not calculate compact migrants’ contributions.
Interior’s report did not state its views on recommendations for  corrective action, such as Hawaii’s suggestion to authorize compact  migrant eligibility for all federal assistance programs to reduce impact.  However, Interior relayed requests from the governors of Guam and  Hawaii for additional funds and provided a summary of Interior’s  compact impact funding provided to Guam and Hawaii.
In August 2011, Interior reminded affected jurisdictions of their option to  submit annual compact impact reports and identified a point of contact at  Interior to which the reports may be submitted. Interior also noted that it is  currently developing a process to ensure timely submissions to Congress.
section_title: Data Quantifying Compact Migrant Participation in Local Economies Are Limited
paragraphs: Compact migrants participate in local economies through their  participation in the labor force, payment of taxes, consumption of local  goods and services, and receipt of remittances. Previous compact  migrant surveys estimated compact migrants’ participation in the labor  force, but existing data on other compact migrant contributions such as  tax revenues, local consumption, or remittances are not available or  sufficiently reliable to quantify their effects.
According to data from the 2003 Surveys of Micronesian Migrants, the  majority of compact migrants participated in CNMI’s and Guam’s labor  force and over 40 percent participated in Hawaii’s labor force. However,  compact migrants generally participate in the labor force at lower rates  than the general population. The 2003 data also showed that compact  migrants from the Marshall Islands generally had lower labor force  participation rates than compact migrants from the FSM and Palau.
Compact migrant workers generally work in low-skilled occupations.  According to data from the 2003 survey, the majority of compact migrant  workers work in the private sector as (1) operators, fabricators, and laborers;  (2) service workers; and (3) technical, sales, and administrative support.  Guam and Hawaii do not have more recent data on compact migrant  workforce participation, but CNMI Department of Finance data show that, on  average, compact migrants comprised 2.3 percent of the CNMI workforce  from 2004 through 2009 and had income 14 percent higher than other  workers. Persons born in the FAS may also serve in the U.S. armed  services and, as of August 2011, 381 were serving on active duty.
Compact migrants participate in local economies through taxation, but  reliable data quantifying their effect are not available. Guam and Hawaii  do not collect data on the ethnicity of taxpayers or other information that  could be used to disaggregate the taxes paid by compact migrants from  overall receipts. However, for Guam, our estimates show that compact  migrant workers paid $971 less (68 percent less) per capita in taxes than  other workers in 2009. Approximately 60 percent of this difference  results from compact migrant workers’ being much less likely to be  employed in Guam’s higher paying public sector. The remaining  difference results from the higher number of exemptions that compact  migrant workers could claim, on average, for family members when filing  taxes. Alone among affected jurisdictions, the CNMI collects data on  citizenship that could be used to identify the taxes paid by compact  migrants. However, the data provided by the CNMI include only the  amount of taxes withheld and not the amount ultimately paid. These data  may overestimate the amount of taxes paid, since a portion of taxes  withheld may be returned to the taxpayer.
Compact migrants contribute to the local economy by consuming local  goods and services and by spending remittances that they receive from  their home islands in affected jurisdictions. Their total consumption and  economic effect may be reduced if they remit some of their income to  their home islands. Data from 1998 suggest that compact migrants  generally consume less of their income than does the general population;  however, since that time, no data quantifying consumption by compact  migrants has been published. Compact migrants we met with confirmed  that they send remittances to their home islands; however, estimates and  methodologies for remittances have many limitations and vary  significantly across sources, calling their reliability into question.
section_title: Interior Grants Only Partially Address Compact Impact
subsections: section_title: Compact Impact Grants Have Addressed Some Reported Costs
paragraphs: From fiscal years 2004 through 2010, the $30 million in annual compact  impact grants, which Interior has awarded in accordance with the  enumerations of compact migrants, have addressed a portion of each  jurisdiction’s reported impact costs. Of the $210 million in impact grants,  approximately $102 million was provided to Guam, $75 million to Hawaii,  and $33 million to the CNMI (see fig. 6). In their compact impact reports  to Interior, the governors of Guam and Hawaii have highlighted the gaps  between their reported impact costs and the amounts of the compact  impact grants, requesting that the federal government provide additional  support.
Interior has approved affected jurisdictions’ applications for compact  impact grants to be used for general support of local budgets, projects,  and for specific departmental purchases in the areas of health, education,  public safety, and social services.    Guam. The largest annual compact impact grants to Guam in fiscal  years 2005 through 2010 supported public school construction and  maintenance. Most other compact impact grants to Guam funded  health and public safety purchases, such as the purchase or  renovation of facilities, emergency vehicles, and medical supplies,  among many others.    Hawaii. All compact impact grants to Hawaii in fiscal years 2004  through 2010 were provided to its Department of Human Services to  offset the cost of state-funded medical services.    CNMI. Compact impact grants to the CNMI in fiscal years 2004  through 2010 supported the operations of several CNMI government  departments, such as the departments of public health and public  safety, and the public school system.
See appendix VII for a description of Interior’s grant reviews and a list of  compact impact grants to the affected jurisdictions from fiscal years 2004  to 2011.
section_title: Government Officials, Service Providers, and Compact Migrants Suggested Approaches to Directly Address Challenges Related to Compact Migration
paragraphs: Compact migrants confront complex challenges related to the compact  migrants’ unfamiliarity with local language and culture, limited job skills,  and difficulty in accessing available services, according to various  government officials, services providers, and compact migrants. Compact  impact grants are generally not used to directly target these complex  challenges. However, a report by the Hawaii Compacts of Free  Association Taskforce released in 2008 recommended a review of the  allocation and use of compact grants that the state received from Interior  to determine whether there is a way to spend compact impact grants that  would have a more effective long-term impact. Officials, providers, and  migrants identified the following needs:  Language and cultural assistance. Guam education, health, and social  service officials reported, among other challenging cultural gaps facing  arriving migrants, the need for interpreters to assist patients and families.  Hawaii health providers noted that language and cultural barriers  compromise care delivery. In addition, the Hawaii Taskforce report  identified a need to develop translation and interpreter resources. A  number of compact migrants in Guam and Hawaii identified language and  cultural issues as a source of difficulty in using government services and  identified a need for translators and language tutors.
Job training. The Governor of Guam noted that FSM migrants in Guam  face challenges due to their lack of job skills and education. Various  members of the compact migrant community in Hawaii also cited lack of  job skills as a challenge and said that job training is needed to help  migrants gain employment.
Access to basic services. Hawaii officials identified lack of coordination  of services as a challenge. Various FAS officials noted that their citizens  are at times frustrated in their attempts to obtain basic documents such  as social security numbers and driver’s licenses from officials who are  unaware of the compact provisions for compact migrants. In addition,  several compact migrants in Hawaii noted that compact migrants are  often unaware of available benefits.
To more directly address these needs, various government officials,  service providers, and compact migrants suggested the establishment of  centers offering multiple services to migrants.
In Guam, the Center for Micronesian Empowerment provides culture,  language, and job skills training, as well as help in finding  employment, to both arriving and resident compact migrants.  According to one of the center’s founders, the language and cultural  training has reduced employee attrition in companies that hire the  trainees, and migrants who receive job skills training are almost  guaranteed to find employment. Guam officials also noted that Interior  grants had previously funded another resource center for FAS citizens  that supported migrant efforts to assimilate and provided outreach and  services to newly arriving migrants.    The Hawaii Taskforce report recommended the establishment of  multipurpose cultural outreach service centers or mobile service  delivery centers, among other options, to standardize service delivery  processes and promote accessibility.    A senior official at the Hawaii State Department of Health advocated a  “one-stop” service center approach for migrants with medical and  other government services, with staff who can assist with language  and cultural issues. Kokua Kalihi Valley, a community nonprofit in  Hawaii, includes elements of such an approach, providing health,  social, and youth services, among others, to compact migrants.    Several compact migrants in Hawaii suggested the establishment of a  community center to help people adjust and acclimate—for example,  by teaching them how to work with schools and access services.
section_title: Sector Grants to the FSM and the Marshall Islands Indirectly Address Compact Impact
paragraphs: Sector grants awarded in fiscal years 2004 through 2010 may have  helped mitigate compact impact by supporting the health and education  sectors and, in some instances, directly targeted issues related to  compact impact in the affected jurisdictions. In 2001, we reported that  targeting assistance to the health and education sectors in the FSM and  the Marshall Islands might lessen compact migration and its impact in the  affected jurisdictions. For example, better education systems in the  FSM and the Marshall Islands might reduce the motivation to migrate and  enable those who do migrate to better succeed in U.S. schools. Also,  targeting health spending where health services are limited might reduce  the number of citizens who travel to the United States seeking medical  care. Further, programs aimed at improving the health status of FAS  citizens might reduce the impact of migrating citizens on the U.S. health  care system.
Under the amended compacts, the U.S.-Micronesia and U.S.-Marshall  Islands joint management committees, chaired by Interior, annually  review and approve sector grants that allocate funds primarily for  education, health, and infrastructure. The amended compacts and related  agreements outline the joint management committees’ responsibilities as  including allocating sector grants and recommending ways to increase  the effectiveness of sector grant assistance. Based on the joint  management committees’ annual approval of sector grants, Interior has  made available approximately $808 million in sector grant funds in fiscal  years 2004 through 2010. (See table 3 for sector grant allocations  approved for fiscal year 2011.)
In allocating sector grants for fiscal years 2004 through 2010, the joint  management committees did not formally address the needs of compact  migrants or their impact on U.S. states and territories, according to  Interior officials. In 2011, the committees formally placed compact impact  on their annual meeting agendas; however, as of September 2011 they  had not allocated 2012 sector grant funding to directly address issues that  concern the compact migrants or the affected jurisdictions.
The amended compacts indicate that the sector grants are to be used for  sectors such as education, health care, the environment, public sector  capacity building, and private sector development in the FSM and  Marshall Islands but may be used for other sectors as mutually agreed,  with priorities in the education and health care sectors. We found some  examples of grants that directly address compact migrants’ needs in  affected jurisdictions and thus respond to some of the affected  jurisdictions’ concerns.    For fiscal years 2010 and 2011, three of the four states of the FSM  agreed to use a total of approximately $842,000 of supplemental  education grants to fund the Center for Micronesian Empowerment,  which assists Micronesians in Guam with language and culture  training, developing job skills, and finding employment.    For fiscal years 2009 and 2010, Interior awarded approximately $3.4  million in health sector grants to the FSM and the Marshall Islands to  address an outbreak of multidrug-resistant tuberculosis—a public  health concern and a costly communicable disease that has occurred  among migrants in the affected jurisdictions.
During our visits to the affected jurisdictions in February 2011, the  Governor of Guam identified a need to use sector grants in the FSM to  improve education and health services to reduce compact impact in  Guam, noting that he and the President of the FSM had discussed ways  to work together to improve assimilation of migrants from the FSM in  Guam. FSM migrants in Guam identified a need for cultural education and  job training at home before citizens migrate to the United States. In  Hawaii, officials identified the need to address health and social issues in  the FSM and the Marshall Islands to better prepare FAS citizens  considering migration and reduce the need for migrants to seek health  and social services in Hawaii. In addition, compact migrants in Hawaii  suggested that U.S. grant funds currently going to the FSM and the  Marshall Islands be used to establish a compact migrants’ cultural center  in Hawaii.
In May 2011, Members of Congress wrote to Interior and the Department  of State asking that a portion of sector grants be used to fund a program  to prepare FAS citizens for migration and to establish and operate dialysis  treatment facilities in the FSM and the Marshall Islands so that patients  will not seek treatment in the United States. In their annual meetings held  in August and September of 2011, both joint management committees  formally placed compact impact and fiscal year 2012 sector grants on  their agendas, but neither committee allocated sector grants that directly  address compact migration.
section_title: Conclusions
paragraphs: Although the compact migrant population represents a tiny fraction of  migrants in the United States, the population can have significant impacts  on the U.S. communities where they reside. To help defray costs of  providing services to compact migrants, Congress has appropriated  compact impact funds that Interior allocates to the affected jurisdictions in  proportion to the required periodic enumerations of compact migrants.  However, developing a cost-effective enumeration approach that is fair, is  accepted as credible by affected jurisdictions, and produces additional  demographic data remains a challenge. Thorough consideration of the  strengths, limitations, and costs of the preliminary approach for the 2013  enumeration, as well as the concerns of affected jurisdictions, would  enhance Interior’s ability to select a credible and reliable approach.
Although the affected jurisdictions have reported rising costs of  addressing compact migrants’ needs for health, education, and social  services, the jurisdictions’ estimates of these costs have weaknesses that  affect their reliability. Moreover, Interior’s 1994 guidelines for reporting  compact impact do not address certain concepts, such as defining  compact migrants and calculating revenues, that are essential for reliable  estimates of impact costs. Providing more rigorous guidelines to the  affected jurisdictions that address concepts essential to producing reliable  impact estimates and promoting their use for compact impact reports  would increase the likelihood that Interior can provide reliable information  on compact impacts to Congress.
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. Meanwhile, government officials,  service providers, and compact migrants noted the complex challenges  confronting both service providers and migrants and suggested  approaches to directly address these challenges. For example, centers  offering multiple services could address migrants’ needs for basic  services as well as facilitate provision of services and improve migrants’  access. One affected jurisdiction also noted the need to review the  allocation and uses of the grants to determine whether they could be  spent in a way that would increase their long-term effectiveness. Given  that compact impact grants only partially offset the affected jurisdictions’  reported rising impact costs, Interior working with the affected jurisdictions  to identify alternative uses of the grants could more effectively address  compact impact.
Available data suggest that about 56,000 citizens of the FSM, the  Marshall Islands, and Palau—nearly a quarter of all FAS citizens—reside  in the United States and its territories under provisions of the U.S.  compacts with those countries. In Guam and Hawaii, officials have  advocated the use of sector grants to reduce the impact of compact  migration by improving education, health, and social services in the FSM  and the Marshall Islands, and compact migrants cited the need for  assistance in adapting to life after migration. The joint U.S. - FSM and  U.S. - Marshall Islands committees’ allocations of sector grants since  2003 have supported the health and education sectors in the FSM and  the Marshall Islands and may indirectly help to mitigate compact impact in  the affected jurisdictions. The committees have included compact impact  on their recent agendas; however, they have not yet considered potential  uses of the grants to directly address the issues that concern compact  migrants or the affected jurisdictions.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of the Interior take the following four  actions:  In order to select the most appropriate approach for its next  enumeration of compact migrants, 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.
In order to strengthen its ability to collect, evaluate, and transmit  reliable information to Congress, 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.
In order to promote the most effective use of compact impact grants,  work with the affected jurisdictions to evaluate the current use of grant  funds and consider alternative uses of these grants to reduce  compact impact.
In order to help mitigate compact impact and better assist FSM and  Marshall Islands citizens who migrate to the United States, 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.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Department of the Interior; the  Department of State; the Census Bureau; and the governments of Guam,  Hawaii, the CNMI, Arkansas, the FSM, Marshall Islands, and Palau for  review. All except the Department of State provided written comments,  which we have summarized below with our responses. See appendixes  VIII through XVI for reproductions of the comments, along with our  detailed responses.
subsections: section_title: Comments from U.S. Agencies
subsections: section_title: Department of the Interior
paragraphs: Interior generally agreed with our findings and the recommendations that  it fully consider the strengths and limitations of enumeration approaches  and that it disseminate guidelines on impact estimates.
However, Interior disagreed with our recommendation that it work with the  affected jurisdictions to evaluate the use of compact impact grant funds and  consider alternative uses. Interior stated 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. Further,  Interior stated that it did not believe that practical gains can be made by  proposing alternatives. We believe Interior should not rule out the  possibility of practical gains through a consideration of alternate uses of the  grant funds. During our review, government officials and service providers  suggested alternative uses of compact impact funding that may more  directly address compact impact, such as measures to reduce certain  health costs through the provision of preventive care. The governors of  Guam and the CNMI agreed with this recommendation, and the governor  of Hawaii noted that ideas to increase long-term capacity or efficiency of  resources could be of great benefit to the affected jurisdictions. We retain  our recommendation for Interior to work with governors to evaluate their  current use of funds and to consider alternative uses.
Interior agreed with our recommendation that it 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 compact migrants  and the affected jurisdictions, subject to the funds being used within the  FAS. However, Interior stated that our draft report implied that compact  sector grant funds should be shifted from providing assistance to the FAS  governments to providing assistance to FAS citizens living in the affected  jurisdictions, an action that Interior sees as inconsistent with the  compacts and their enabling legislation. We agree with Interior that  compact sector grants are to support the governments of the FSM and  the Marshall Islands by providing grant assistance to be used in certain  sectors such as education and health care, or for other sectors as  mutually agreed. We expect that compact sector grant awards will be  provided consistent with the terms of the compacts and the amended  compacts’ enabling legislation; we do not intend to imply that funds  should be shifted from FAS governments to FAS migrants. In response to  Interior’s concern, we clarified that our findings and recommendation  highlight the opportunity for the joint management committees to consider  the use of sector grants to the FSM and Marshall Islands in ways that  address the concerns of FAS citizens—whether they are in the FAS or in  U.S. areas—and the concerns of the affected jurisdictions. The  recommendation supports consideration of the use of sector grants in  ways that respond to the concerns of FSM and Marshall Islands migrants  and the affected jurisdictions.
Census did not comment on our report’s recommendations but offered a  number of largely technical comments on our findings, which we have  addressed as appropriate. Census disagreed with our assessment of the  limitations of the 2008 enumeration methodologies. However, our findings  indicate that the 2008 Guam and CNMI surveys are not comparable with  the ACS estimates for Hawaii in terms of their sampling methods and  reporting period. In addition, as our report notes, migration is continuing,  and Hawaii ACS data does not include nearly a year of additional  migration that may be captured in the Guam and CNMI totals. Regarding  its varying estimates of compact migrants in Arkansas, Census stated  that the different estimates are not based on the same criteria and  therefore should not be compared. We agree that the surveys have  different bases for identification, and we identify several reasons for these  differences in appendix IV of the report. We have also noted Arkansas’s  and Hawaii’s observations about the accuracy and reliability of the ACS  data.
section_title: Comments from U.S. Areas
subsections: section_title: Hawaii
paragraphs: The government of Hawaii generally agreed with our recommendations  and made several related observations. In particular, in response to our  recommendation that Interior disseminate guidelines to the affected  jurisdictions for estimating compact impact, the government of Hawaii  said it would be willing to consider using such guidelines if they do not  create undue burdens. Regarding our recommendation that Interior work  with the affected jurisdictions to evaluate current uses of compact impact  grants and consider alternative uses, the government of Hawaii noted that  it had always used compact impact assistance for direct services to  compact migrants, and said it had done so efficiently and effectively.  However, Hawaii noted that ideas to increase long-term capacity or  efficiency, or proposals to strengthen support infrastructure, could be of  future benefit. The government of Hawaii stated that a portion of the  sector grants to the FAS might be more effectively used to provide  services to their compact migrants and suggested that affected  jurisdictions provide input on the use of sector grants.
The government of Guam agreed in principle to the four  recommendations in our report. Regarding the required enumerations of  compact migrants, the government of Guam stated that Interior’s decision  not to use the enumerations to collect additional demographic data has  resulted in the loss of valuable information. The government of Guam  also welcomed legislative proposals for federal impact aid for education  and restoration of Medicaid eligibility. Regarding our recommendation to  consider uses of sector grants to address compact impact, the  government of Guam cautioned that while such use may lessen impact  on affected jurisdictions, diverting them from use within the FAS must be  carefully weighed. The government of Guam also stated that the report  does not discuss some options available in the amended compacts'  enabling legislation to address compact impact, including: direct financial  compensation to affected jurisdictions, nondiscriminatory limits on  migration, and debt relief to offset previous costs. Our report notes the  authorization of additional appropriations but does not address limits on  migration. We added a note to the report to describe the debt relief  provision but also note that it expired on February 28, 2005.
The government of the CNMI generally agreed with our findings and  recommendations and stated that Interior should consult with the CNMI  on developing cost guidance based on Interior Inspector General, Office  of Management and Budget, and GAO guidance. The government of the  CNMI also recommended that Congress provide additional appropriations  to redress the outstanding costs for services provided to compact  migrants from past years to the present.
The government of Arkansas generally agreed with our findings but  expressed serious reservations about the ACS data shown in figure 2 of  our report. The government of Arkansas asked that figure 2 show  Census’s 2010 decennial census count based on race rather than the  estimate of compact migrants based on ACS 2005-2009 data. We agree  that there are differences between the counts and list some of the  reasons for the differences in appendix IV. We have added additional text  to the report body to present Arkansas’s concerns and more thoroughly  describe the differences between the data sources.
section_title: Comments from Freely Associated States
subsections: section_title: Federated States of Micronesia
paragraphs: The government of the FSM commented that weaknesses we identified in  affected jurisdictions’ impact cost reporting, combined with the lack of  information on the positive contributions of compact migrants, leaves the  net impact unknown. The FSM asked that the service of its citizens in the  U.S. armed forces be recognized in our report. In response, we obtained  information on the number of FAS-born persons on active duty in the  armed forces and have included it in the report. Further, the FSM  expressed concern that disagreements regarding the compact migrant  enumerations will continue and requested that parties involved in the  2013 enumeration reach an agreement on the best approach.
The government of the Marshall Islands stated that a methodology should  be developed to calculate net compact impact and requested that the  contributions of Marshall Islands citizens in the U.S. armed forces be  recognized in our report. The government of the Marshall Islands  commented that it views the immigration privileges under the compact as  a cornerstone of its free association with the United States and that any  changes to them will lead to a deterioration in the relationship between  the United States and the Marshall Islands. The government of the  Marshall Islands also cited specific steps it has taken to address compact  migrant impact, including establishing a task force working on and  implementing a program to address communicable diseases, and  producing a video for Marshallese that describes intending migrants’  rights, duties, and responsibilities while living in the United States.  Regarding the recommendation that Interior work with the U.S.-FSM and  U.S.-Marshall Islands joint management committees to consider uses of  sector grants, the government of the Marshall Islands stated that the  amended compact provides only for uses of the grants in the Marshall  Islands. We clarified some statements and our recommendation in  response to this observation. The government of the Marshall Islands  further stated that the amended compacts’ enabling legislation authorized  additional appropriations for grants to affected jurisdictions to offset  impact and that it is the responsibility of Congress to compensate affected  jurisdictions for any adverse impact.
The government of Palau generally agreed with our findings. Palau also  emphasized that positive compact impact should be determined and  asked that the contributions of Palau’s citizens in the U.S. armed forces  be recognized in our report. The government of Palau commented that  our report does not adequately explore whether compact impact differs  among FAS citizens. However, we found that not all local government  agencies reported compact impact costs by FAS country, limiting our  ability to perform such an analysis. Finally, the government of Palau  stated that some persons who entered the United States after the date of  the compacts may be lawfully present under authorities other than those  of Section 141 of the compact and therefore would not count towards  compact impact. We agree and have noted this in the report.
We are sending copies of this report to the Secretary of the Interior, the  Secretary of State, and the Director of the U.S. Census Bureau. In  addition, this report will be available at no charge on GAO’s Web site at  http://www.gao.gov.
If you or your staffs have any questions about this report, please contact me  at (202) 512-3149 or gootnickd@gao.gov. Contact points for our offices of  Congressional Relations and Public Affairs may be found on the last page of  this report. Key contributors to this report are listed in appendix XVII.
section_title: Appendix I: Scope and Methodology
paragraphs: This report describes migration to U.S. areas from the Federated States  of Micronesia (FSM), the Marshall Islands, and Palau under those  countries’ compacts of free association with the United States; reviews  approaches to enumerating these compact migrants; evaluates reporting  of these migrant’s impact on Guam, Hawaii, and the Commonwealth of  the Northern Mariana Islands (CNMI); and reviews Department of the  Interior (Interior) grants related to compact migration. In addition,  appendix II provides information on the growing Marshallese compact  migrant population in Arkansas and its impact.
To describe compact migration to U.S. areas, we reviewed survey data  from 1993 through 2010. As part of this review, to approximate the  dispersion of compact migrants, we arranged with the U.S. Census  Bureau (Census) to purchase a special tabulation of multiyear American  Community Survey (ACS) data gathered from 2005 through 2009. These  state estimates represent migrants if they are present in sufficient  numbers to be reportable; state estimates are unreportable when fewer  than 50 people respond in each category of cross-tabulated data. Census  also applies statistical disclosure avoidance techniques to the tabulated  data to protect respondent confidentiality, such as suppressing the  number and location of compact migrants. The new tabulation mirrors the  one used by Census to estimate the number of compact migrants in  Hawaii in 2008 using ACS data. To determine the trend of migrants as a  percentage of the populations of affected jurisdictions and identify  reasons for migration, we reviewed our previous report on compact  migrant impact and analyzed the information presented in previous  enumerations. To estimate the populations of affected jurisdictions, FSM,  and the Marshall Islands in 2003 and 2008, we used the 1999 Marshall  Islands census, an estimate from the Marshall Islands’ embassy to the  U.S. for the 2011 population, and 2000 and 2010 censuses for the FSM  and the affected jurisdictions, assumed that the population changed at a  constant rate, and interpolated the population counts for the years in  between. The 1993 and 1998 estimates of affected jurisdiction  population are existing Census estimates.
To assess Interior and Census approaches to enumerating compact  migrants in affected jurisdictions, we reviewed the requirement for the  enumerations in the amended compacts’ enabling legislation. In addition,  we interviewed Census and Interior officials and officials in affected  jurisdictions who had contacted or worked with Census and Interior as  they developed the 2003 and 2008 enumerations. We also reviewed  affected jurisdictions’ written critiques of the enumerations. We reviewed  Office of Management and Budget (OMB) survey criteria, and we  compared the surveys to these criteria by reviewing the reported  methodology of the 2003 survey and the supporting documents for the  2008 survey such as the enumerator’s manual, Census’s source and  accuracy statement, and Census quality control review documents. We  also conducted a literature review to identify existing studies of the uses  and limitations of the various methods for enumerating populations such  as compact migrants.
To compile the compact impact costs reported by the governments of  Guam, Hawaii, and the CNMI, we used the most recent data that they  submitted to Interior for 1986 through 2010, Interior’s 2010 compact  impact report to Congress, and data from our previous report. We then  categorized the reported costs using the categories that the amended  compacts’ enabling legislation defines as eligible for compact impact  funding—education, health, public safety, and social services and  infrastructure related to such services—to identify the main sources of  compact impact reported by the affected jurisdictions. For additional  context, we reviewed the narrative of the reports submitted by affected  jurisdictions and interviewed compact migrants and officials in affected  jurisdictions. To identify the eligibility of compact migrants for selected  federal programs that may help address the compact impact on affected  jurisdictions, we reviewed existing legislation and discussed our findings  with officials from affected jurisdictions and subject matter experts.
To evaluate the affected jurisdictions’ estimates of compact impact costs,  we compared the costs that the affected jurisdictions had reported to  Interior since 2004 with cost estimation criteria that we developed based  on OMB guidelines as well as our own guidance on cost -benefit  analyses, a previous report on costs associated with illegal alien  schoolchildren, and requirements in the amended compacts’ enabling  legislation. We identified the methodologies used by local government  agencies in the affected jurisdictions to develop their compact impact  costs and determined their limitations by reviewing the compact impact  reports; interviewing officials from many of the reporting agencies in  affected jurisdictions; and collecting information from the Guam and the  CNMI’s single audit reports. Using our cost criteria, we developed  questions and circulated them to affected jurisdictions’ reporting  agencies, providing them an opportunity to further explain how they  derived their estimates. Not all agencies responded to these questions;  therefore, additional examples beyond the ones we have identified may  exist. Table 8 includes Hawaii’s most recent reported compact impact  costs which were submitted to Interior in August 2011. However, our  analysis of compact impact reporting does not include this information.  Officials from Hawaii’s Department of Human Services, Department of  Health, and Department of Education said that their reporting  methodologies had generally not changed since their last report, which  was submitted in 2008 and which we included in our analysis. However,  the Department of Education said that it excluded federal funds from its  2008 through 2011 compact impact costs and corrected its reporting error  regarding the number of compact students for 2006 through 2008. In  addition, the Department of Health said that the Tuberculosis Branch  changed its methodology and the Family Health Services Division  changed its presentation of the data to show excluded federal funds. To  identify federal funding received by Guam and the CNMI for programs  serving compact migrants, we analyzed single audit reports from 2005  through 2009 in the CNMI and from 2004 through 2008 in Guam.
To assess Interior’s guidelines on compact impact reporting, we reviewed  the requirements contained in the amended compacts’ enabling  legislation, and we identified and reviewed Interior’s 1994 compact impact  reporting guidelines and the Interior Office of Inspector General’s 1993  report that prompted the creation of these guidelines. We also interviewed  officials from the affected jurisdictions and Interior regarding their use of  these guidelines to develop cost estimates. To assess Interior’s  compliance with the congressional reporting requirements of the  amended compacts’ enabling legislation, we reviewed the legislation, met  with Interior officials, and assessed the Interior’s 2010 report to Congress  against the specific elements required in the legislation.
To describe compact migrants’ participation in local economies, we  generally used data from the Micronesian surveys in 1997 and 2003 as  reported in the 2008 report of the 2003 survey, supplementing these  data where possible with additional information from local and natio nal  agencies and other literature. To determine whether additional data on  the compact migrants’ role in the economy exist, we contacted agencies  from affected jurisdictions that address labor and taxation and reviewed  reports and data sets. These sources of additional information and data  include the following:    To describe compact migrant health status and the health and  education systems in the FAS, we reviewed and summarized  published literature.    To describe compact migrants’ contributions to the labor market in the  CNMI, we analyzed data from the CNMI Department of Finance for  2001 through 2009, comparing the size of the compact migrant labor  force to the size of the overall CNMI labor force and the income of the  compact migrants to that of the general population.    To compare the amount of taxes paid by compact migrants with the  amount paid by the general population in Guam, we used data from  the 2008 and 2009 Guam Annual Census of Establishments, the 2008  and 2009 Guam Current Employment Reports, the 2008 Guam  Statistical Yearbook, and the 2008 migrant survey. These data  allowed us to estimate under certain assumptions the number of  compact migrants and others working in the private and public  sectors, their average wages, and taxes paid. The method we used  to prepare this estimate drew on a method first outlined by an official  in the Guam Bureau of Statistics and Plans.    To estimate the amount of remittances that migrants sent and  received while in the U.S. areas, we analyzed data from the Inter- American Dialogue, the fiscal year 2008 Economic Reviews of the  FSM and the Marshall Islands, and data reported in the 2008 report of  the 2003 survey. Because of the limitations and significant variation in  the estimates provided by these three sources, we determined that  these data were not sufficiently reliable for our purposes.    To determine the number of FAS-born persons serving in the U.S.  armed forces, we requested a special tabulation from the Department  of Defense’s Active Duty Personnel Master and Reserve Components  Common Personnel Data System.
To review Interior’s compact impact grants, we reviewed our previous  report on Interior grant management, the requirements of the amended  compacts’ enabling legislation, and Interior’s 2010 Financial Assistance  Manual. We assessed the management of the grants against the  legislation and manual by reviewing Interior’s compact impact grant files  for Guam, Hawaii, and the CNMI for fiscal years 2004 through 2011. In  each grant file, we reviewed grant narratives and correspondence and  collected the grant name, number, amount, description, status, remaining  balance, and purpose, as well as any funding redirections or  deobligations. To determine the extent to which compact sector grants  may address compact impact, we interviewed compact migrants and  Interior and affected jurisdiction officials and collected grant allocation  data from Interior for compact sector grants. We then discussed the  nature of sector grants and compact impacts in the affected jurisdictions  with Interior officials to identify the amount and purpose of compact sector  grants that could be linked to addressing compact migrant impact.
To provide information on the migrant population and impact in Arkansas,  we met with state and Springdale, Arkansas officials and with employers  and migrants. We reviewed existing Census population reports and the  Census tabulation of ACS data as well as existing Arkansas government  reporting and published literature on Arkansas’s compact migrant impact.  Although the amended compacts’ enabling legislation does not define  Arkansas as an affected jurisdiction and the state government therefore  does not submit reports to Interior, we compiled data available for 2004  through 2010 from the Arkansas Department of Health, Arkansas  Department of Correction, and the Springdale School District. We then  assessed the limitations of these data in the same manner as we  assessed the data for affected jurisdictions.
We conducted this performance audit from September 2010 through  October 2011 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Growth and Impact of Marshallese Compact Migration in Arkansas
paragraphs: In response to congressional interest, this case study reviews existing  enumerations of the compact migrant population of Arkansas and their  impact. Arkansas’s compact migrant population is almost exclusively from  the Marshall Islands and is concentrated in the rapidly growing northwest  Arkansas counties of Benton and Washington (see fig. 7). The amended  compacts’ enabling legislation does not define Arkansas as an affected  jurisdiction; therefore, the state is not eligible to receive compact impact  grants, and data on Arkansas’s migrant population and impact are limited  in comparison to data for the affected jurisdictions.
subsections: section_title: Census Data Provide Varying Estimates of Compact Migrants in Arkansas
paragraphs: Tabulations of data from the 2005-2009 ACS show an estimated 1,150  (with a 90 percent confidence interval of 933 to 1,367) Marshallese  compact migrants living in Arkansas. The 2010 decennial census reports  that 4,324 persons in Arkansas responding to the race question on the  2010 form identified themselves as Marshallese. Additionally, in 2009  and 2010, the Springdale School District reported that 1,323 and 1,579  students, respectively, identified as Pacific Islanders when enrolling in  Springdale schools. In comments on a draft of this report, the government  of Arkansas stated that it had serious doubts about the count of Arkansas  migrants using ACS data and Census commented that the estimates  described here are not based on the same criteria and should not be  compared. See appendix IV of this report for a further discussion of the  differences between ACS and 2010 decennial census data.
section_title: Local Response to Marshallese Migration
paragraphs: Concerns in Arkansas regarding compact migrants are similar to those  expressed by officials in affected jurisdictions. Arkansas government  officials and service providers cited the following concerns: migrant  students lagging academically behind their peers; low levels of family  involvement in education; the prevalence of communicable and  noncommunicable diseases; reluctance of migrants to use preventive  health care; language barriers; cultural barriers; and crowded living  conditions.
To address some of these concerns, Northwest Arkansas local  government and social service agencies have begun to offer services to  the Marshallese community in recent years. For example:    The Springdale School District has provided supplemental tutoring  and employs two Marshallese translators.    The Jones Center for Families, a nonprofit community service  organization, employs a Marshallese Community Outreach  Coordinator and has helped facilitate the activities of the Gaps in  Services to Marshallese Task Force, a network of interested  individuals headed by a retired Jones Center employee.    The task force has used grants from the Centers for Disease Control  and Prevention and the Arkansas Minority Health Commission to  survey the health concerns of Marshallese and prepare an outreach  booklet and DVD to aid Marshallese migrants in adapting to life in the  state.    The Washington County Department of Health dedicates four staff to  its Marshallese Outreach Team and will add two more staff when it  opens the Marshallese outreach clinic in 2011.    Some local agencies noted that they work in cooperation with the  Marshall Islands consulate in Springdale. Opened in 2008, this  consulate is the only FAS consulate in the continental United States.
section_title: Arkansas’s Growing Costs of Serving Compact Migrants Are Primarily Documented for Education and Health
paragraphs: Data provided by Arkansas state officials for 2004 through 2010 identified  approximately $51 million in costs for education, health, and public safety  services to compact migrants (see table 4). Available data from Arkansas  are not comparable with data from affected jurisdictions. Arkansas does  not collect data on a number of costs reported by Guam, Hawaii, and the  CNMI, particularly costs for social services. In addition, not all Arkansas  state agencies compiled their cost data on compact impact annually,  whereas the affected jurisdictions have generally compiled their data  annually.
Education. The estimated education service costs are for the Springdale  School District, where most Marshallese school children live. The  estimate for Springdale is based on average per-pupil expenditures,  similar to some of the affected jurisdictions’ cost estimates. However,  these expenditures may overstate actual costs to the extent there is  excess capacity in the schools to absorb a marginal increase in  population. The estimates may also understate actual costs by not  including higher than average costs for additional services to  Marshallese, such as language education. Finally, student population  data prior to 2009 are incomplete.
Health. Arkansas estimated costs for health services to compact migrants  by compiling costs for the population identified as of Pacific Islander  ethnicity; as a result, Arkansas’s estimates may overstate compact  migrant health costs by including services to Pacific Islanders who are not  compact migrants. However, the estimates do not include costs for the  Arkansas Women, Infants and Children Program and were not complete  for all years for tuberculosis and sexually transmitted disease treatment,  potentially leading to an underestimate of total costs.
Social services. Arkansas does not track the use of some state-funded  services by ethnicity and therefore could not estimate the costs of  providing these services to compact migrants. However, officials stated  that compact migrants are eligible for programs such as the state’s  Division of Developmental Disabilities Services; Division of Youth  Services; and ARKids First, which provides health insurance to low- income U.S.-citizen children of compact migrants. Unlike affected  jurisdictions, Arkansas does not provide Medicaid equivalent services to  noncitizen compact migrants.
section_title: Arkansas Migrants Affect the Local Economy, but Data on Their Impact Are Limited
paragraphs: As in affected jurisdictions, Arkansas compact migrants contribute to the  local economy through payment of taxes and participation in the labor  market.
Taxes. Marshallese are subject to federal, state, and local taxes; however  Arkansas does not disaggregate the tax revenue by ethnic categories or  citizenship and there are no data on consumption and remittances.
Labor market. Marshallese fill a significant niche in the local poultry  industry. According to employers in northwest Arkansas, Marshallese  represent between 14 and 37.9 percent of the total workforce at some  plants of major poultry producers, such as Tyson, Cargill, and George’s.  Tyson officials in Springdale stated that they have begun referring some  Marshallese job applicants to plants elsewhere in Arkansas and in  Oklahoma. In addition, Tyson may begin recruiting workers in the  Marshall Islands. According to Marshall Islands officials, Tyson  representatives have visited the Marshall Islands.
section_title: Appendix III: American Community Survey Estimates of Compact Migrants
subsections: section_title: ACS Estimates of Compact Migrant Populations in U.S. Areas
paragraphs: Table 5 shows the estimated population of the compact migrants from  each FAS in the U.S. states based on tabulations of Census’ 2005-2009  ACS. Taking into account sampling uncertainty, the table shows the  lower-bound and upper-bound population interval that corresponds to a  90 percent confidence interval. Estimates of compact migrants from each  FAS in Guam and the CNMI, using data from Census’s 2008 survey of  compact migrants, are shown for comparison.
section_title: Appendix IV: 2010 Decennial Census Data on Micronesians by Race
paragraphs: The 2010 decennial census identified 22,434 Native Hawaiian or Pacific  Islanders—alone or in combination with another race—who identified  themselves specifically as Marshallese residing in the 50 U.S. states in  2010. The largest Marshallese populations were in Hawaii, Arkansas,  and Washington, which together accounted for 62 percent of the total  reported Marshallese residing in the 50 states. See table 6. As of  September 2011, Census has not released a separate count of U.S.  residents who identified themselves as one of the FSM ethnicities or  Palauan, but plans to do so between December 2011 and April 2012. As  of November 2011, Census race data for Guam and the CNMI had yet to  be released.
The number of Marshallese reported by the 2010 decennial census differs  from estimates of Marshallese compact migrants derived from the Census  2005-2009 ACS. For example, the 2010 census reported 7,412  Marshallese in Hawaii and 4,324 in Arkansas, while the ACS tabulation  estimates 3,535 and 1,150 Marshallese compact migrants in Hawaii and  Arkansas, respectively. The census counts are not meant to be compared  with ACS 5 year estimates of compact migrants and several factors may  explain the differences:    The ACS and 2010 census figures use different definitions. The ACS  compact migrant estimates include only those born in the Marshall  Islands who arrived in the United States under the terms of the  compact after 1986 and their children. The census counts are defined  by the respondents’ reported race and not limited by the post-1986  time frame of the compact.    The ACS and 2010 census figures have different time frames. The  ACS estimates are based on data collected from 2005-2009 and do  not include compact migrants to U.S. areas in 2010. In addition, the  ACS estimate does not include births that are included in the 2010  counts.    The ACS and 2010 census use different approaches. The 2010  census attempts to reach all persons in the United States, while the  ACS is a sample of the population. The sampling method used by the  ACS was not specifically designed to make estimates of a population  as small as the compact migrants.    The ACS and 2010 census have different levels of outreach. Census  ran extensive public service announcements of the 2010 survey, and  local governments and community groups encouraged participation.  However, Census does not conduct a similar public campaign to  encourage participation in the ACS.
section_title: Appendix V: Attributes of 2003 and 2008 Approaches to Enumerating Compact Migrants
paragraphs: Table 7 shows key attributes, related to survey design, coverage,  nonresponse, measurement, and sampling error, for the 2003 and 2008  Census approaches to enumerating compact migrants.
section_title: Appendix VI: Compact Impacts Reported by Affected Jurisdictions
paragraphs: Since 1986, affected jurisdictions have submitted to Interior compact  impact reports that include descriptions of, and estimated costs for,  education, health, public safety, and social services that local government  agencies provided to compact migrants (see table 8 for costs reported for  1986 through 2010). However, assessed against best practices for cost  estimation, the 2004-2010 estimates contain a number of limitations with  regard to accuracy, adequate documentation, and comprehensiveness,  affecting the reported costs’ credibility and preventing a precise  calculation of total compact impact on the affected jurisdictions.
Best practices and guidance state, among other things, that to be  credible, cost estimations should be characterized by accuracy, adequate  documentation, and comprehensiveness.    Accuracy. Estimates should contain few errors and reflect actual  costs.    Adequate documentation. Cost estimates should include a detailed  description of the derivation of the reported costs, such as the source  data used, the calculations performed and their results, and the  methodology used. Cost estimates should be captured in such a way  that the data can be traced back to, and verified against, their  sources, so that estimates can be replicated and updated.    Comprehensiveness. Estimates should be structured in sufficient  detail to ensure that cost elements are neither omitted nor double  counted and should include documentation of all assumptions.
subsections: section_title: Compact Impact Cost Estimates Contain Numerous Limitations
paragraphs: We found a number of limitations affecting the credibility of cost estimates  in the compact impact reports (2004-2010) that we reviewed. (See  appendix I for a description of our methodology in evaluating the cost  estimates.)
Definition of compact migrants. Several local government reporting  agencies that responded to our inquiries did not define compact migrants  according to the criteria in the amended compacts’ enabling legislation  and, as a result, may have either overcounted or undercounted costs.  The legislation defines the population to be enumerated as persons, or  those persons’ children under the age of 18, who pursuant to the  compacts are admitted to, or resident in, an affected jurisdiction as of the  date of the most recently published enumeration. By counting compact  migrants based on their ethnicity or language, agencies may have  overcounted by including those present prior to the compacts; by  identifying compact migrants by their citizenship, agencies may have  undercounted, because they would have excluded compact migrants’  U.S.-born children under the age of 18. For example, school  administrative data from each of the affected jurisdictions show a  potential for overcounting by identifying compact migrant children by  means of ethnicity (as in Guam and the CNMI) or the language spoken at  home (as in Hawaii). According to the 2003 Census survey data,  approximately 32 percent of FAS citizens identified in the CNMI, 10  percent of those identified in Guam, and 13 percent of those identified in  Hawaii were not part of the defined impact population. Therefore, the  number of children used to estimate impacts may also be overstated.
Federal funding. Guam, Hawaii, and the CNMI, among other U.S. states  and territories, receive federal funding for programs that compact  migrants use; however, not all compact impact reports accounted for this  stream of funding. For example, the Hawaii Department of Education  reported as compact impact the cost of programs that federal funding had  partially addressed. In addition, Guam and the CNMI’s single audit  reports show that these jurisdictions have received federal revenue from  various agencies such as the U.S. departments of Health and Human  Services (HHS), Agriculture, and Homeland Security. To the extent that  revenue for these programs is based on population counts or data on  usage, the presence of, and use of services by, compact migrants lead to  federal offsets. For example, in fiscal years 2004 through 2008, Guam  received an annual average of $1,027,825 from HHS for the Consolidated  Health Centers program, an amount based partly on the number of  beneficiaries in Guam. Based on Guam’s resident and compact migrant  populations in 2008, services to compact migrants accounted for a  $112,942 share of that amount—equal to 16 percent of compact migrant  impact costs reported by the Guam Bureau of Primary Care Services.  However, in reporting impact costs, the Guam Bureau of Primary Care  Services did not deduct the HHS funding that was used for compact  migrants.
Revenue. Multiple local government agencies that receive fees as a  result of providing services to compact migrants did not consider them in  their compact impact reports. For example, the CNMI Department of  Public Health and Guam Department of Mental Health and Substance  Abuse did not include payments received from compact migrants into  their costs. This exclusion of revenue may cause an overstatement of the  total impact reported.
Capital costs. Many local government agencies, such as the CNMI  Public School System, did not include capital costs in their annual  compact impact reporting. This exclusion can cause an understatement of  total costs of providing services to compact migrants.
Per person costs. Many local government agencies estimated impact  costs based on average, rather than specific, costs of providing services  to compact migrants, possibly leading to under or overestimations. For  example, the CNMI Department of Public Health based the cost of  providing healthcare services to compact migrants on the number served  out of the total patient load instead of totaling each patient’s specific  costs. However, other agencies more comprehensively accounted for  costs by including additional compact impact expenses beyond the  average costs. For example, the Hawaii Department of Education  included language training costs in its reported per pupil expenditures.  Alternatively, the CNMI Public School system did not include special  services such as language training or translation which suggests an  underestimation.
Discretionary costs. Some compact impact costs reported by local  government agencies were for benefits or services provided at the  discretion of the affected jurisdiction.
Data reliability. In one case, we found a discrepancy between the data  reported and the data provided during this review. According to the  Hawaii Department of Education, this discrepancy resulted from a system  error that caused a double counting of Marshallese students over a 5- year period, which resulted in an overestimation of impact costs. For its  2011 impact report, the Department of Education said it excluded federal  funds from its 2008 through 2011 compact impact costs and corrected the  reporting error made regarding the number of compact students for 2006  through 2008.
Many local government agencies did not report their methodologies for  estimating costs of providing services to compact migrants under the  compacts. For example, the Hawaii Department of Human Services did  not provide a detailed description of how it derived its estimates. As a  result, it is difficult to determine whether the reported figures are accurate.  Further, some agency methodologies vary between affected jurisdictions.  For example, Guam prorates police costs based on the percentage of  compact migrants in the total population, and the CNMI prorates its police  costs based on the percentage of total arrests that are FAS citizens. The  Guam Bureau of Statistics and Plans said it documented its  methodologies in its 1995 compact impact report and applied these  approaches in calculating its compact impact costs. However, these  methodologies were not discussed in Guam’s annual reports from 2004 to  2010 and were generally not used by the reporting agencies.
Hawaii has not submitted annual compact impact reporting each year and  is not required to do so, but for those years when affected jurisdictions  submitted impact reports to Interior, not all local government agencies  included all compact impact costs. However, some agency costs were  reported in subsequent fiscal year reports. For example, Hawaii did not  provide estimated costs to Interior in 2005 and 2006, although it included  partial costs incurred in those years in its 2007 and 2008 reports. Without  comprehensive data in the year they are submitted, the compact impact  reports could understate Hawaii’s total costs. In addition, compact impact  reporting has not been consistent across affected jurisdictions. For  example, Guam and the CNMI included the cost of providing police  services, while Hawaii did not.
section_title: Appendix VII: Interior-Awarded Compact Impact Grants to Affected Jurisdictions from 2004 to 2011
paragraphs: Interior distributed the compact impact grants to the affected jurisdictions  in 2004 through 2010 as follows:    From fiscal year 2004 through 2009, based on the results of 2003  enumeration, Interior annually awarded approximately $14 million to  Guam, $10.6 million to Hawaii, and $5.2 million to the CNMI.
In fiscal year 2010, having recalculated the division of funds based on  the results of the 2008 enumeration, Interior awarded approximately  $16.8 million to Guam, $11.2 million to Hawaii, and $1.9 million to the  CNMI.
The amended compacts’ enabling legislation and Interior’s Office of  Insular Affairs’ Financial Assistance Manual guide the administration and  management of compact impact grants. An official at Interior said the  agency uses the same grant management process for compact impact  funds as it does its other grants. To implement these requirements,  Interior has reviewed and at times questioned whether the proposed uses  of compact impact grant funds were in keeping with the amended  compacts’ enabling legislation.
While the vast majority of Interior reviews resulted in approvals, Interior  questioned some uses in Guam and the CNMI. Specifically:  Interior initially viewed Guam’s fiscal 2010 request to fund a  Community Pool Complex and Fitness Trail as only distantly  connected to compact migrants. Ultimately, Interior accepted Guam’s  justification that it could improve the health of migrants by reducing  obesity and provide a healthy outlet for youth, thereby reducing public  safety concerns.
In fiscal year 2011, Interior approved the use of compact impact grant  funds for Guam Memorial Hospital Authority (GMHA), but restricted  their use to future purchases rather than paying past bills, contrary to  previous Interior practice. According to an Interior official, this change  was made in order to strengthen the link between migrant impacts  and compact funds and to stop “bandaging” the chronic financial  issues of GMHA.
In fiscal year 2006, Interior denied a CNMI grant proposal to use  $400,000 for the Marianas Visitors Authority and $500,000 for  Financial Control/Economic Recovery Initiatives. An Interior official  said the agency did not retain documentation of the specific nature of  these grant requests or why it denied them.
As of August 2011, Guam had approximately $14.2 million in compact  impact grant funds available from fiscal years 2004 to 2011 that it had yet  to draw down from Interior. Both Hawaii and the CNMI have fully drawn  down prior fiscal year funds.
See table 9 for a complete list of Interior compact impact grant awards by  jurisdiction and fiscal year.
section_title: Appendix VIII: Comments from the Department of the Interior
subsections: section_title: GAO Comments
paragraphs: 1.  The Department of the Interior suggested that our report’s use of the  terms “compensation” and “reimbursement” to describe compact  impact funds could give the impression that these funds were  intended to fully reimburse the affected jurisdictions for their added  expenses when the amended compacts' enabling legislation states  that compact impact grants are “to aid in defraying costs incurred by  affected jurisdictions as a result of increased demands placed on  health, educational, social, or public safety services or infrastructure  related to such services due to the residence in affected jurisdictions”  of compact migrants. We have modified the text to make our  characterization of the act’s intent clearer. Also in response to this  comment, as well as comments received from Guam, we have cited  additional provisions of the amended compacts’ enabling legislation  that authorize funds to address compact impact. As the affected  jurisdictions may view the law as implying a reimbursement, we have  kept such a characterization when it reflects the viewpoint of the  affected jurisdiction.   2.  The Department of the Interior stated that the record of the compact  negotiations, the compact agreements, and the amended compacts’  implementing legislation do not support the use of sector grants to  provide assistance to FAS expatriates living in affected jurisdictions.  Interior stated that the compact provides sector grants to support FAS  government activities in-country and that the few training programs  taking place outside of the FAS are the result of the FAS  governments’ choices in the use of sector grants. We agree with  Interior that the sector grants listed in the compacts are to support the  governments of the FSM and the Marshall Islands by providing grants  in certain sectors such as health care and education; however, we  note that the compacts allow grants to fund other sectors as mutually  agreed and we have added this text to our description of compact  economic assistance. Currently, limited FSM compact grant funds are  being used to support worker training in Guam, addressing a concern  of compact migrants in Guam as well as the Guam government.  According to the Center for Micronesian Empowerment,  approximately 45 percent of its trainees in Guam are compact  migrants residing in Guam.  3.  The Department of the Interior did not agree with our recommendation  that it work with affected jurisdictions to evaluate the current use of  compact impact grant funds and consider alternative uses. Interior  observed that the amended compacts' enabling legislation authorizes  broad uses and that it has chosen to respect the priorities of  governors. Interior further stated that it does not believe there would  be any practical gains from proposing alternative uses. We believe  this position overlooks opportunities to respect the priorities of the  governors while at the same time working with the governors to  review their current use of funds and consider alternatives uses. In the  course of our review we identified alternative grant uses for  consideration. We found that government officials, service providers,  and compact migrants in the affected jurisdictions identified a  significant need for language and cultural assistance, job training, and  improved access to basic services for compact migrants. The sources  suggested that migrant needs could be addressed by, for example,  establishing centers that offer such services. This may also help  reduce some of the negative impact from compact migration. For  example, more translators could result in more effective health  treatment.
Other alternative uses may also offer practical gains. For example,  health experts have advocated for the adoption of primary health care  as a more cost-effective strategy for providing health care in the  Pacific Islands. This adoption would address the need for preventive  care among Micronesians and Marshallese in Hawaii—studies have  shown that the Marshallese in Hawaii do not generally seek  preventive care and only seek professional health care when they  experience a certain level of pain.  4.  The Department of the Interior stated that it believes compact sector  grants are limited to use within the FAS; however, Interior agreed that  some activities may be related both to sector grant priorities and to  programs that would better prepare migrants to live and work in the  United States. Interior stated that our report implies that compact  sector grant funds should be shifted from providing assistance to the  FAS governments to providing assistance to FAS citizens living in  affected jurisdictions, an action that Interior sees as inconsistent with  the compacts and their enabling legislation. We expect that compact  sector grant awards will be provided consistent with the terms of the  compacts and the amended compacts’ enabling legislation; we do not  intend to imply that funds should be shifted from the FAS  governments to FAS migrants. In response to Interior’s concern, we  clarified that our findings and recommendation highlight the  opportunity for the joint management committees to consider the use  of sector grants to the FSM and Marshall Islands in ways that address  the concerns of FAS citizens—whether they are in the FAS or in U.S.  areas—and the concerns of the affected jurisdictions. The  recommendation supports consideration of the use of sector grants in  ways that respond to the concerns of FSM and Marshall Islands  migrants and the affected jurisdictions.
section_title: Appendix IX: Comments from the Census Bureau
subsections: section_title: GAO Comments
paragraphs: 1.  Census emphasized that the migrant survey content was purposely  chosen to enumerate compact migrants while minimizing costs and  maximizing respondent participation. As our report notes, however,  collecting only those data needed to enumerate migrants limited the  collection of data that stakeholders such as affected jurisdictions  would have found useful.  2.  Census stated that, in contrast to our report’s findings, the 2008  Guam and CNMI surveys were designed to produce estimates with a  similar coefficient of variation to the ACS estimates for Hawaii.  However, the 2008 Guam and CNMI estimates are point-in-time  estimates while the ACS is a multiyear estimate. As Census guidance  on interpreting the ACS multiyear estimates states, “The ACS  estimates the average of a characteristic over the year or period  years, as opposed to the characteristic at a point in time” and “When  comparing estimates across geographies or subpopulations, users  should compare the same period length for each estimate.” Our  findings do not suggest that the 2008 Guam and CNMI surveys are  not comparable with the ACS estimates for Hawaii in terms of  reliability, but rather are not comparable in terms of their sampling  methods and reporting period. We show that the estimates have  similar relative errors, as presented in appendix V. If the reported  precision for the Guam and CNMI surveys is accurately estimated,  and includes proxy respondents, the estimates have similar levels of  precision.  3.  Census recommended that the Department of the Interior adopt the  two-pronged approach described in our report for the 2013  enumeration of compact migrants and stated that the approach would  provide cost-effective required estimates. We agree that the low cost  is a strength of this approach. As our report notes, however, the 2013  two-pronged approach will have limitations such as using data from  different time periods, limited comparability with prior data, and limited  collection of demographic data.  4.  Census referred to a footnote in our draft report that indicated that the  homeless population was not represented in the 2008 surveys. We  have moved this discussion to appendix V and included an  assessment of the varying coverage of the homeless population of the  2003 snowball, ACS, and 2008 migrant survey in Guam and the  CNMI.  5.  Census disagreed with our statement that the effect of using an earlier  time frame of data in Hawaii relative to Guam and the CNMI results in  an undercount of compact migrants in Hawaii relative to Guam and  the CNMI. However, as our report notes, migration is ongoing, with  approximately 7,000 persons estimated to have left the FSM and the  Marshall Islands in 2007 and 2008. Other available data also indicate  that the migrant population is growing. Because the Hawaii data do  not include 2008 and the Guam and CNMI data are from the closing  months of 2008, nearly a year of additional migration is captured in  the Guam and CNMI totals that is not included in the Hawaii ACS  data. Alexander and Navarro (2003) show that even the upper bound  of the ACS multiyear confidence interval, an amount that is greater  than the estimate, can lag behind the actual value for a growing small  population at a given point in time.  6.  Census stated that the frequent changing of address by the compact  migrant population, cited by Guam and CNMI officials as potentially  leading to a miscount, would not produce bias in the surveys as  designed. We agree with Census’ comment that inaccurate migrant  counts in the sample design would lead to lack of efficiency and not  bias. However, we note that researchers inside and outside the  Census Bureau studying the foreign-born population agreed that an  assumption of complete coverage of legal immigrants and temporary  migrants in the 2000 Census was unreasonable indicating the  potential for coverage error and bias of the estimates based on the  2000 Census sampling frame. Further, migrants, especially those who  frequently change address, are not only hard to count in the census,  but they also are less likely to participate in other surveys, indicating  the potential for nonresponse bias. Census further stated that it gave  both Guam and CNMI an opportunity to provide local information that  might improve the accuracy but that neither produced this information  before the design had to be finalized. However, we note that both  Guam and CNMI officials stated that, from their perspective,  implementation of the survey was rushed and they had only limited  opportunity to provide such input.  7.  Regarding our statement about the change in enumeration method  limiting the comparability of the 2008 and 2013 enumerations, Census  stated that both methods would provide a comparable count, which is  what is required for the purpose of determining funding. We note that  the estimates across jurisdictions, within an enumeration, are not  comparable. We note that estimates across enumerations are not  comparable due to changing methodology and the lack of use of a  method that is statistically designed to measure change over time.  8.  Census asserted that its varying estimates of compact migrants in  Arkansas are not based on the same criteria and therefore should not  be compared. We agree that the surveys have different bases for  identification and have identified several reasons for these differences  in appendix IV. However, we have also noted Arkansas’ concerns  about the accuracy of the ACS data.  9.  Census disagreed with our observation that the ACS was not  designed to make estimates of a population as small as the compact  migrants and notes that concluding that the ACS cannot provide  reliable estimates depends on which definition of “reliable” is used.  We note that the Census Bureau did not determine the level of  precision, or reliability, necessary for these estimates to be used for  funding. As we show in appendix III, while the ACS can be used to  detect the presence of compact migrants, the smaller the population,  the less reliable the estimates will be, as indicated by the wide  confidence intervals. In some cases, the estimates are so unreliable  that we suppressed them.  10. In response to our observation that Census did not provide an  unweighted response rate, Census stated that it is not usual for the  agency to publish unweighted response rates. Our review of OMB  Standards and Guidelines for Statistical Surveys indicates that both  unweighted and weighted response rates should be calculated and  reported. However, an unweighted response rate was not provided in  Census Survey Documentation that we received for review.  11. Census disagreed with our statement that the use of proxy  respondents indicates an overstatement of the response rate and  asserts that proxy responses are generally accepted in household  surveys and included in the response rate. Proxy respondents are  substitutions for the intended sample member, and Census  acknowledged that proxy responses are a potential source of  nonsampling error due to the proxy respondent’s potential lack of  knowledge of the sample respondent’s information. OMB guidelines  and standards call for the calculation of response rates without  substitutions, as well as overall response rates that include  substitutions.  12. Census stated that the issues of nonresponse bias, as well as  collection strategy and content, that we highlight regarding the 2008  survey effort were also present in the 2003 survey but are not listed  for the 2003 survey. For the 2003 survey, we had no documentation  of the nonresponse bias or the collection strategy and content  information related to personal interviewers leaving contact  information. We have noted Census’s comments in the report.  13. Census stated that final weights were used when calculating the  variance estimates. While we acknowledge that final weights,  including a nonresponse adjustment factor, were used when  calculating variances, Census documentation does not indicate that  variance estimates properly accounted for the variability due to the  nonresponse adjustment factor, such as through the use of replicate  weight methodologies, and thus will likely result in an underestimate  of the variance.
section_title: Appendix X: Comments from the Government of Hawaii
subsections: section_title: GAO Comments
paragraphs: 1.  The government of Hawaii stated that while the report sets out relative  strengths and weaknesses of the different enumeration  methodologies, it does not highlight the inherent inadequacies of the  American Community Survey (ACS) for enumeration of small discrete  groups such as compact migrants. Throughout the report we note the  limitations of the ACS. As our report notes, ACS data have limited  statistical reliability for populations as small as compact migrants in  Hawaii. We further note in appendix V that ACS estimates are not  equivalent to point-in-time estimates and may be biased due to  nonresponse and coverage error.  2.  The government of Hawaii stated that the report does not point out the  discrepancies between the Census estimates in each affected  jurisdiction and the utilization data for services provided by agencies  in each jurisdiction, such as the number of compact migrant students  enrolled in school. We did explore the use of school data in particular  as a basis for evaluating the enumeration findings; however, we found  that the schools identified compact migrant students by language (as  in Hawaii) or ethnicity (as in Guam and the CNMI). These definitions  do not match that contained in the amended compacts' enabling  legislation and could include the children of persons with FAS  ethnicity who were present in Hawaii prior to the compacts or the  children of persons who were born in U.S. areas. For this reason,  although they are informative in a general way, the difference  between the school data and the enumeration data could result from  methodological differences as well as from any potential miscount in  the enumeration.  3.  The government of Hawaii stated that it agrees that a portion of the  sector grants given to the FAS might more effectively be used to  provide services to compact citizens living in the affected jurisdictions  and that the affected jurisdictions should provide input into the uses of  the grants. In response to other comments, we clarified our  recommendation regarding compact sector grants to not imply that the  use of sector grants to address migration concerns should be in the  affected jurisdictions. Our recommendation is to highlight the nexus  between sector grants and the issues that concern the FAS, compact  migrants and affected jurisdictions. We also report that the Federated  States of Micronesia has used sector grant funds for activities in the  affected jurisdiction of Guam.
section_title: Appendix XI: Comments from the Government of Guam
subsections: section_title: GAO Comments
paragraphs: compacts, it seems compact migrants are treated as if they are  citizens in that they have access to all federal and local services  unless specifically barred; therefore, reimbursement is justified for all  services rendered because they are provided on a nondiscriminatory  basis. We believe that our recommendation that Interior prepare  adequate cost guidance will help in determining compact impact  costs.
section_title: Appendix XII: Comments from the Government of the Commonwealth of the Northern Mariana Islands
section_title: Appendix XIII: Comments from the Government of Arkansas
subsections: section_title: GAO Comments
paragraphs: 1.  The Arkansas Department of Health expressed serious doubts about  the count of Arkansas migrants based on American Community  Survey data and asked that 2010 census data be used to create  figure 2 rather than the ACS data. We agree that there are  differences between the count based on the ACS data and that  based on 2010 decennial census data and have listed some of the  reasons for the differences in appendix IV. We have added text to the  report to more explicitly describe this appendix, the differences  between the data sets, and Arkansas’s concerns.
section_title: Appendix XIV: Comments from the Government of the Federated States of Micronesia
subsections: section_title: GAO Comments
paragraphs: 1.  The government of the FSM stated that our findings on compact  migrant participation in local economies are not conclusive as to the  net impact of migrants. The amended compacts' enabling legislation  does not require the inclusion of such data in affected jurisdictions’  impact reports and complete data on compact migrants’ contribution to  local economies does not exist. We provided available information on  labor market participation, taxes, consumption, and remittances.  2.  The government of the FSM stated the importance of clearly defining  a compact migrant for the purposes of enumeration and reporting  compact impact. As our report notes, Interior interprets the  legislation's definition of a qualified nonimmigrant—which generally  refers to a compact migrant living in an affected jurisdiction—as  including those migrants' children under the age of 18 who are born in  the United States; therefore, some U.S. citizens are included in the  count of migrants. We have used Interior’s definition for our estimates  of compact migrants and costs. As our report also notes, a number of  reporting local government agencies in affected jurisdictions do not  use the definition of compact migrants in the amended compacts'  enabling legislation, which affects the reliability of their reported  compact impact costs.  3.  The government of the FSM cited the fact that its citizens are eligible  to serve, and have served, in the armed forces and asked that we  include them in the count of migrants. We have obtained data from the  Department of Defense on persons born in the FAS who are on active  duty in the U.S. armed forces and have added this to the report.  4.  The government of the FSM referred to a statement in the draft report  that migrants pay into the Medicaid program but do not receive  benefits. This statement was in error and has been deleted from the  report.
section_title: Appendix XV: Comments from the Government of the Republic of the Marshall Islands
subsections: section_title: GAO Comments
paragraphs: 1.  The government of the Marshall Islands stated that not including  Marshallese citizen contributions to the economies of U.S. areas is a  serious flaw that undermines the credibility of claimed compact  impact costs. The Marshall Islands recommended that a  methodology be developed that determines “net” compact costs. The  amended compacts' enabling legislation does not require the  inclusion of such data in affected jurisdictions’ impact reports and  complete data on compact migrants’ contribution to local economies  does not exist. We provided available information on labor market  participation, taxes, consumption, and remittances.  2.  The government of the Marshall Islands asked that the participation  of Marshall Islands citizens in the armed forces of the United States  also be taken into account. We have obtained data from the  Department of Defense on persons born in the FAS who are on  active duty in the U.S. armed forces and have added this to the  report.  3.  The government of the Marshall Islands noted that a number of  Marshallese migrants attending public schools in the United States  are U.S. citizens and that, while they may legally be included for  purposes of compact impact costs, it questioned the inclusion of U.S.  citizens in determining impact costs. As our report notes, Interior  interprets the legislation’s definition of qualified nonimmigrant—which  generally refers to a compact migrant living in an affected  jurisdiction—as including those migrants’ children under the age of  18 who are born in the United States; therefore, some U.S. citizens  are included in the count of compact migrants. The Census ACS  tabulation we obtained for our estimates used Interior’s definition of a  compact migrant. The ACS interviews current residents— that is,  those in the house on the day of the interview who have been staying  there for more than 2 months, regardless of the individuals’ usual  residence.  4.  The government of the Marshall Islands stated that it would be  helpful to provide government leaders and decision makers with  comparative information on emigration, or migration rates from other  Pacific Island nations. This analysis was not part of the scope of our  audit.
5.  The government of the Marshall Islands stated that some of the data  for enumerations for Marshallese in the state of Hawaii may be  erroneous and overstated since some Marshallese only transit  through Hawaii for a short period before moving to the U.S. mainland  to accept employment. We do not have data to verify this assertion.  6.  The government of the Marshall Islands stated that although there is  discussion in the report regarding U.S.-Marshall Islands joint  management committee taking action to deal with compact impact  costs in affected jurisdictions in the United States, sector grants were  never designed or funded for that purpose. In response to the  government of the Marshall Islands and other comments, we clarified  our recommendation regarding compact sector grants to not imply  that the use of sector grants to address migration concerns should be  in the affected jurisdictions. We also note that, though we did not find  instances of the Marshall Islands using grant funds for activities in  affected jurisdictions, the FSM has done so in Guam.
section_title: Appendix XVI: Comments from the Government of the Republic of Palau
subsections: section_title: GAO Comments
paragraphs: 1.  The government of Palau noted that our draft report’s use of the term  “Micronesian” to refer to citizens of the Federated States of  Micronesia may be confusing, as Micronesian also has a larger  meaning related to persons living on multiple Pacific islands. We  have reviewed the report and now refer to the Federated States of  Micronesia as the FSM. In keeping with a commonly used definition,  we use the term “Micronesia” to refer to the three compact nations.  2.  The government of Palau stated that our report does not adequately  address the lack of information regarding "positive impact" from  compact migration. The amended compacts' enabling legislation  does not require the inclusion of such data in affected jurisdictions’  impact reports, and complete data on compact migrants’ contribution  to local economies does not exist. We provided available information  on labor market participation, taxes, consumption, and remittances.  3.  The government of Palau noted that FAS citizens serve in the U.S.  armed forces. We have obtained data from the Department of  Defense on persons born in the FAS who are on active duty in the  U.S. armed forces and have added this to the report.  4.  The government of Palau stated that most agencies have included  capital costs in their impact reporting, thus contributing to a gross  overstatement of the costs associated with migrants. However, in our  review, we did not find cases where agencies included such capital  costs in their impact reporting. Such costs could be legitimate and  addressed by future Interior guidelines.  5.  The government of Palau stated that our report does not adequately  explore the differences in the impact between the three FAS. Not all  local government agencies reported compact impact costs by FAS  country, and this assessment was not included in the scope of our  review. Complete data on compact migrants’ contribution to local  economies does not exist; however, we provided available  information on labor market participation, taxes, consumption, and  remittances. If Interior implements our recommendation to  disseminate adequate guidance on compact impact reporting to  affected jurisdictions, assessing impact by FAS country may be a  topic for Interior to address.
6.  The government of Palau stated that our estimate of Palauan  migrants is an accurate estimate, but that many Palauans emigrated  before the compacts came into effect and, while ethnically Palauan,  should not be considered in calculating the impact of FAS emigration.  However, the Census tabulation and survey we used in estimating  the number of Palauan compact migrants only included those who  arrived in U.S. areas after the date of the Palau compact. Those who  arrived in the United States prior to that date, and their children, are  not included in our estimate.  7.  The government of Palau noted that ethnic Palauans in the United  States may be U.S. citizens, permanent resident aliens (Green Card  holders), or members of the U.S. Armed Forces and their  dependents, as well as compact migrants. As our report notes,  Interior interprets the legislation’s definition of qualified  nonimmigrant—which generally refers to a compact migrant living in  an affected jurisdiction—as including those migrants’ children under  the age of 18 who are born in the United States; therefore, some  U.S. citizens are included in the count of migrants. However, we  agree with Palau’s comment that some persons who entered the  United States after the date of the compacts may be lawfully present  in U.S. areas under authorities other than those of Section 141 of the  compacts and have noted this in the report.
section_title: Appendix XVII: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, Emil Friberg, Jr., Assistant  Director; Keesha Egebrecht; Fang He; Reid Lowe; Mary Moutsos;  Michael Simon; Sonya Vartivarian; Adam Vogt; Greg Wilmoth; and  Monique Williams made key contributions to this report. Michael Derr,  Bob Lunsford, and Jena Sinkfield provided additional technical  assistance.