Fiscal Year 2017 Annual Report and Audit Completed

The Trust Fund Committee of the Trust Fund for the People of
the Federated States of Micronesia (the Fund) approved the Fiscal Year 2017 (FY17) Annual Report
on March 26th. The FY17 Audited Financial Statements were completed by the independent auditor,
Baker Tilly Virchow Krause, LLP, on March 26th and presented to the Committee on the same date. Both
reports were released to the respective governments.
The Fund’s restricted fiduciary net position value increased 21.0% to $564,970,738 for FY17 from
$466,938,730 for FY16. The increase was primarily due to contributions from the United States
government ($29,489,680) and gross investment income from investments ($69,270,387). There was
a change in net position of $98,032,008.
The Fund had a weighted annual rate of return of 13.8%, following a gain of 9.7% for FY16. Overall, on a
performance basis, net of fees, the Fund has had a 13.4% return since inception, below the
benchmark of 13.9%.
Total investment and administrative expenses decreased to 0.85% of restricted fiduciary net position
in FY17 from 1.01% in FY16. Investment expenses increased in dollar value but decreased to 0.82%
of restricted fiduciary net position from 0.97% in FY16. Administrative expenses decreased in dollar
value and as a percent of restricted fiduciary net position to 0.03% from 0.04%.
The FY17 audit performed by Baker Tilly was completed on time and according to U.S Generally
Accepted Auditing Standards and Generally Accepted Government Auditing Standards issued by the
Comptroller General of the United States. There were no audit findings.
The Trust Fund for the People of the Federated States of Micronesia was established by the Compact
of Free Association, as Amended, as codified in the Compact of Free Association Amendments Act of
2003 (U.S. Public Law 108-188, December 17, 2003). The Trust Fund’s purpose is to contribute to
the economic advancement and long-term budgetary self-reliance of the FSM by providing a source of
revenue for the government and the people of the Federated States of Micronesia when certain grants
under the Amended Compact of Free Association expire in 2023.