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Interior Department has a mandate to assist the Virgin Islands and other Insular Areas under the American Flag.
by Carmelo Rivera

     Despite the recent hullabaloo and outcry from a few legislators and talk-show political pundits about the implications of the memorandum of understanding signed by Secretary Babbitt and Governor Turnbull, the fact is that the Interior Department has a longstanding mandate from the US Congress to guide and assist the territory in finding solutions to its economic problems. The following background information regarding the role of the DOI and its Insular Affairs Office should shed some new light on the MOU and the unique status of insulars areas. Most of this information was taken from the DOI website:
     What is the history of the Department of the Interior?
     In 1789 Congress created three Executive Departments: State or Foreign Affairs, Treasury and War. It also provided for an Attorney General and a Postmaster General. Congress apportioned domestic matters among these departments.
     The idea of setting up a separate department to handle domestic matters was put forward on numerous occasions. It wasn't until March 3, 1849, the last day of the 30th Congress, that a bill was passed to create the Department of the Interior to take charge of the Nation's internal affairs.
     The Interior Department had a wide range of responsibilities entrusted to it: the construction of the national capital's water system, the colonization of freed slaves in Haiti, exploration of western wilderness, oversight of the District of Columbia jail, regulation of territorial governments, management of hospitals and universities, management of public parks, the basic responsibilities for Indians, public lands, patents, and pensions. In one way or another all of these had to do with the internal development of the nation or the welfare of its people.
     Office of Insular Affairs
     The Office of Insular Affairs (OIA) carries out the Secretary of the Interior's responsibilities for the insular areas such as the Virgin Islands. These responsibilities include providing the insular areas with financial assistance for government operations and needed infrastructure, and providing technical assistance and advisory services. This assistance is a recognition that local tax revenues and other Federal programs are insufficient to meet the unique needs of the insular areas. The Secretary's responsibilities also require coordination with other Federal agencies to develop insular policy positions and to enunciate the Administration's position in discussions with the Congress and the insular governments. Besides the Virgin Islands, other insular areas include American Samoa, Guam, Commonwealth of the Northern Mariana Islands, Navassa Island, Palmyra Atoll, Wake Atoll (in part), Marshall Islands, Federated States of Micronesia, and Palau.
     Mission of the Office of Insular Affairs
     The Office of Insular Affairs (OIA) mission is to assist the islands in developing more efficient and effective government by providing financial and technical assistance, and to help manage Federal-island relations by promoting appropriate Federal policies.
     The mission is derived from Organic Acts, Executive Orders, negotiated agreements ratified in law, and other legislation enacted to authorize programs and funding. These acts and orders also enunciate the fundamental relationship between the Federal Government and each of the insular areas.
     General Goals:
     Goal 1: Improve Infrastructure
     Long-term goal: By September 30, 2002, all insular governments will be implementing multi-year capital plans for OIA-funded infrastructure that are based on objective criteria, identifying operations and maintenance needs, and specifically addressing user fees or other self-financing mechanisms, when appropriate. Performance Measures: The primary measure will be the completion of plans and the degree to which the plans are successfully implemented. Because improvements to maintenance are fundamental to the success of this goal, changes in insular government budgets for maintenance activities also will be tracked.
     Goal 2: Improve Governmental Systems and Services
     Long-term goal: Work with each insular government to develop and implement plans to improve financial management. Performance Measures: A key measure of success is the performance of the insular governments in producing timely and auditable financial statements. Annual objectives for the completion of plans and the percentage of implementation of each management control plan will be measured. The number of employees obtaining certified status in financial management in each government will be monitored.
     Long-term goal: Work with each insular government to identify problems and develop and implement long-term plans to improve expertise, operating efficiency and institutional capacity in health care, education, public safety, economic development, statistics, transportation and telecommunications. Performance Measures: The OIA, with assistance from the insular governments and the Bureau of Census, collects and publishes a variety of data. In consultation with the insular governments, a matrix of key indicators of management and service improvements (economic, financial, demographic, health care, education, public safety, economic development, statistics, and telecommunications) for each insular government will be developed and tracked annually.
     Long-term goal: For those governments receiving an operating grant or subsidy, include elements in the technical assistance plan that address the need to attain greater self-sufficiency by increasing local revenues and controlling government expenditures. Performance Measure: The changing ratio of Federal to local revenues against pre-determined benchmarks will be tracked.
     Goal 3: Improve Governmental Relations
     Long-term goal: Improve Federal-insular communications to facilitate the resolution of insular areas problems. Performance Measure: Key insular officials will be surveyed, both at the policy and working level. The survey will be developed during 1998 in consultation with the insular governments. It will identify problems in the relationships and suggest ways to improve relations and solve fundamental Federal-insular concerns.
     Goal 4: Manage Special Problems
     Long-term goal: Reduce the impact of extraordinary problems occurring in the insular areas. Performance Measures: The OIA will establish specific time frames in plans developed to address extraordinary problems and track percentage completion against pre-determined milestones. Also, as appropriate, specific measures for each plan will be developed to deal with these problems. Such plans and measures already have been developed for the brown tree snake control program and the labor, immigration, and law enforcement initiative for the Commonwealth of the Northern Mariana Islands (CNMI).
     Strategies for Achieving Goals
     The mission and goals for the organization will be achieved through the implementation of three Office of Insular Affairs business processes:
     1. Policy Development: OIA communicates with the insular governments, Congress, other Federal agencies, and various other stakeholders in the public and private sector. Concerns and more serious problems that demand resolution are identified. If problems cannot be resolved through internal technical and financial assistance activities, OIA brings the issue to the attention of other Federal agencies to help coordinate an interagency response. If necessary, new policy initiatives are developed and implemented by the Administration under existing authority. In other cases, concerns are reported to Congress with recommendations, sometimes in the form of legislative proposals.
     2. Financial Assistance: One of the most fundamental problems faced by the insular areas is a lack of economic development sufficient to generate adequate government revenues or to support a general standard of living comparable to the 50 States. The Office of Insular Affairs is authorized and directed by Congress to provide financial assistance to help support local government services and to construct basic infrastructure. This support is provided in the form of grants and mandated direct assistance. As an integral part of the financial assistance process, annual budgets are developed for insular programs. The OIA manages the funds under its direct control, monitors funds provided to governments and other users, and provides assistance to the insular governments to improve their management controls and accountability.
     3. Technical Assistance: The OIA is authorized by Congress to provide technical assistance in all areas in which the insular governments operate. This broad authority allows the office to help the insular governments address specific problems by tapping a wide range of expertise from the private sector and the Federal Government. The technical assistance process begins with input from one or more of the insular governments identifying a problem or technical assistance need. The issue is then addressed through contracted technical assistance providers (including reimbursable agreements with other Federal agencies) or a grant to the affected government to find private expertise. The OIA's technical assistance staff develops the scope of work for each technical assistance arrangement and monitors the use of funds and the accomplishment of plans and stated objectives.
     This process has been evolving from its original emphasis on direct technical assistance by OIA employees, combined with application-based grant assistance. The evolving process still uses limited grant and direct assistance, but now relies heavily on OIA funding of major technical assistance providers who can help insular officials and the OIA identify problems, develop long-range programs, and react quickly to specific concerns as they arise. Beginning in fiscal year 1998, a much greater emphasis will be placed on working proactively with each insular government to identify major problems and priorities in advance and to mutually develop strategies and plans to address problems.
     Specific Strategies
      Meet yearly with the seven insular governments and discuss problems, priorities and technical needs and develop strategies and financial assistance plans to meet those needs.
      Provide broad-based operational, technical and planning assistance to the areas and identify priorities where funds can best be applied.
      Work closely with other Federal agencies to coordinate assistance, avoid duplication, and tap other resources of the Federal Government.
      Invest in capital infrastructure in insular areas.
      Encourage appropriate user fees to emphasize the necessity of developing other sources of revenue to pay for capital needs.
      Work to institutionalize operations and maintenance capacity and sound practices of the insular areas.
      Work with the areas and the USDA graduate school to identify the major systems and control problems that are a hindrance to effective financial management.
      Focus on greater technical assistance to promote government efficiency and to increase local revenues.
      Carry out the OIA customer service plan to develop networks and improve relationships.
      Be the advocate of the areas in developing special programs or policies to deal with extraordinary problems in the insular areas.
     External Factors
     Limited Control: The OIA is a very small office that provides technical and financial assistance and policy recommendations. It has limited capability to carry out plans or policies without cooperation from the insular governments and other agencies or branches of the Federal Government. Successful implementation of our strategic plan relies heavily on others to actively participate in the establishment of goals and the development and implementation of action plans.
     Disasters: The single greatest external influence on the insular areas is disasters, such as typhoons, hurricanes, floods and earthquakes. Overnight, an insular government can go from being highly self-sufficient to highly dependent. There have been instances where the amount of Federal assistance required to help rebuild from a single disaster has been significantly greater than a full year's total local revenues.
     Influences of a Global Economy: Several of the insular areas (Guam, CNMI, Palau) have stronger economic ties to Asia than they do to the United States. A strong upturn or downturn in Asian economies can result in tremendous economic impacts on these insular areas. The Virgin Islands can be dramatically affected by economic changes in the Caribbean and by U.S. policies designed to affect other Caribbean nations or the much larger Commonwealth of Puerto Rico. American Samoa is highly dependent on a single industry, tuna canning. Any economic or policy change that affects the tuna industry will dramatically affect American Samoa.
     U.S. Defense Interests: Many of the insular areas serve as a perimeter line of defense for the United States. The United States has paid for defense rights in the freely associated States and the Northern Mariana Islands. Large military installations are maintained in Guam and the Marshall Islands. Major security decisions or events can have a dramatic impact on the insular areas.
     For more information on DOI visit their website:

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