Pohnpei Constitution Article 11

The Government of Pohnpei shall have the authority to levy any tax and fee not prohibited under this Constitution.

Local governments may levy a surtax on a tax levied by the Government of Pohnpei. The surtax levied by the local governments shall not exceed twenty percent of the tax set by the Legislature, unless expressly authorized by statute. The Legislature may authorize the local governments to impose other taxes under such conditions as may be prescribed by statute. Local governments have the sole authority to levy business license fees.

Not less than thirty percent of all taxes received by the Government of Pohnpei from sources within Pohnpei shall be appropriated to local governments for development projects and operations identified in local plans. Local plans shall be adopted by statute only after extensive public hearings in the respective local jurisdictions. Such funds shall be apportioned by population on the basis of local citizenship.

The Legislature shall provide by statute for the organization of the Pohnpei Treasury. The Pohnpei Treasury shall contain a General Fund and special funds established by law. All revenues of the Government of Pohnpei shall be deposited into the General Fund or a special fund, as provided by law.

The obligation for the payment of money and the withdrawal of money from Pohnpei Treasury may only be made in accordance with law.

(1) There shall be an Auditor appointed by the Governor with the approval of the Legislature by affirmative vote of the majority of the members, without regard to vacancies, to serve for a term of four years and until his successor is appointed and confirmed. Within thirty days before the end of each four-year term, the Auditor may be removed by affirmative vote of two-thirds of the members of the Legislature, without regard to vacancies.

(2) The Auditor shall be responsible for conducting audits of all financial transactions and of all accounts kept by or for all departments, offices, agencies, and instrumentalities of the Government of Pohnpei and of the local governments. All such accounts shall be audited at least once every two years. All financial statements issued by Government accounting officers shall require the certification of their accuracy by the Auditor.

(3) The Auditor shall annually report his findings and recommendations to the Governor and the Legislature. The Auditor shall make such additional reports and provide such additional information as he may deem appropriate and as the Legislature may require by law.

(4) The Auditor shall require the establishment of accounting systems that will ensure strict financial accountability.

(5) The Auditor may employ his own staff and may contract for professional accounting services and other services that he may deem necessary.

(6) The Auditor shall annually prepare the budget which will be submitted to the Legislature through the Governor. The Governor may submit his comments, but he may not revise or reduce it.

Within the time prescribed by statute, the Governor shall annually submit to the Legislature a report identifying the revenues and funds anticipated to be available to the Government of Pohnpei for the forthcoming fiscal year, as well as such other fiscal information as the Legislature may require by law.

The Governor shall prepare a budget for the forthcoming fiscal year for the operations of all Pohnpei Government agencies, except the Auditor, and the legislative and judicial branches, and for other purposes. The Governor shall submit the budget to the Legislature within the time prescribed by statute. The Governor shall also receive and may comment on the budget of the Auditor, the Legislature, and the Judiciary, which he shall promptly submit to the Legislature. Budgets shall be in such form and shall provide such information as may be required by law.

(1) After receiving the report of anticipated revenues and other funds, and after receiving the budget of all Pohnpei Government agencies, and taking into account the requirements for funding capital improvements, development projects, and assistance to local governments, the Legislature shall enact a comprehensive operations budget authorization law for the forthcoming fiscal year. Such law may subsequently be amended.

(2) Except as required by a state of emergency declared by the Governor in accordance with this Constitution, no appropriation for operations of any government agency may be made except in accordance with the comprehensive operations budget authorization law.

Provisions shall be made by law to control the rate of expenditures, when funds appear insufficient to meet anticipated expenditures for the fiscal year.

The Government of Pohnpei may not borrow money on public credit except as authorized by statute for economic development and the construction and major repair of public facilities. Every statute authorizing the borrowing of money on the public credit shall identify the source of adequate funds which shall be dedicated to the repayment of such obligations.