DRAFT CSC, Title 28.  Finance
 
CHAPTER 1
Financial Management Act

1001.  Short title.
1002.  Purpose.
1003.  The Treasury.
1004.  The General Fund of the State.
1005.  Obligation.
1006.  Documentary evidence required to record an obligation.
1007.  Unexpended funds to lapse.
1008.  Criminal penalties for wrongful obligation of funds.
1009.  Criminal penalties for wrongful expenditure of funds.
1010.  State may sue for recovery or preservation of funds.
1011.  Job protection for public servants who disclose violations of this Chapter.

      1001.  Short title.
     This Act Chapter shall be known as the Truk "Chuuk State Financial Management Act."

Source:  TSL 5-44, 1, modified.

      1002.  Purpose.
     It is the purpose of this Act Chapter is to ensure that public funds are only used or promised in a manner provided by law, and to achieve this purpose, criminal penalties are imposed, civil suits are authorized, and job protections are provided for public employees who cooperate with or who disclose official mismanagement of funds.

Source:  TSL  5-44, 2, modified.

      1003.  The Treasury.
     The Treasury is all places and facilities, including banks, bank accounts, and other bank issued instruments of deposit, for receiving, storing, and disbursing state funds which are under the control of the Treasurer Director of the Treasury.

Source:  TSL 5-44, 3, modified.

      1004.  The General Fund of the State.
 
     (1)  The General Fund of the State shall be an account or accounts in the State Treasury maintained and controlled under the authority of the State Treasurer Director of the Treasury.

     (2)  Public money raised or received by the State, from whatever source derived, including but not limited to: all grants and assistance from foreign aid, the United States of America, all state tax and revenue laws, receipts from revenue sharing with the national government, fines, fees, interest loans to the State, gifts or rents, unless otherwise provided by law, shall be deposited into the General Fund of the State.  The Treasurer Director of the Treasury shall generate forms for the transmission of revenue from state agencies to ensure that internal revenue is deposited in a timely manner, and to provide checks on agencies which may be delinquent in transmittal.

Source:  TSL 5-44, 4, modified.

      1005.  Obligation.

     (1)  An obligation for the expenditure of State funds exists when there is a duty to withdraw money at some time in the future, from any account of the General Fund of the State.  Every right of expenditure from the General Fund shall be by obligation of appropriated sums.

     (2)  The Treasurer shall record all State obligations for the payment of money, and shall establish accounts and preserve sufficient funds for the payment of every obligation lawfully made.

Source:  TSL 5-44, 5.

      1006.  Documentary evidence required to record an obligation.

     (1)  The Treasurer shall not record or assent to any claim that an obligation exists unless it is supported by documentary evidence, and is for the purpose specified by an appropriation.  Only an allottee or his designee may offer evidence of an obligation.

     (2)  Evidence of an obligation is:

     (a)  an agreement in writing, between the allottee of the appropriation, and another party, for a purpose authorized by the law which appropriated the funds to be obligated.  The agreement must have been executed during the period of availability of the fund.  It may be for the purchase and delivery of specific goods, or the lease or purchase of real property, or work or services to be performed, or to lend money, in which case the agreement shall show the amount of the loan and the terms of repayment;

     (b)  a grant or subsidy payable from an appropriation which requires direct payment to a recipient upon submission of a plan or according to a formula prescribed by law; or

     (c)  any other legal liability of the state against an appropriation or funds legally available therefore.

Source:  TSL 5-44, 6.

      1007.  Unexpended funds to lapse.
     All sums of money which are appropriated for any fiscal period, and which are not expended during the period, shall lapse and may not be issued, applied or expended for any purpose, unless a valid obligation has been made before the expiration of the fiscal period of the appropriation, unless otherwise provided by law.

Source:  TSL 5-44, 7.  

      1008.  Criminal penalties for wrongful obligation of funds.

     (1)  No officer or employee of the State, or allottee of a State appropriation shall obligate or authorize or order anyone to obligate funds of the General Fund.

     (a)  unless at the same time there are funds appropriated and available for obligation; and

     (b)  unless the obligation is for the purpose specified by the appropriation.

     (2)  Violation of this Section shall be a crime punishable by imprisonment of not more than two years or a fine of not more than $2,500.00, or both.

Source:  TSL 5-44, 8.

      1009.  Criminal penalties for wrongful expenditures of funds.

     (1)  No officer or employee of the State shall make or authorize any expenditure of money from the General Fund in advance of the appropriation and availability of funds, or in excess of the amount appropriated, or for another purpose than that specified in an appropriation.

     (2)  Violation of this Section shall be a State crime, punishable, upon conviction by imprisonment for not more than three years or a fine of not more than $5,000.00 or both.

Source:  TSL 5-44, 9.

      1010.  State may sue for recovery or preservation of funds.
     A cause of action shall exist in favor of the State for the recovery or preservation of funds expended or in danger of being expended in violation of this act Chapter.  The State Attorney General or any citizen of the Federated States of Micronesia and resident of the State, acting on behalf of the State as a private attorney general, may proceed in State court for recovery of sums lost or in danger of loss to their lawfully dedicated purpose, or for a court order commanding compliance with this act Chapter, or both.  The court shall consider the purposes and possible improper motives of a person claiming to act as a private attorney general and may dismiss the complaint without prejudice upon a finding of a lack of adversariness.  The court may give judgment to a prevailing private party for costs and reasonable attorney's fees.

Source:  TSL 5-44, 10, modified.
 
      1011.  Job protection for public servants who disclose violations of this Chapter.
     Any disciplinary, negative, or punitive job action against an employee of the State who:

     (1)  Has in good faith disclosed to the prosecutor or Attorney General an actual or attempted violation of this act Chapter; or

     (2)  Who had refused to participate in an actual or attempted violation but was unable to report prior to the imposition of disciplinary, negative, or punitive job action, shall be preemptively in retaliation against such employee;

In any appeal for relief from retaliation, the burden shall be upon the government to show that the job action was in response to a genuine failure of performance of lawful duties.  Such showing must be made by clear and convincing evidence.  An employee who prevails in an appeal for relief from a retaliatory job action shall be granted all back pay and benefits lost, if there were any, and all costs and reasonable attorney fees.  The protection of the presumption of retaliation shall be afforded the employee for four years after the disclosure or refusal.

Source:  TSL 5-44, 11, modified.
                                                                                                                                                                                                                                                                                                           
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