A federal audit says U.S.-backed plans to build and repair schools and hospitals across Micronesia are running into a very basic snag: there simply are not enough people to do the work. Years of out-migration and pandemic shocks have thinned local construction and medical workforces, leaving projects delayed or reliant on costly outside contractors. With hundreds of millions of dollars already set aside for education and health facilities, officials warn that money alone will not finish buildings without a trained local workforce to actually pour the concrete and staff the wards.
According to a report by the U.S. Government Accountability Office, the Federated States of Micronesia’s population fell by about 26% between the 2010 and 2023 censuses, while the Republic of the Marshall Islands lost roughly 20% between 2011 and 2021. The GAO also found that Palau, which has been more demographically stable, saw tourism collapse during the pandemic and recorded an 18% drop in gross domestic product from 2019 to 2022. Those hits have shrunk the pool of skilled workers and pushed up the price of public services. The audit, completed after field work in 2025, links these demographic shifts to construction delays and rising project costs.
As reported by Honolulu Civil Beat, Rep. Ed Case, co-chair of the Congressional Pacific Islands Caucus, said the report “confirms the need for independent oversight of the compacts.” Civil Beat notes that migration from Micronesia to Hawaiʻi and other U.S. states for health care, education and jobs already puts pressure on local hospitals and schools, and lawmakers are watching whether oversight problems could ripple into future appropriations.
What Washington promised
The amended compacts signed in 2023 commit roughly $6.5 billion in U.S. assistance through 2043, funding aimed at trust funds, health care, education and infrastructure, the Department of the Interior says. The long-term package is supposed to stabilize essential services while preserving strategic ties in the Pacific. Auditors and island officials, however, say that given the size of the investment, the hard part now is execution and local capacity, not just the headline dollar figure.
Why projects are getting delayed
The GAO report says shortages of domestic skilled labor, including carpenters, masons, electricians and medical technicians, have forced governments to hire nonlocal contractors or import workers from countries such as the Philippines and Fiji. That approach keeps projects moving but drives up costs and stretches out timelines. GAO also flagged persistent reporting problems: as of Dec. 30, 2025, the FSM, RMI and Palau had not filed required single-audit reports for fiscal year 2024 and some audits for earlier years were hundreds of days late. Those gaps make it harder for U.S. agencies and Congress to see whether compact funds are actually reaching the classrooms, clinics and outer-island projects they were meant to support.
What it means for Hawaiʻi
For Honolulu and other parts of Hawaiʻi with long-standing Micronesian communities, the shortages back home translate into more people traveling to Oʻahu for medical care, schooling and work, which can mean additional strain on local hospitals and schools. Civil Beat reports that these migration patterns function as both symptom and cause: when services at home deteriorate, more residents leave, and that exodus in turn deepens the labor gaps that stalled projects in the first place. Community groups and state agencies say federal spending plans need to build in workforce development, or the new bricks and mortar will not translate into lasting improvements.
Oversight questions and next steps
Congressional records note that the Compact of Free Association Amendments Act of 2024 requires an Interagency Group and annual reporting to Congress to coordinate implementation, according to Congress.gov. The Department of the Interior has said it is working to set up the required bodies and distribute initial fiscal-year funding. Lawmakers and auditors have urged stronger staffing, clearer guidance and expanded local training programs so compact dollars ultimately produce finished schools and functioning clinics rather than unfinished shells baking in the tropical sun.
