Our review was conducted from June 1983 to April 1984 at each territorial government and at numerous federal agencies in Washington, D.C., including the Departments of Interior, State, We also met with White House officials, Treasury, and Defense. congressional representatives and committee staff responsible for oversight and administration of the territories. We interviewed key territorial leaders, including the Governors of each territory and the Presidents of each Micronesian government. We met with key executive branch officials involved in administration and policy-making for the territories and insular areas. We also met with the U.S. Ambassador for the Micronesian Status Negotiations to discuss the terms and potential impact of the Compact of Free Association on federalterritorial relations. We also talked with government and private sector representatives in each territory to gain a per- spective on how U.S. policy and laws affect economic development. Our review was conducted in accordance with generally accepted government audit standards. We obtained the views and comments ernments Islands, report. VII. of the Department of Interior and State and the govof Puerto Rico, American Samoa, Guam, the Virgin and the Northern Mariana Islands on a draft of this These comments are included in appendixes I through This report discusses the nature of the problems, real and perceived, with current U.S. policy, and U.S. territorial rela- tions. We did not attempt to determine what U.S. policy should be, nor did we make an in-depth analysis and evaluation of all the issues and problems of the territories and insular areas. 5000210