The governors of the four Federated States of Micronesia say there's a risk the United States could cut off funding under its free association agreement, if the FSM doesn't complete audits for the last three years by June.
The governors of Pohnpei, Yap, Kosrae and Chuuk have been meeting the president in Palikir to discuss how to improve the budget process.
In a joint statement, they say additional sources of funding are needed to improve infrastructure, besides the funds under the Compact of Free Association with the United States.
The FSM already receives aid from China, Japan, and the European Union.
The telecom agency plans to borrow up to 15 million US dollars to link Pohnpei with a submarine fibre optic cable to Guam and Majuro.
The governors call for an assessment of the long-term viability of fuel farms under a supply deal with Mobil Oil Micronesia.