The United States Interior Department's Insular Affairs director, Nikolao Pula, is to meet Marshall Islands government leaders in Honolulu this week.
This comes after ten people in the Marshalls have been charged with theft of more than half a million US dollars in federal grants.
Last week, the U.S. government demanded to be involved in the ongoing investigation process of the missing money.
Mr Pula says the U.S. can withhold grant funding and under the Compact of Free Association can ask for financial records that might relate to misuse of federal grants.
Our correspondent in the Marshall Islands, Giff Johnson, reports.
"The US government has upped the ante, has gotten more involved and put the Marshall islands on notice that it wants more information, more engagement and letting the Marshall Islands know that it if does not get it there could be other consequences."