The outcome of a Senate Health Committee hearing with Deputy Treasurer Tina Onosai Vaa and CEO of the LBJ Hospital Taufetee John Faumuina Jr. was that the Senate will introduce a bill to write off a $5 million loan that Treasury believes the hospital owes ASG.
Treasurer Ueligitone Tonumaipe’a had been subpoenaed to the hearing however he left the island Monday, apparently for medical reasons.
Treasury staff say that Tonumaipe’a was absent from work all of last week.
The $5 million which ASG gave LBJ in 2004 came from Hurricane Val insurance monies.
Senators wondered why it was called a loan when the money was part of the Hurricane Val proceeds and ASG didn’t have to pay any money for it.
Vaa explained that the $5 million is still on ASG’s books and auditors have advised that it can only be written off if the Fono approves a bill to that effect.
To that end Senator Laolagi Vaeao confirmed that he will introduce a bill to write off the $5 million for LBJ.
Led by Senate Health Committee Chairman Senator Tuaolo Fruean, senators present at the hearing said the hospital should not have to pay the $5 million and Treasury shouldn’t withhold money from the hospital on the claim that LBJ still owes on this “loan”.
Tuaolo said his interest in holding the hearing was to find a solution to the hospital’s financial problems, because he said it’s a sad situation if the hospital is out of medication and other necessities, leading to deaths.
LBJ CEO Taufetee said they are at odds with Treasury on the amount of money ASG owes the hospital in monthly subsidies, and the 2% wage tax.
For example while LBJ put the IOU for the monthly subsidy at $1.1 million, Treasury says the outstanding amount is $952,000.
The CEO confirmed that the hospital is short of medical supplies because vendors are refusing to releases orders unless they are paid cash up front.
He said freight forwarders are also withholding shipments until the hospital clears old debts.
Regarding Medicaid/Medicare payments for the hospital, the deputy treasurer initially said that as soon as Treasury receives funds for LBJ, a check is cut and there’s no hold up in payments.
But when Senator Tuaolo said he thought Treasury only released part of a $1.6 million payment and withheld the rest, Va’a conceded:
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She said the Medicare money was held for only 1-2 days then it was released to the hospital.
Also questioned was the 2% wage tax earmarked for the hospital which was approved in Fiscal Year 2012.
According to a report that Vaa distributed, ASG collected $3.9 million from the wage tax in the first year, $3.2 million in FY2013, $4.4 million in Fiscal Year 2014 and $3 million in FY2015.
The report showed that ASG was behind on the 2% wage tax payments for the hospital by $5.6 million.
Senators were emphatic that Treasury was breaking the law by not paying all of the money collected from the wage tax to LBJ as the law specified.
On another issue, senators pressed as to why federal funds for the hospital are not paid directly to LBJ , instead of going through Treasury.
Taufetee said while this is preferable and was done before, he doesn’t want to bite the hand that feeds LBJ.
He said he treads carefully because Treasury controls the purse strings.
