Treasurer Malemo Tausaga and Budget Director Cathy Saelua, didnt get off lightly in the opening hearing in the proposed Fiscal Year 2022 budget for the American Samoa Government.
The main questions they were asked is why they’ve spent surplus funds without seeking Fono approval, how much the salary increases for Asg will cost and how they are funded, and whether the projected $$110 million in local revenues is realistic given the impact of the Covid pandemic on the local economy and the collections from previous years have never surpassed $99 million.
Attorney General Fainuulelei Ala’ilima Utu was also scheduled to testify however he was a no show and there was no explanation as to why.
The joint chairmen of the budget hearings Senator Utu Sila Poasa and Vailiuama Steve Leasiolagi said before they get down to reviewing the budget, the Fono wanted to clear up some issues.
House Speaker Savali Talavou Ale stated that the spending of surplus funds has been a point of contention between the Fono and the executive branch in the past.
The Fono’s position is that any excess funds at the end of the fiscal year must come to the Fono to be appropriated; the executive branch cannot spend such funds without the Fono’s approval.
The Speaker said the Fono also needed to discuss the matter of agencies and departments whose directors have not been submitted to the Fono for confirmation. He pointed out the Fono had written to the Governor about this some time ago without any resolution.
Asked about the FY 2020 audit for ASG, Treasurer Malemo Tausaga said the audit has been completed and there was one finding, relating to the Territorial Bank of American Samoa.
Rep Larry Sanitoa pointed out however that the audit also had a finding relating to LBJ Hospital finances.
The treasurer reported that the FY2020 audit for ASG has been completed and it shows a surplus of $6.8 million. This is the balance of accumulated surplus funds from FY2019 minus the deficits which were carried forward from previous years up to fhe end of the last fiscal year.
Governor Lemanu Peleti Mauga had said in his response to the Government Accountability Office report about ASG’s debt load that a surplus of $18 million was anticipated at the end of this fiscal year.
Senator Magalei Logovii pressed the witnesses to explain where the $18 million surplus is.
The Treasurer and Budget Director Saelua said the money is used for government operations but is recorded in financial statements. Magalei emphasized thst under budget law this money must be appropriated by the Fono through a supplemental budget.
The Speaker reminded that the Fono had approved a supplemental bill which the former administration had submitted using surplus funds.
The appropriated funds were used to build the Territorial Correctional Facility wall, complete the Territorial Administration on Aging Office in Tafuna and build seawalls.
Senator Togiola Tulafono asked for a report detailing the surplus funds for each each and what the funds were used for.
Senate President Tuaolo Fruean reiterated that only the Fono can appropriate government funds and its not right for the executive branch to spend the surplus money however it pleases. He said the Fono also has needs, and mentioned Fono pay raises, the same topic he spoke about at the opening of the Fono’s second regular session.
Treasurer Malemo apologized for the oversight and reminded that this is a new administration but they will heed the Fono’s concerns.
Regarding the shortfall in local revenues, Malemo said they will beef up collection of business and individual taxes as well as delinquent fees and charges from Industrial Park tenants. He was optimistic that by the end of the fiscal year, the shortfall will be down to $2 million.
On the funding source for the ASG salary increases, Budget Director Saelua
said the savings from each department and agency’s budget is funding salary increases of their staff.
She explained that the savings are from unused travel due to the closing of the borders, and also unfilled vacancies.
Her explanation is different from one offered by Governor Lemanu in a press release that the salary increases for the remainder of the current fiscal year are paid with funds from Special Programs, while the teacher salary hikes are covered by federal grants.
