Reaction to the Governor’s directive for ASG audits by TAO

October 27, 2021 News Leave a reply
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A memo issued early this month by Governor Lemanu Peleti Mauga directed the Territorial Audit Office to audit all American Samoa Government accounts, records, and books.

What was not clear is the kind of audit that will be performed.

Larson and Company, PC out of Spanish Fork, Utah, is the government’s external auditors.

As explained by an experienced accountant who spoke with KHJ News, external audits are conducted by unbiased third parties and must comply with Generally Accepted Accounting Principles. External audits are more official than internal audits and are often used to demonstrate the accuracy and reliability of an organization’s financial and operational records.

Typically, an entity like the Territorial Audit Office performs internal audits.

Internal audits are conducted by a person or a team within an organization and can help officials get an accurate picture of an organization’s fiscal and operational fitness and may focus on the following types of investigations: Financial accounting and reporting; policy and legal compliance; effectiveness of internal controls and current procedures; or operations concerns.

• Financial audits focus specifically on an organization’s financial status. Auditors work to verify records, including expenses, revenue, investments and assets.
• Compliance audits are used to determine if organizations are compliant with internal and external regulations that may include government standards, local regulations, and territorial and federal laws. Organizations need to conduct compliance audits to maintain safe and fair working conditions, ensure product quality and minimize risks.
• During an agreed-upon procedures audit, the parties requesting the audit and the party or parties conducting the audit agree to certain terms. Often, procedures audits are used to evaluate a specific process or procedure.
• Operational audits are designed to evaluate and analyze an organization’s operations, including policies, procedures, goals, philosophies, and culture. Usually conducted internally, operational audits seek to identify areas of inefficiencies and make recommendations to reduce costs, streamline processes and improve policies.

Internal auditors can be of great value to state and local governments in a variety of ways, says our account source.  They commonly assist management in monitoring the design and proper functioning of internal control policies and procedures. In this capacity, internal auditors themselves function as an additional level of control and so help to improve the government’s overall control environment.

According to Chapter 4 of the American Samoa Code Annotated, “The Territorial Auditor must be a person experienced and competent in governmental auditing, financial management, or government operations and budgeting. The Territorial Auditor shall be a certified public accountant or a certified internal auditor holding a current certificate from any state of the United States.”

An administration bill that downgraded the requirements to be the territorial Auditor specifically the one stating that the appointee must be a US certified public accountant, was approved by the House and rejected by the Senate .

The fact that Acting Territorial Auditor Tofa Sualauvi Su’a , who will head the audits ordered by the Governor is not a US CPA, is likely to call into question the integrity of the audits.