Cost containment measures must begin now says Gov
Unbudgeted personnel action will be rescinded, unbudgeted positions will be suspended, and a freeze on annual increments and overtime are being imposed. These are some of the “cost containment measures”, Gov. Lolo Matalasi Moliga put into effect as of last Friday, through a memo. They are meant to last through the current fiscal year, unless amended, based on ASG’s poor financial condition.
According to the memo, the measure is “an attempt to aggressively respond to the deteriorating financial health of the American Samoa Government caused by the steady proliferation in the amount of legal liabilities, prior years’ operating deficits, increasing accumulated outstanding obligations and many executed unbudgeted expenditures for the current fiscal year.”
Not yet determined or made clear by the memo is the official financial status of ASG following the first quarter of current fiscal year 2013, which ended Dec. 31 — or where ASG stood at the end of FY 2012. Also not yet determined is the total number of unbudgeted positions and personnel actions, as directors and acting directors have been told to provide these reports to the Governor’s Office.
According to the memo, the Fono, Judicial Branch and ASG semi-autonomous agencies are exempted from this policy. “Although the independence of the Authorities is honored, it behooves the Authorities to adopt the spirit of the declared cost containment measures with the hope that accrued savings will be reflected in reduced rates charged for their respective services,” the memo said.
The memo states that all personnel actions — which include new hires, reclassifications, and promotions, all personal service contracts irrespective of type, which were implemented in the last six (6) months but not incorporated or supported by the approved budget for the current and previous fiscal year, “will be rescinded forthwith with reversion to the original status prior to the executed personnel action.”
For unbudgeted positions, the memo states that existing positions without approved funding will be suspended without pay until a funding source is secured through an appropriation by the Fono, “if it is deemed that these positions are critical to the needs of the American Samoa Government.”
Lolo said in the memo that it “would not be legal to use funds that were earmarked for other activities to meet these unbudgeted obligations.”
“While this decision will adversely affect some individuals, the overall fate of the government is in jeopardy if bold actions are not taken to comply with existing laws and regulations,” said Lolo. “It is imperative that unbudgeted spending must be stopped to avert unnecessary exposure to financial crisis and endanger the future of the majority of the residents of American Samoa.”
As to annual increments, Lolo said, “Until the financial health of the American Samoa Government is improved, measured by full liquidation of outstanding obligations, Court decreed legal liabilities, and maintaining financial solvency evidenced by keeping its obligations current, all annual increments are hereby frozen.”
On overtime, Lolo said, “No overtime will be authorized to be incurred for any reason” and agencies with 24/7 services will ensure that 8-hour shifts are established, guaranteeing that no overtime will happen.
“This administration is committed to full compliance with the stipulations of the Fair Labor Standards Act,” said Lolo, adding that if overtime is incurred by non-exempt employees, one hour of overtime will be compensated at the rate of one and half times the base rate.
“If overtime is necessary based on thorough justification of the need, approval must first be obtained from the Governor prior to incurring of overtime,” said Lolo adding that it's the ASG policy that grade 1 to 12 on both White and Blue Collar Pay Scale fall in the non-exempt employee category and who qualify to incur overtime.
Grade 13 and higher are categorized as exempt employees who are not entitled to overtime, the memo states.
On compensatory time, all ASG employees who are at Grade 13 or higher are salaried employees who are not entitled to overtime, but may accumulate compensatory time.
“It is the current observation that the American Samoa Government is overstaffed, hence there is no logical explanation to justify the accumulation of compensatory time,” said Lolo. “Overburdening one employee while the others are doing very litter signifies management and leadership failure to properly distribute agency responsibilities among existing staff.”
“The director’s annoyance or dislike towards an employee has resulted in the removing of responsibilities as a form of punishment. Consequently, resources are not being utilized to the fullest with ultimate manifestation in the accumulation of compensatory time,” he said.
“It is the general policy that no compensatory time is authorized, recognizing that proper distribution of duties and responsibilities among all agency staff will eliminate the need to accumulate compensatory time,” he said.
If compensatory time is required, the request to the Governor must be thoroughly justified along with an estimation of the hours of compensatory time to be accumulated. It is also the general policy that accumulated compensatory time will be liquidated within the pay period in which it was incurred.
“The Director will see to it that time off is permitted but it will be accomplished in a manner to ensure that the quality of services to the public will not be compromised,” said Lolo.
Regarding annual leave, the memo made clear that it’s healthy to require employees to take vacations for recuperation, to reenergize, and recharge. Therefore, all ASG employees are required to take vacation time off throughout the year as long as service quality provided by the agency will not be compromised.
For sick leave, “It is understandable that employees do get sick from time to time,” the memo said. “However, a pattern of continual absence due to illness should be addressed forthwith with remedial actions implemented to mitigate the problem.”
“Repeated absence places undue and unfair burden on other employees which may necessitate the accumulation of compensatory time or overtime. Directors are advised to pay attention to sick and annual leave reports provided each pay period to assess the effectiveness and productivity of staff,” the memo states.
On new hires or creation of new positions, the memo said these issues will be thoroughly justified for the review and approval of the Governor and the justification package will include certification from the Budget Office that funding is available and authorized in the approved fiscal year budget.
If the new hire is to fill a vacant position due to retirement or resignation, the justification will incorporate the need for the continuation of the position supported by the legal mandate and responsibilities of the agency — and that the duties and responsibilities cannot be assigned to other employees without invoking a position reclassification or promotion action, the memo states.
Samoa News will report in tomorrow’s edition on other cost containment measures outlined in the governor’s memo.