10th Arts Festival officials surprised by expenditures
Officials of the 10th Festival of the Pacific Arts maintained there were no paid workers during the 2008 regional event and were surprised to learn at last Thursday’s Senate Investigative Committee hearing that more than $200,000 was used as disbursement for volunteers and more than $100,000 went to the 2009 Samoan Heritage Week in Honolulu.
SIC’s hearing on spending of the Arts Festival hosted by American Samoa is part of its probe into the spending of the $20 million loan ASG received from the ASG Employees Retirement Fund, which provided funding for the festival.
Witnesses subpoenaed for the hearing were festival co-chairs Fagafaga Daniel Langkilde and Leala Elisara Pili, who is also the executive director of the Arts Council and Lauti Simona, who served as executive director of the Festival Office.
Fagafaga who also served as the festival’s chief financial officer, submitted to SIC the festival’s proposed budget, a report of statement of revenue and expenditures and the revised and final budget.
In his testimony to committee questions, Fagafaga said he could recall that the proposed first budget was over $6 million but was not endorsed by the festival board, who later revised it and approved the budget of $4.6 million, which was submitted to the Governor’s Office. He also said the governor was informed from the beginning that an overrun of $1.5 million was also projected.
Fagafaga said that he, along with Pili and Lauti went to meet with the governor, who was informed about the projected shortfall. He said the governor’s reply was for them not to worry because there were ways to address the shortfall, if it occurred.
As to the revenue to fund the budget, he said $2.5 million was appropriated by the Fono (which was through the $20 million loan proceeds), $485,500 was received from donations from private sectors, organizations and other members of the community and $339,000 under a technical assistant grant from the Interior Department. (Total revenues came to $3.32 million)
He also pointed out that a condition of the grant was that a CFO was to be hired and paid for under the grant to ensure that there is someone handling accounting and finances of festival money.
Fagafaga went on to testify that the Fono, prior to the 2008 Festival, was sent a copy of the approved budget and that he, along with other members of the festival board testified before lawmakers, who were also informed at the time of the expected shortfall. He said the Senate at the time had stated that if the festival needed additional funding to make the appropriate request.
There were also SIC questions as to whether all vendors had been paid for their services, to which Fagafaga twice said, he does not know and the reason for this reply is that when the festival budget was given to the governor in the early part of 2008, the governor was also informed about the expected shortfall.
And then about a week and a half before the festival opened, the festival committee ran out of money, he said, adding that the governor was immediately told about the situation. In return, the governor informed them that any other invoices thereafter be sent to ASG Treasurer Magalei Logovi’i and this was the process thereafter.
He also said that as of May 2009, there were still efforts to pay other vendors, who contacted their office about not getting their payments, and the office brought these vendors’ requests to Magalei’s attention.
Later in the hearing, responding to SIC questions, Fagafaga said total expenditures for the festival actually came to $3.5 million and SIC chairman Lualemaga Faoa quickly asked Fagafaga for a breakdown of the $3.5 million in expenditures.
Fagafaga also explained that the festival board was able to keep costs down because they knew of the projected shortfall. He said the festival wanted to hire personnel but that couldn’t be done due to the projected shortfall, adding that a lot of local residents volunteered for the festival.
And during another round of questions from the committee, Fagafaga said that the festival budget, in the end, ended up being short $251,182 — which was the amount covered by the Treasury Department after the Arts Festival.
BUDGET OFFICE REPORT
The witnesses were told that SIC had been provided with a report from the ASG Budget and Planning Office on festival spending and some of the expenditures were questionable. For example, Sen. Fuata Dr. Tagiilima Iatala said there is an expense of about $150,000 for the Samoan Heritage Week in 2009 and wanted to know the Arts Festival link to the heritage week a year later.
Fagafaga responded that he was not aware of the Budget Office report and he was also not aware of the heritage week payment which has nothing to do with the Arts Festival. This was echoed by Pili, who said the heritage week expenditure is something new to them and they were not aware of it.
Lualemaga pointed out another Budget Office report expenditure to counter what Fagafaga had told the committee earlier that all workers volunteered their time.
According to the report, “disbursement to volunteers” is $201,144 which means volunteers were compensated, said Lualemaga; to which Pili said that all of them who worked during the festival worked as volunteers and this was the first she had heard about such a payment. This was supported by Fagafaga.
Lualemaga went on to say that there was “disbursement to delegates”, according to the budget office report, of close to $742,000. Witnesses reiterated they were not aware of this expenditure either.
And there were also expenditures for the Miss South Pacific Pageant, which was also hosted by American Samoa in 2008, and charged to the Arts Festival, but the witnesses stressed that this expense had nothing to do with the Arts festival.
According to the Budget Office report to the SIC in March this year, $1.50 million was allocated to Arts Festival for logistics but it overspent by $1.02 million; and $1 million was allocated for the food voucher program for the Arts Festival, which was overspent by $44,453.
Earlier in the hearing the witnesses were asked about what they thought about the outcome of the festival and Pili said it's her testimony is that it was a spectacular event.
She said the festival was a success and even countries who participated at the time, up to now, are still talking about host country American Samoa and its successful hosting in 2008.
She said the successful festival was because everyone in American Samoa worked together and this includes the Fono, the Executive Branch, the private sector, the board and the entire community.
Lauti added, that after the festival, an “evaluation” was conducted of the participating countries — and all the responses were positive. Hawai’i, he said, was the only one who brought up issues that should be addressed, adding that he didn’t pay much attention to Hawai’i, because Hawai’i has never come under the category of “developing countries and territories” as they are already a well developed American state.