DBAS auditors report both revenue and expenses down for FY 2013

Highest revenue earner: interest income, largest expense: salaries & wages

The Development Bank of American Samoa’s total revenue collection at the end of fiscal 2013 - which is Dec. 31, 2013 — stood at just over $2 million, according to the DBAS financial audit report for FY 2013, released last week.
Conducted by the accounting firm of Moss-Adams, auditors say that in FY 2013, the bank’s total revenue was $2.03 million, compared to $2.07 million in the previous fiscal year. For expenses, the total stands at $2.23 million compared to $3.11 million in FY 2012.
The highest revenue earner for the bank came from “interest income” at $1.25 million, while the largest expenditure is noted as “salaries and wages” at $1.68 million.
Revenues for the bank come through interest income, rental income, loan recoveries and other income & operating grants. Besides salaries and wages, expenditures for the bank include ‘depreciation and amortization’; professional and board fees; office expenses; and bad debt.
Here are some highlights on income and expenses:
•             interest income decreased from $1.28 million in FY 2012 to $1.25 million in FY 2013 as a result of a decreased amount of loan disbursements.
•            rental income increased from $341,074 in FY 2012 to $365,263 in FY 2013 because of an increase by $1,500 in monthly rental paid by one of the bank's tenants.
•            loan recoveries increased by $35,112 due to the increase in amount paid by a number of customers as a result of improvement in recovery action.
•            other income and operating grants, which consist mainly of loan and administrative fees, went down by $112,513 over FY 2012 because of the decrease in both operating grants and other income as administrative fees decreased due to the amount of fees earned on Community Development Block Grant Descent Affordable Housing Loan Program (CDBG-DAHLP) loan program.
•            salaries and wages, including leave benefits, remained approximately the same in FY 2013 as compared with FY 2012 due to the number of employees remaining constant and a freeze on salary increments.
•            depreciation and amortization expenses remained the same despite the significant increase in capital assets due to the new DBAS building, constructed in Pago Pago. No depreciation will be charged on the new building until it is completed and in use in May 2014, according to auditors.
•            professional and Board expenses decreased from $233,357 in FY 2012 to $212,254 in FY 2013 due mainly to the decrease in professional services.
•            Office expenses, including service contracts, repairs and maintenance, office supplies, insurance, utilities, and ground lease decreased slightly by approximately $6,000 due mainly to the decrease in insurance expense because of the decreased number of employees participating in the health insurance.
•            other expenses decreased from $185,770 in FY 2012 to $135,462 in FY 2013 due predominantly to the decrease in travel and training as a result of cost-cutting measures put in place to control costs.
The audit reports says DBAS expects an increase in total revenues by $352,848 from the actual total revenues in FY 2013, due mainly to an expected rise in interest income in anticipation of increased loan disbursements in 2014.
On the expense side, it says total expenses are anticipated to increase by $126,445 from FY 2013, due mainly to an expected rise in salaries and wages and depreciation expenses.
“Net position is projected to increase significantly by approximately $2.4 million due to the increase in capital grants from the Federal Emergency Management Agency (FEMA), it says, adding that DBAS expects to receive from FEMA about $1.1 million to complete its main office being built in Pago Pago.
DBAS is the only semi autonomous agency that is not required by law to have its annual budget go through the Fono for review and therefore it is not included in the annual ASG budget submission. The only time lawmakers get a peek into DBAS finances is through the annual independent audit, which is required by law to be provided to the Fono as well as the executive branch.


Comment Here