Gov. Lolo Matalasi Moliga has informed the Legislature the government is expecting to balance its budget at the end of fiscal year year 2013, which is the “first time in many years” and it will do so by reprogramming funds and deferring payments on certain expenses — such as a partial payment for the court judgement in the Laufou case.

This was revealed in the governor’s letter this week to Fono leaders when he submitted a proposal to re-program more than $4 million from several agencies and programs for the use of other ASG entities for FY 2013, which officially ends on Monday, Sept. 30.

The governor pointed out that ASG “expects to end the [fiscal] year [2013] with a balanced budget for the first time in many years,” and then noted, “in order to achieve this we have had to make some sacrifices, in particular we have deferred $1.7 million approved in the [$5 million] Supplemental Appropriation... in order to achieve the goal of the balanced budget.”

One deferred expenditure in the supplemental is the $550,000 partial payment for the court judgement in the Laufou case.

(Samoa News should point out that $500,000 has been allocated in the FY 2014 budget for the judgement; and it looks like the FY 2013 Laufou partial payment is being reprogrammed to pay for over runs in other ASG departments, including the Fono.)

REPROGRAMMING OF FUNDS

Reprogramming of funds is one of four items listed by the governor to be considered by the Fono during the special session, which convened yesterday, for a period not to exceed 20 calendar days.

In his letter the governor said that for too many years now, the mandate under Title 10, Chapter 6 of local law — which limits government expenditures to the amounts appropriated by the Fono—has been ignored by previous administrations as well as the Legislature.

“I don’t consider this continuing practice to be acceptable, as one of the underlying premises of this administration is that we will meet our legal obligations to the people and the territory of American Samoa,” he said.

He recalled that a few years ago, toward the end of each fiscal year, a reprogramming bill was submitted to the Fono in order to “balance the books”.

This has historically been necessary as during the course of the fiscal year it is inevitable that original budget estimates are not achieved for one reason or another, giving rise to savings  in some departments and agencies, and expenditures over budget in others, he said.

“I am sure you will agree with me that it is in the interest of good governance that we return to the days of formally memorializing budget savings and overruns,” he said. “Doing so will also reflect well upon our annual Single Audit findings.”

According to the governor, savings from departments and agencies will total $4.38 million.

The preamble of the proposed legislation explains that budget overruns in the first quarter of FY 2013, changes in funding priorities by the new administration, the effects of sequestration, and unexpected expenses “like the need to rehabilitate our schools before the start of the 2013-2014 school year” along with “emergency repairs to our roads” have resulted in below budget expenditures by some departments and agencies, and over budget expenditures by other ASG entities.

Of the total amount for reprogramming, $2.76 million will come from 23 departments and agencies (with the highest amount being $695,000 from the Scholarship Fund, followed by $330,000 from the governor’s office) and $1.62 million from 12 programs under the Special Program budget category.

The money is then reprogrammed to eight departments and agencies totaling $1.33 million while $3.04 million goes to 11 programs under the Special Program budget category, according to the proposal.

The largest beneficiary of the reprogrammed funds is $1.15 million for “Misc. Unbudgeted Programs” followed by $750,000 to the Education Department, and $492,000 for an ASG Audit Contract. 

Interestingly, the Fono is getting $5,000 in the reprogrammed funds, $74,500 will go to the Economic Stimulus Office, $28,000 for Information technology and $64,900 to the U.S. Department of Labor.

There is no explanation about the “Misc. Unbudgeted Programs” or the payment to the Labor Department but these are some of the issues expected to be raised by lawmakers with ASG officials when this measure is reviewed.