Ads by Google Ads by Google

Senators ask how ASG is in black, how 2018 bond series is repaid

Rendering of proposed new Fono Building
fili@samoanews.com

Pago Pago, AMERICAN SAMOA —  An explanation on how the government achieved a $3.9 million positive balance at the close of fiscal year 2018, as well as the revenue sources to repay the 2018 bond series, are two of the main questions that will be raised during a Senate Budget and Appropriations Committee hearing set for next Tuesday.

Witnesses requested to attend the hearing include ASG Treasurer Uelinitone Tonumaipe'a, who is also the chairman of the American Samoa Economic Development Authority (ASEDA) board.

Speaking on Monday at the opening of the 36th Legislature, Gov. Lolo Matalasi Moliga gave a summary of the government’s financial status, saying that by the end of FY 2018, ASG was in the black, with a positive balance of $3.9 million. 

Financial summary data included in the government’s 74-page “2019 State of the Territory Comprehensive Report”  — which is sent to the Fono and US Department of Interior  and separate from the governor’s written official State of the Territory Address — provides some details of ASG’s positive balance. 

Samoa News understands that this is the same data included in the ASEDA board “rating presentation” last November to Moody’s rating company and others in Honolulu before the sale last month of the $50-million 2018 bond series.

The Comprehensive report shows “preliminary” numbers for 2018, and notes total revenues at $94.19 million — with taxes being the highest revenue source collecting over $60.94 million; followed by more than $6.22 million in “fines and fees”.

Total expenditures stood at over $91.06 million, according to the report, which shows the highest expenditure of $32.48 million in the “general government” category, followed by $27.30 million for “education” category, and $10.13 million under “economic development”.

The report also shows “other financing sources” totaling $54,321. At the close of FY 2018 — based on the “preliminary” numbers — total positive balance is over $3.18 million.

Add that to the $786,300 — the beginning fund balance, which is the surplus from FY 2017 — and the total positive fund balance is over $3.97 million as of Sept. 30, 2018.

“The 2018 preliminary fund balance is $3.9 million, which is a significant positive swing from the 2014 negative fund balance of $13.2 million,” according to the Comprehensive Report, which outlined the “key components that led to this turnaround” for the government:

•    Cost Containment Measures — 10% reduction in budget ceiling for each department;

•    Quarterly Reconciliation Meetings — Treasury, Budget, Procurement, and Governor’s Office met to analyze cash receipts to inform financial decisions;

•    Fourth Quarter Adjustments — based upon cash receipt analysis, fourth quarter spending on travel and other non-essential purchases were curtailed;

•    Tax Enforcement — hired 12 new employees and reorganized staff to increase collection efforts;

•    New Added Measures — nearly doubled Tobacco Tax Revenue; added 3% to Miscellaneous Excise Tax;

•    Quadrupled Business License Fees, added scanner fees, increased customs fees, increased port fees, and updated driver's license and registration fees.

“Cost containment measures with reduced budget ceiling of 10%, quarterly review of revenue collections and adjust accordingly in final quarter of fiscal year to ensure budget compliance,” the report said. “Territory will continue to implement these austerity measures.”

SENATORS CONCERNS

During Tuesday’s Senate session, Sen. Satele Galu Satele Sr. recalled the governor’s remarks about the government being “in the black” at the end of FY 2018. He questioned where the government came up with revenues to pay its past previous debts, as such revenues would require Fono appropriation, as cited in the law.

Senate Budget and Appropriations Committee chairman, Sen. Magalei Logovi’i echoed Satele’s concern and scheduled a hearing for next Tuesday to find out more details from ASG’s money people.

Sen. Tuaolo Manaia Fruean wondered out loud how the government is in the black, when ASG entities such as the LBJ Medical Center has outstanding debts.

Sen. Nuanuaolefeagaiga Saoluaga believes that the 2018 figures provided by the governor are unaudited. He then raised the question on the ASEDA bonds, if the previous ones — referring to the 2015 and 2016 series — were paid off and whether the government has sold new bonds without telling the Fono.

With that concern from the Manu’a senator, Magalei included the new 2018 bond series to next Tuesday’s hearing, saying senators want to know more on this bond and how it will be paid.

The Proposed Series 2018 Bonds report document, received by Samoa News two months ago, outlines seven revenue sources — totaling $11.80 million — for repayment of the new bond. Among the revenue sources is $3 million each from the Broadband revenues and 3% miscellaneous excise tax.

(See Samoa News Nov. 5, 2018 edition for details)