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Treasurer explains that $3M surplus is only 'preliminary' number

ASG Treasurer, Uelinitone Tonumaipe’a
He said it was Lolo who requested the preliminary report

Pago Pago, AMERICAN SAMOA — The government’s surplus of more than $3 million at the close of fiscal year 2018 is “preliminary” as the independent audit is not yet completed, according to ASG Treasurer Uelinitone Tonumaipe’a in his testimony before the Senate Budget and Appropriations Committee last Wednesday.

Committee chairman, Sen. Magalei Logovi’i called the hearing following requests by some senators who wanted more details of the surplus, based on Gov. Lolo Matalasi Moliga’s State of the Territory Address in January to a joint session of the Fono.

The governor told lawmakers at the time that at the close of FY 2018 “estimated recorded general fund balance” totaled over $3.97 million — which includes a $786,300 surplus in FY 2017 and a $3.18 million surplus in FY 2018.

Since then, lawmakers in both the Senate and House have questioned how ASG would have a surplus while there are reports that some semi-autonomous agencies didn’t get their entire subsidy as approved in the budget process.

During the Senate committee hearing, Tonumaipe’a first distributed a one-page financial summary, which he called the “income statement” of revenues and expenditures, showing ASG in a deficit between FYs 2013 and 2016. According to the summary, the government was in the red at $4.80 million in FY 2013; $13.15 million in FY 2014; $9.15 million in FY 2015; and $3.10 million in FY 2016.

But things changed in FY 2017 with ASG closing out that fiscal year with a surplus of $786,300 which is final audit numbers, according to Tonumaipe’a, who noted that the FY 2017 audit report should have also been submitted to the Fono and it has been verified by auditors.

He testified that at the close of FY 2018, the government’s “preliminary” number stands at $3.18 million as a surplus, and emphasized that FY 2018 numbers are only “preliminary” and the independent audit is underway, to be completed next month.

Therefore the $3.97 million — as mentioned by the governor — includes final surplus for FY 2017 and “preliminary” for FY 2018, he clarified.

Sen. Tuaolo Manaia Fruean questioned the Treasurer about why the FY 2018 preliminary was part of the governor’s speech to the Fono, instead of waiting until the audit is completed. This was echoed by other senators, who said such statements of FY 2018 in the “black” is a misrepresentation of facts.

Tonumaipe’a said the FY 2018 preliminary report was requested by the governor and he complied.

Several senators then questioned why the FY 2017 surplus $786,300 was not submitted to the Fono for re-appropriation in accordance with the law, to which Tonumaipe’a quickly blamed himself, saying he failed to submit it to the governor for transmittal to lawmakers for approval.

“That’s the type of answers we want. The truth so that the Fono understands,” Tuaolo told the Treasurer, who flashed a big smile.

Sen. Nuanuaolefeagaiga Saoluaga Nua sought an update on the status of the 2% wage tax to be paid by all wage earners in the territory, with all revenues going to LBJ Medical Center. The Manu’a senator said that if FY 2017 was in the “black”, did the government pay to LBJ all of the revenues collected, and was this done in FY 2018?

Tonumaipe'a responded, yes, and said he can provide later a complete report on the wage tax for FY 2017 and 2018. He said it's very difficult to track wage taxes paid by the private sector, which usually pays at the end of the year.

For revenues collected through ASG workers, he said payment is submitted every pay period to LBJ.

Some senators want to know whether ASG has paid the budgeted subsidies to semi-autonomous agencies, such as the American Samoa Community College and LBJ during FYs 2017 and 2018.

“If the government claims to be in the black in FY 2017 and possibly 2018, did you pay all of the required approved subsidies?” Nuanuaolefeagaiga asked.

Sen. Magalei Logovi’i added that in the FY 2018 fourth quarter performance report — covering July 1- Sept. 30, 2018 — it shows that while $4 million was approved for the LBJ subsidy, only $1 million was paid out to the hospital.

Tonumaipe’a said paying out subsidies all depends on the government’s “cash flow”, and payments for subsidies cannot be made when there are other pressing expenses for ASG with payroll being the top priority, to be covered every pay period.

Towards the end of the hearing, senators reminded Tonumaipe’a of the FY 2017 surplus to be submitted to the Fono for re-appropriation as required by law.