Lower deficit, higher tax collections in the forecast
Treasury Department’s projected deficit forecast of the ASG General Fund account by the close of the current fiscal year was reduced drastically at the end of the FY 2013 second quarter, which covers the period of Jan. 1 - Mar. 30, 2013, according to the department’s second quarter performance report.
Treasury had forecast, at the end of the first quarter which ended Dec. 31, 2012 — that the total general fund deficit would be $8.86 million. With all other funds in the Treasury cash pool added, ASG was projecting a deficit of more than $9.8 million by the close of FY 2013.
However, in the second quarter performance report, ASG Treasurer Dr. Falema’o ‘Phil’ M. Pili says ASG is now looking at a deficit of $1.25 million for the general fund. If other funds in the Treasurer’s Cash Pool are added, Pili says ASG is forecasting a deficit of $3.01 million for FY 2013. “The general fund has to cover for other special revenue funds that are in the red,” he explained.
Based on the data in the report, the drop in the deficit is the result of an increase in tax collection. It also should be noted that Gov. Lolo Matalasi Moliga on his first day in office implemented across the board several cost saving measures for ASG — such as no overtime, a freeze on hiring and traveling, and locking up ASG vehicles after hours, except for directors, emergency and first responders.
According to Treasury’s data, revenue budgeted for FY 2013 is $77.70 million and as of Mar. 31, total revenues collected stand at $38.98 million. If collection maintains its current trend during the last two quarters of the fiscal year, the Treasury department estimates $85.04 million in revenues, resulting in $7.33 million more than budgeted.
ASG’s single largest revenue is taxes — corporate, individual, excise and military cover-over — and Pili said total tax collections are estimated to be more than $4.26 million above budget.
(The preliminary and unaudited financial figures included in the Treasury report states that $50.31 million in taxes is budgeted for FY 2013 and as of Mar. 31, ASG has collected $26.75 million.)
The Treasurer went on to say that License & Permits are forecasted to be $30,522 below budget; Fines and Fees are $104,038 above budget; Charges for Services are $430,186 above; miscellaneous revenues are $1.27 million more than budget; and Special Grants are more than $1.3 million above budget.
ASG spending is forecasted to be $8.40 million more than the budget by the end of the current fiscal year, based on the current trend of spending, the Treasury report states and noted some departments and programs are with "considerable overruns” so far.
For example, the Department of Education has the highest at $3.60 million, followed by the Fono at $1.92 million, Department of Public Works at close to $600,000 and Final Payout to outgoing directors and contractors at $436,828.
Other departments and programs with overruns — all below $400,000 — in the second quarter include the Governor’s Office; Treasury; Health; Port Administration; Public Safety; Election Office; ASG Electric/Water and EOB maintenance.
Special revenue funds in the Cash Pool that have overrun their budgets by the second quarter include the Airport Division with $1.15 million — which is the highest overrun in this budget category — followed by the Housing fund at $329,212 and the Sports Complex at $173,512.
Others with an overrun are Drivers Training, Road Maintenance, Public Market and the ASG Print Shop.
FY 2012 FINANCES
The report also states that as of Mar. 31, the auditing firm of Moss Adams had completed fieldwork on the Single Audit portion of the FY 2012 audit and the audit team is currently finalizing working papers and preparing the draft report.
Pili says there were 16 major programs that required audit testing for the fiscal year as compared to 15 major programs in FY 2011, but didn’t elaborate further. He did note that the Immigration Bond account continues to be a material weakness that will prevent ASG from achieving a “clean audit report”.
He says that the Internal Audit Office, which comes under the jurisdiction of the Governor’s Office, has yet to turn over to Treasury financial files for the Immigration Bond account, which was audited by the Internal Audit Office.
For the Financial Statement Audit portion, Pili said the fieldwork was completed on Mar. 31 and the auditing team is following up with individual ASG Treasury staff on several outstanding items. In addition, the auditing firm had received financial statements from all ASG components with the exception of LBJ Medical Center and the American Samoa Power Authority.
He says that according to ASPA, their auditors have completed the financial statements in draft and they anticipate issuance of their financial statement shortly.
LBJ auditors have informed the Treasurer that there will be a delay in the issuance of LBJ’s audit financial statements due to additional work required in the internal controls areas. (Samoa News should point out that LBJ is the only entity that didn’t submit a second quarter performance report, which is something that lawmakers will need if the administration sends to the Fono a supplemental appropriation bill for the medical center.)
Pili said final issuance of a Financial Statement and Single audit for ASG is projected to be no later than May 31.