House questions Treasurer, Budget Director over reprogrammed funds
While the House applauds the administration’s move to reprogram more than $4 million in the FY 2013 budget to ensure the government is not in the red at the end of FY 2013 — which ended at 12 midnite last night — some lawmakers were still concerned that not all expenditures for the fiscal year have been calculated.
This was the reaction from lawmakers during the House Budget and Appropriations Committee hearing yesterday on the administration bill to reprogram $4.3 million from certain departments and agencies to other entities of the government, to ensure ASG has a “balanced budget” at the end of the fiscal year.
Testifying for the administration was ASG Treasurer Dr. Falema’o ‘Phil’ M. Pili and Budget & Planning Office director Catherine Aigamaua-Saelua.
The committee was looking forward to getting an updated financial report of ASG revenues and expenditures, which was requested, but Pili said at the hearing he had only just received notice to testify on the proposal.
Financially, said Pili the government is doing well, including its cash flow, adding it's difficult to provide the final numbers because the financial books are not closed yet and numbers provided in the bill are “preliminary numbers”.
Aigamaua-Saelua said the $4.3 million to be reprogrammed is the estimated amount of unspent money from other offices and departments at the end of the fiscal year.
Rep. Larry Sanitoa said he has “serious concerns” with the reprogrammed funds, given the fact that ASG hasn’t closed the books for FY 2013 and all of the expenses for the fiscal year have not been submitted.
Aigamaua-Saelua explained that in the second week of August a communication was sent out to all entities asking them to submit by Aug. 30 expenses projected to be paid in FY 2013 from local funds.
(Samoa News should point out that during a cabinet meeting in mid August Gov. Lolo Matalasi Moliga told directors they had until the end of August to “submit any important or urgent expenditures to be reviewed and considered” and after Aug. 30, nothing else would be reviewed, as ASG works on closing the books for FY 2013.)
Aigamaua-Saelua said come Aug. 30, everything came to a halt except for payroll, utilities and some expenses that needed to be paid. She also said her office met with the Treasury and Governor’s Office to discuss the numbers for each department and office affected by the reprogrammed funds.
The Treasurer added that the FY 2013 books remain open until March 15 next year, but that is too late as well. Additionally, the anti deficiency act would be violated by the government with some of the departments and offices expecting overruns in FY 2013, unless this reprogrammed bill is approved.
He also pointed out a couple of times during the hearing that the government is expected to have a “balanced budget” at the end of FY 2013 and this is the first time in many years this has happened. Pili said the administration remains firm on not overspending, which would be in violation of the anti deficiency act.
Sanitoa, along with other lawmakers said he appreciates the new administration’s efforts to stop the long standing practice of budget overruns; but he is still concerned that there might be other expenses for FY 2013, not yet received or calculated into the final expenditures of the fiscal year.
Pili told the committee the administration has only been in office for nine months but it had implemented cost-containment measures at the beginning of the year, due to a $10 million projected deficit at the time.
He also said the cost containment measures have resulted in realized savings of $4.3 million to be reprogrammed for other entities which are projected to be in the red in FY 2013. And when “everything is ironed out at the end of the day, we will have a balanced budget,” he added.
Lawmakers asked questions about some of the specific departments and offices who were receiving the reprogrammed funds. For example, the Education Department is given $750,000 under the reprogram bill, and Aigamaua-Saelua explained the problem with DOE is that no money had been allocated for utilities, and its FY 2013 budget focused on payroll and other services.
She said the lack of funds in FY 2013 for utilities also effected other agencies and offices.
The Budget Office director was also asked to explain the $1.15 million to be reprogrammed to “misc. unbudgeted programs” and she replied that this covers a lot of “non EOB electricity” as well as other services provided by the Treasury Department, which includes wire transfer fees.
She said this reprogrammed item was set like this in the bill because it doesn’t have a specific budget category in the FY 2013 budget.
She was also asked to explain why $74,500 is being reprogrammed to the ASG Stimulus Office and $28,000 for the Information Technology Department when these two entities no longer exist. Aigamaua-Saelua said neither entity received funding in FY 2013 and these were their expenditures left to be paid.
Once the witnesses were dismissed, the committee called in House legal counsel, Nathaniel Savali to answer whether there are any legal implications if the bill is approved by the Fono after FY 2013.
Savali explained that reprogramming can be done during the fiscal year or at the end, and in the case of this bill, it is still valid after Sept. 30 (the end of FY 2013) — upon passage by the Fono.
With this legal issue cleared up, the committee approved the bill and reported it yesterday to the full House, which approved it in second reading, with third and final reading set for today.
An identical version of the bill has yet to be introduced in the Senate.