Ads by Google Ads by Google

Governor’s memo focuses attention on mismanaged grant funds

In a letter to all ASG departments and agencies last week, Governor Lolo Matalasi Moliga has says the Treasury Department has been told to no longer accept expenditures of grant funds not “officially specified” under the grant’s drawdown, in order to stop the “unanticipated” burden on the government’s General Fund, which has contributed to its negative balance.

 

The governor noted the amount of federal grant reimbursement lost due to the failure of departments and agencies to draw down “legitimately accrued federal grant reimbursements” has contributed to a negative General Fund Balance, as un-budgeted local funds are not being reimbursed from federal grant sources.

 

“Further, disallowed costs uncovered during grant program audits again place the unanticipated burden on the General Fund to use un-budgeted local revenues to repay the federal government for grant disallowed costs,” the governor wrote.

 

Given the drain on the General Fund — attributed to the lack of proper management of federal grant programs — the reimbursement of local funds with federal grants for projects and spending allowable under the latter without the requisite drawdown “will no longer be tolerated.”

 

 “This practice has to stop,” wrote the Governor, as “it not only undermines the government’s ability to safeguard and maintain its fiscal cash flow, along with improving and preserving our delicate relationship with the federal grantors and our High Risk Status, but it may possibly impose further financial liabilities on the government in the future.”

 

Lolo further noted that to guarantee the application of proper financial controls and enforcement over these transactions, all departments or agencies operating or utilizing federal grants are to submit to the Treasurer an official and concise drawdown document for each federal grant awarded under its administrative purview. (In other words, what are each grants allowable costs.)

 

“Effective immediately, the department of Treasury will no longer accept any further expenditure requests unless such spending is officially specified under the drawdown,” said the governor.