Unused money from $20 Mil loan earmarked for emergency reserve acct
Gov. Lolo Matalasi Moliga has directed the Treasury Department to set up an emergency reserve account, with the first funding source coming from the unused money leftover from the government’s $20 million loan with the ASG Employees Retirement Fund.
The governor made the revelation during last week’s cabinet meeting, telling directors that at the territorial leaders meeting two weeks ago, which included Congressman Faleomavaega Eni and Interior Department official Nikolao Pula, this issue had been raised.
Lolo says that it was also at that meeting that territorial leaders for the first time were presented with all ASG accounts, including the one off island that has a total amount of $3.5 million. (This off island account has been held with the investment firm of Smith Barney and was used by the previous administration to hold FEMA matching funds for previous disasters).
The governor said one major decision announced at the leaders meeting was that the left over money from the $20 million loan will be put aside to create an “emergency reserve account for the government.”
He said he has directed the ASG Treasurer Dr. Falema’o Pili — who compiled for the meeting the list of all ASG accounts — to work on this reserve account, which will be funded with left over proceeds from the loan.
“There were some questions from the Fono leadership on the money that was assigned to the Fono,” Lolo told directors. “So I told them, there are so many unfinished projects.”
He said, “So what we’ve decided — as leaders — is to set aside that money for an emergency fund. And I really appreciate the efforts of the Treasurer to put together that money and hopefully that $3.5 million in our off island account will be put into the reserve account as well.”
(Samoa News notes there is no mention of the balances on the $1Mil given to each district for infra structure projects. However, given the governor’s comments, it looks like the ‘unused’ money will be directed to the emergency reserve account, wiping out any balances remaining on any of the districts’ $1 Mil. )
An ASG summary report — as of Jan. 31, 2013 — on the $20 million loan received by some lawmakers in February this year shows that over $19.03 million has been expended, leaving a balance in the fund of only $960,307.40.
The same report shows that the Fono has spent only $301,601 of its $3 million allocation. Samoa News understands that some lawmakers have requested a new update on the $20 million loan from the Treasury Department and hope to have that information prior to the Fono reconvening their next session in July.
During the cabinet meeting, Lolo told directors that ASG does not have any other reserve account to tap into for emergency financial situations, such as the one faced by LBJ Medical Center, which could benefit from such a fund.
Lolo didn’t elaborate further on LBJ’s financial woes, but hospital board chairperson, Sandra King-Young told Samoa News last month that the board had already approved a $2.25 million supplemental to be submitted to the executive branch for approval and submission to the Fono. She also revealed that the hospital is running on a $1.7 million shortfall in its budget, since the $1.2 million LBJ had been expecting from the 2% wage tax is not expected this fiscal year.
To date, the Treasurer has only said that the 2% wage tax earmarked to repay the government loan from the Workmen’s Compensation Fund, which was made to help LBJ out of its financial shortfall last year, is still being used to pay the loan. There has been no update on the balance of the loan, nor has there been any information released about how much has been collected since the tax bill was enacted.
Also, there has been no confirmed date for when the medical center can expect to start receiving the proceeds from this tax. In the meantime, the administration had mentioned that it was looking at stopping this 2% tax, as it is a burden on the people; but, no further information has been forthcoming.