Gov. Lolo Matalasi Moliga has called on directors to structure their budgets for the new fiscal year (2018) in accordance with the threshold ceiling of 90% of the approved FY 2017 budget, saying that the threshold is for all departments and offices funded by local revenue.

Of the total $380.48 million approved FY 2017 budget for ASG, $92.39 million comes from local revenues. The budget call letter for FY 2018 went out last week from Office of Program Planning and Budget Director Catherine D. Saelua. (See Samoa News June 9 edition for details.)

Speaking at last Friday’s cabinet meeting, Lolo told directors that the budget call letter for FY 2018 has gone out with the threshold ceiling set at “90% of your approved FY 2017 budget” and the budget ceiling is for local revenue, and does not affect federal grants.

Except for three or four new Executive Branch directors, Lolo said the rest of the directors have dealt with budget plans in the past four years and should be fully aware of how to budget their financial needs.

“We also have given you the opportunity to review and change the structure of your department or office in a way that would best serve the people of American Samoa,” Lolo pointed out and suggested that directors “revisit your organization, look into the structure, and make changes that will best fit and will best serve our community.”

Lolo continued, “We’re not holding you back, but always keep in mind, it is what you have, it is what you have to plan (for). Make sure that the organization chart reflects the resources allocated to each department and office.”

Responding to a question from cabinet members, Lolo emphasized that federal grants are not affected by the 10% reduction in the FY 2018 budget. He recommended for agencies to push for federally funded programs for American Samoa, as they will provide additional revenues for ASG.

He stressed that the 90% threshold ceiling for all local funds, should include all required and necessary expenditures for operations, as well as meet the needs of the public in the new fiscal year.

The Governor said all other needs can be provided in a separate supplemental request, and would be compiled with all other departments and agencies for separate submission to the Fono, so lawmakers will have an idea of other pressing needs that couldn’t be funded at this point, with the 90% threshold ceiling for FY 2018.

He explained that the proposed FY 2018 supplemental would be funded with proposed revenue measures that the administration plans to submit for Fono approval. Lolo didn’t give any details on the proposed revenue measures, which are being worked on by the ASG Revenue Task Force.

SPECIAL PROGRAM

For ASG semi autonomous agencies, Lolo said, “You prepare your own budget the way you see fit with the resources you have. Only the subsidy will be affected by the reduction of 10% or even less, especially if you have a subsidy under the Special Programs” which are all locally funded and administered by the Governor’s Office.

“We will review the Special Programs separately to include LBJ, the College, and all agencies that receive subsidy from our local [revenue],” Lolo said. “We will make sure we can afford the subsidy.”

Over the years, approved subsidies for the authorities were sometimes not received in full by the end of the fiscal year, and Lolo acknowledged that, saying, “We’ve been having some issues with the subsidies. So we’ll review and make sure that we are real with the subsidy.”

According to the Governor, ASG used to give about $3 million and $6 million for LBJ but “that’s unreal [as] our collections cannot support the subsidies that we’ve been giving; but we purposely prepare the budget in that way to make sure that we have the flexibility to move around in doing things.”

So this year, he added, "it will be different. I think we should base our real budget on real resources that we are able to collect.”

Lolo asked the authorities to “prepare your budget the way you used to, and any local subsidy you receive will be discussed separately.”

LBJ Chief Executive Officer Taufete’e John Faumuina asked when “we will know how much we’ll be getting for subsidy so we can plan our budget proposal accordingly.”

Lolo responded that hopefully before the end of this month. “We’ll make an effort to sit down with you, so you can at least justify your budget to us and make sure it’s in line with our capacity to produce those resources that you ask for.”

With the Fono set to convene July 10 for the Second Regular Session of the 35th Legislature, Saelua told cabinet members that time is of the essence and therefore, it’s important that all budget proposals are submitted to her office by Friday, June 16.

Negotiations will follow before the budget proposal is finalized, sent to the Governor for approval, and then to the Fono, she said.

When the Fono returns next month, lawmakers are expected to seek financial reports from the Administration to find out specific details of where ASG stands before the start of FY 2018. The financial reports will also be used by lawmakers when budget hearings are held.