The Territorial Audit Office has recommended the government develop a process ensuring ASG employees comply with current provisions of the American Samoa Administrative Code pertaining to anyone with financial interest in a company being awarded a government contract, and that they file the required paperwork.

The recommendation is one of three outlined in the TAO’s findings and recommendations follow a limited scope performance audit of the internal controls over fuel distribution at the Tafuna Fueling Station, operated by the Department of Public Works. The audit was initiated during 2011 and the final report was released last week.

According to one of the three findings, ASG has not established a process for employees to disclose if they have benefited from a government contract as required by the Administration Code.

During the review of the contract to install gasoline storage tanks and equipment, TAO learned that DPW solicited bids from a firm owned by an ASG employee, although the firm was not awarded the contract, the TAO report says.

TAO researched the Administrative Code to determine whether ASG can contract with a business in which an employee has a financial interest, the audit report says and noted the Administrative Code establishes ethical conduct standards for ASG employees and contractors.

Specifically, the Code states, “Public employment is a public trust. In governmental contracting, public employees shall discharge their duties impartially so as to assure fair competitive access to governmental procurement by responsible contractors and conduct themselves in a manner as to foster public confidence in the integrity of government.”

Additionally, the Code prohibits employees from participating directly or indirectly in a procurement when an employee or any member of the employee’s immediate family has a financial interest pertaining to the procurement, or when a business or organization in which the employee or any member of the employee’s immediate family, has a financial interest.

However, the Code, “does allow” ASG to contract with businesses that employees have a financial interest in, as long as the employees do not participate directly or indirectly in the procurement process, said TAO.

(The Code defines direct or indirect participation as, "involvement through decision, approval, disapproval, recommendation, preparation of any part of a church request, influencing the content of any specification or procurement standard, rendering of advice, investigation, auditing or any other advisory capacity," according to a footnote in the TAO report)

It also requires the employee to disclose the benefit received from any government contract and the disclosure requirement states, “Any employee who has, or obtains any benefit from any government contract with a business in which the employee has a financial interest shall report such benefit to the chief procurement officer, or designee.”

Citing the chief procurement officer, the TAO report says that the Procurement Office requires bidders to file a disclosure statement when submitting bid documents and the disclosure statement requires bidders to indicate whether they have relatives working for ASG. The disclosure form requires the bidder to identify name(s) of the employee(s), relationship to the bidder and the relative’s position with ASG.

However, the Procurement Office’s disclosure statement does not address the Code requirement for employees to disclose a benefit received from an ASG contract, the TAO report said and noted that the chief procurement officer “is not aware of any process whereby ASG employees disclose the benefits received from an ASG procurement.”

TAO recommends the Procurement Office work with the Governor’s Office, Attorney General and Treasury Department “to develop a process to ensure employees comply with the... Administrative Code requirement to inform the chief procurement officer when a business in which they have a financial interest receives any benefits from a government contract.”

In his response to the TAO audit, Public Works director Taeaotui P. Tilei said it was never the intent of DPW to bypass any controls of the procurement process and will follow any regulations with regards to this matter.

Samoa News will report later in the week on the two main findings and recommendations in the TAO report.