Pago Pago, AMERICAN SAMOA — The American Samoa Government’s use of $1.5 million of federal Coronavirus Relief Fund (CRF) proceeds, to purchase the vessel, MV Pago Pago, was in “violation” of federal laws and regulations of the U.S Treasury and so far ASG has paid back about $1 million as of Sept. 07 this year.

This is according to a Sept. 12 memo from Deborah L. Harker, the Assistant Inspector General for Audit of the US Treasury Office of Inspector General (OIG) to Jessica Milano, the US Treasury’s Acting Chief Recovery Officer. And the 12-page memo pertains to the “Interim Audit Update ─ Audit of American Samoa’s Uses of Coronavirus Relief Fund Payment”.

The memo doesn’t mention by name the owner of the MV Pago Pago, but Samoa News reported in October 2020 that the vessel had been owned by Paramount Builders, which made an offer to sell it for $1.2 million to ASG during the Lolo Administration. (See Samoa News online Oct. 11, 2020 for details.)

According to the summary of the OIG interim audit, the former COVID-19 Task Force chairman approved and signed the COVID-19 ERF for the $1.5 million purchase of the MV Pago Pago on September 18, 2020. The former Treasurer approved and signed the form on October 6, 2020, and the former Governor approved and signed it but did not date his signature.

The first payment for the MV Pago Pago was on September 17, 2020, which was prior to the COVID-19 Task Force Chairman’s COVID-19 ERF signed approval on September 18, 2020. ASG subsequently made the second and third payments on October 7, 2020, and October 28, 2020, respectively, according to the OIG audit.

From April to May 2020, prior to the purchase of the MV Pago Pago in September 2020, ASG leased the vessel from the seller as substitute transportation for supplies and goods while one of ASG’s other vessels, the MV Manu’atele, was being repaired. The MV Manu’atele was used for transportation of supplies, goods, and passengers; whereas, the MV Pago Pago was used to transport goods and supplies only. “The MV Pago Pago was not certified for passenger transport,” the audit says.

INTERIM AUDIT RESULTS

“We determined that ASG’s use of $1.5 million of CRF proceeds to purchase the MV Pago Pago... and [it] was not previously budgeted as of March 27, 2020, but ASG officials were unable to justify the use of CRF proceeds as necessary in response to the COVID-19 public health emergency,” the audit summary states.

Additionally, “ASG’s purchase of the MV Pago Pago did not comply with the use of funds requirements” under federal law and U.S Treasury’s Guidance “as the vessel was not a necessary expenditure in response to the COVID-19 public health emergency”.

OIG recommends that US Treasury recover this money back from ASG.

ASG RESPONSE

As part of its reporting process, OIG provided ASG management an opportunity to comment on the draft of the audit report.

ASG Treasury Malemo Tausaga provided a brief reply in a July 14 letter, which first, thanked OIG for the exit conference call. Malemo offered “no technical comments” from ASG for the audit but agreed with the finding.

“We understand the finding and agree to pay back the $1.5 million of CRF proceeds that were used to purchase the MV Pago Pago,” Malemo added.

U.S TREASURY

The U.S Treasury agrees with the audit finding and points out that ASG had already agreed to a repayment plan in which $1 million has already been repaid — $500,000 each made in July and August — with the final $500,000 payment to be made today, Sept. 19, according to documents included in the OIG audit.

Samoa News will report in tomorrow’s edition on other information about the audit cited by OIG.