Pago Pago, AMERICAN SAMOA — A credit union is reported in the works for this year in American Samoa while the government owned Territorial Bank of Samoa (TBAS) is reported to have written off $18 million worth of loans that were executed off island.

These are some of the issues revealed yesterday during Senate Budget and Appropriations Committee discussion of the Administration’s FY2023 Supplemental Budget.

No ASG witnesses were called for the committee’s discussion. In the end, more than $7.4 million FY 2023 supplemental appropriation was approved by the committee and later endorsed by the Senate during second reading yesterday.

The legislation, which was introduced in the House yesterday - goes through third and final reading today in the Senate.

During the committee discussion, Sen. Malaepule Saite Moliga reminded his colleagues that funding for TBAS that was allocated by the Senate under the Supplemental Budget for FY2022, is not reflected in the FY2023 proposal.

Malaepule hopes that the governor has a plan to provide financial assistance to TBAS, which is the only bank serving the community.

As Samoa News reported last year, the Senate amended the FY2022 supplemental bill of $7.4 million by allocating $5.9 million to TBAS — a move that was proposed by Sen. Togiola T.A. Tulafono, who is also the bank’s board chairman. (See Samoa News edition Nov. 23, 2022 for details).

However, the House — which approved its version of the FY2022 supplemental as presented by the Administration — stood firm on its decision, not to provide funds to TBAS. In the end the FY2022 supplemental was defeated when the last Legislative session ended, as no other actions were taken.

At yesterday’s Senate committee discussion, Magalei shared with senators that the FY2023 supplemental is the wishes of the Administration, and if there’s a financial need for TBAS, the board should request the governor for financial support.

Magalei then revealed that there’s a group looking to open up a credit union this year in American Samoa, and will occupy the ANZ Bank building in Tafuna (across from Veterans Memorial Center).

The senator did not provide any other information, but said that this issue was discussed during Tuesday’s meeting of the American Samoa Economic Development Authority (ASEDA) board meeting.

Magalei, who is also a member of the ASEDA board, recommended that the committee move forward with the bill as presented by the Administration, that includes $1 million for the 75th Anniversary celebration of the Legislature.

He noted that other issues, not in the supplemental, should be left up to the Administration. Magalei express concerns with provisions of the supplemental with money to pay employees, citing “it’s a one-time deal”.

He reiterated his call for moving the legislation forward.

(Samoa News notes that the FY2023 supplemental bill allocates $150,000 to the Territorial Audit Office to pay for salary and related personnel expenses for a Territorial Auditor or Territorial Audit Office staff; and $100,000 to the Governor’s Office to provide for the American Samoa Resilience Commission and the Governor’s Resiliency Office for administrative and staffing needs.)

Senate President Tuaolo Manaia Fruean recalled that the issue raised by Malaepule was not an easy matter for the House when supplemental of FY2022 was debated in the last session. Additionally, the House was adamant on maintaining the original version of the FY2022 as presented by the Administration last year.

He shared with the committee that the American Samoa Government Employees Retirement Fund (ASGERF) board of trustees planned to meet today and the board wants to review TBAS’ financial statement as well as the bank’s current financial status.

Tuaolo, who is also chairman of the ASGERF board, said the Senate will have a difficult time in changing the House’s stand on allocating funds to TBAS.

And the financial status of the bank is an issue that the House also wants to find out more on — especially loans, he pointed out.

According to the Senate President, information he has received states that the bank had a total of $18 million in “write-off” of loans, which were done off island.

And the question comes to mind — why were these loans executed off-island, prior to the spread of COVID-19, he said.

(Samoa News should point out that in TBAS audited financials for FY2021 recorded its largest loss-to-date, after ‘errors’ were corrected in its financials for FY2019 and 2020 — items were said to be “restated”. As a result, a loss of around $2.3 million was recorded, instead of a profit of $648,000, preciously stated. Of note, restated were “unidentified loan delinquencies”, specifically loans that were equipment leases that originated in the US, and the borrowers were reported to experience economic hardships due to the COVID pandemic.)

Tuaolo also said the TBAS needs a large sum of money to address the need to be a member of the Federal Deposit Insurance Corporation (FDIC).

The Senate president suggested that the committee as the Senate move forward by approving the supplemental as presented by the Administration.

Some senators believe that the governor should be approached directly by the bank’s board of directors, if they need financial assistance. However, they still support the need for such assistance to the bank.

Prior to the committee approving the bill, Malaepule reiterated his arguments the need to provide financial help to the bank — the only financial institution in the territory.

Senator Togiola T. A. Tulafono who is chairman of the TBAS board was not present during the committee discussion.

OTHER ISSUES

After the bill was approved by the committee, senators remained in chamber where Tuaolo shared with his colleagues a concern with the $500,000 allocated under the supplemental bill to the Governor’s Office to provide local matching funds for Bipartisan Infrastructure Law projects. Based on documents received by his office, Tuaolo said there is no matching fund required.

A copy of the documents was earlier distributed to senators, during the hearing, and two lawmakers also questioned the ‘matching fund’ requirement.

But with the $1 million allocated for the Fono’s 75th Anniversary, the Senate wanted to get the supplemental bill passed.

Tuaolo also informed senators that he has been informed by the contractor of the new Fono Building that construction of the structure is expected to be completed in June, while the offices in the building are to be completed in December.

The senate president said he wants the 75th Anniversary celebration to coincide with the official opening of the new Fono Building in June and that a committee will be appointed to plan the ceremony.