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Senate deliberates bill to ensure use of ALL surplus funds must come before the Fono for approval

Senator Utu Sala Poasa

Pago Pago, AMERICAN SAMOA — Government overspending of budgeted funds exposed in recent hearings, has prompted the introduction of a Senate bill which amends the responsibilities of the Governor of American Samoa in the budget procedure to mandate the legislative appropriation of any unanticipated revenues.

After grueling questioning by senators last week on government’s $40 million overspending of the FY 2023 budget, government Treasurer Malemo Tausaga and Budget Director Catherine Saelua appeared again before the Senate Budget and Appropriations Committee yesterday morning to discuss the proposed bill.

According to the bill’s Preamble, it “recognizes the paramount importance of responsible fiscal management in the governance of our territory.”

It also “acknowledges the necessity to ensure transparency and accountability in the utilization of unanticipated revenues derived from various sources, including local, federal or others.

“Understanding the critical role of the legislation in overseeing budgetary allocations to safeguard the public interest.

“In pursuit of these objectives, it is deemed necessary to amend existing statutes to require the Governor to submit an appropriation bill for legislative approval before obligating or expending funds exceeding previously appropriated expenditures.

“It also recognizes the need to provide exceptions for cases of emergency, as declared by the Governor, where immediate action is imperative for the preservation of public safety, health or welfare, pursuant to Section 13.0307 of the American Samoa Code Annotated.”

During the hearing, Committee Chairman Senator Utu Sala Poasa inquired about the balance of the government Stabilization Fund which was established in the early 1980s.

Budget Director Saelua however revealed that since she became budget director, no funds have been allocated to this account as required by law if there are surplus funds.

Utu asked what the account balance was since it is mandated that the sum of $200,000 from surplus funds must be deposited in the Stabilization Fund after every fiscal year.

This must be done after every fiscal year until the deposited sum reaches $10 million which will then be earmarked for emergencies.

Saelua reiterated that no funds have been deposited into the account since she took office and to her knowledge, there are no funds in that particular account.

Utu expressed his concern about this discrepancy saying that the public is depending on the budget director and treasurer to monitor and manage government funds, so that there would be funds available to help those in need in emergencies and natural disasters.

Senate President Tuaolo Manaia Fruean reminded the Budget Director that the proposed bill requires Fono approval of all funds local, federal or others.

Tuaolo pointed out that ARPA funds had not been referred to the Fono by the executive branch before it was utilized, a practice which he said would not happen again with the passage of the proposed bill.

The amendment of Section 10.0502 as stated in the bill reads, “Prior to obligating or expending any funds derived from unanticipated revenues exceeding previously appropriated expenditures, the Governor shall submit an appropriation bill to the Legislature specifying the intended use of unanticipated revenues and detailing the proposed allocations.

“Unanticipated revenues include those funds received by the territory from local, federal or other sources that differ from the initial revenue estimates.

“The Legislature may approve, modify or reject the proposal through standard legislative procedures.”

The bill was passed in second reading during the Senate regular session that followed.


Of interest, is that the budget bill when proposed and passed for each fiscal year has a portion of it dedicated to explaining what ‘surplus’ funds are and how they are by law subject to Fono appropriation for expending. It has not stopped administrations from using the surplus funds without Fono approval, and no one has been fired or prosecuted for using the surplus funds as such.

And then there is the problem of what is identified as surplus funds by each administration — in some cases the surplus has not been the result of an ’audit’ which would identify the funds as surplus, i.e. funds not expended during the fiscal year being reviewed, as related to ALL the government departments’ accounts, not just a particular fund, such as the General Fund.