AMERICAN SAMOA ENDS FISCAL YEAR WITH SURPLUS

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By B. Chen-Fruean and Fili Sagapolutele

PAGO PAGO, American Samoa (Samoa News, Oct. 5) - At the close of fiscal year 2006 last week, the American Samoa Government (ASG) had a "very nice" surplus thanks to aggressive collection efforts by ASG treasurer Velega Savali.

In a telephone interview with Samoa News yesterday, Velega said that when he took the helm as ASG treasurer last year, there was an estimated US$2 million overrun in grants spending alone.

"When I realized that in my position, I could control grant spending, I made sure that strict monitoring and strong enforcement were in place and maintained in order to prevent us from going into the red," Velega explained.

It would seem his efforts paid off because although the final financial report has yet to be finalized, so far there is no indication there has been an overrun in grant spending for FY 2006.

Moreover, Velega says there is a surplus. Some of the surplus can be credited to the nearly US$8 million in cover-over taxes that was collected from local military servicemen and women who claim American Samoa as their home of record. This amount is over two times more than the $3.7 million that was initially projected.

Velega said that collections were down during FY 2006, but the bulk of the surplus was collected from delinquent accounts held by individuals and companies who owed money to the ASG.

He said that he had to become "aggressive" with his collection efforts, going after people who owed money to the government whether it be for bad checks, rent for government properties like the Tafuna Industrial Park, or unpaid services.

"I think the overrun in grant spending in the previous years can be blamed on poor enforcement and control," Velega explained, adding that although he has the power to control grant spending, it is the Budget Office that oversees the spending of local funds.

"I believe that if there is no money in the accounts, then there is nothing to spend, meaning that no purchases should be made," he added.

The ASG treasurer said that misappropriation is perhaps the biggest reason for over spending.

"Sometimes when the money arrives late, people continue to rack up expenditures, in addition to spending money on things that the funds are not allocated for."

He said that grant monies arrive with specifications of what the funds are to be used for. Yet, sometimes the money is noted to be used for food but locals divert it and use the money to buy other things like vehicles.

"If and when the federal government or the funding agency finds out about the misappropriation of funds, the funding will be halted and we won't be receiving anymore money," Velega said. "That's not good for us and we definitely don't want that to happen."

"I believe that with strict monitoring and enforcement, the ASG can enjoy many years free from debts," he added.

Budget overruns for the last two fiscal years have averaged $4 million.

Velega pointed out the biggest overrun belongs to the local Legislature, that needed $830,000 from the supplemental budget to cover their over spending.

In his Oct. 2 letter to acting Governor Sialega, Senate President Lolo claims the Fono's "financial needs were never clearly identified and accommodated since its inception," and "consequently, each year, the Legislature is set up to look irresponsible for overspending its budget allocation in spite of its repeated requests for accurate allocation of financial resources to meet its need."

Lolo said the Fono will overrun its budget every year unless it gets adequate funding.

Sialega line item vetoed certain amendments made by the Fono to the FY 2007 budget bill, which ultimately reduced the Fono's budget from $6.1 million to $5.4 million.

During Monday's Fono session, Sen. Alo Dr. Paul Stevenson asked where the Administration was getting the money from to fund the supplemental budget for FY 2006.

Velega has now answered his question.

At the same Fono session, Senate President Lolo M. Moliga said that it was interesting that the budget overruns have averaged $4 million for the last two fiscal years.

"If the $4 million forecast excess revenues were identified in the initial revenue projections, many of the agencies would not have incurred budget overruns," he said. "The agony and the anguish associated with having to allocate limited financial resources would have been avoided."

He said whether the government takes it seriously or not, the government's financial plan sets the tone for the Territory's economic development prospects.

Speaking briefly to reporters on Monday, Lolo said there is no way to maintain a balanced budget because the budget "is poorly prepared" and almost every agency, including the governor's office, overruns its budget.

He predicts the Fono will continue to see supplemental budget bills every fiscal year because the budget plan is not well prepared, which he says affects services to the community.

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