Gov looks at Emergency Declaration to spend ARPA funds by deadline

Pago Pago, AMERICAN SAMOA — With the deadline to obligate hundreds of millions of dollars in federal COVID-19 relief funds fast approaching, the American Samoa Government (ASG) is reportedly considering declaring a public emergency to expedite spending. The move, if taken, would invoke the Governor’s emergency powers under local law to bypass certain administrative and procurement procedures, allowing for faster allocation of funds.

The proposal comes as ASG struggles to spend its $494.9 million in American Rescue Plan Act (ARPA) funding, awarded by the U.S. Treasury to support pandemic recovery efforts.

According to ASG’s 2024 Recovery Plan Performance Report, as of July 31, 2024, only $29.2 million had been spent — just 5.91% of the total allocation.

This left $465.7 million still unspent, which raised concerns that ASG may fail to meet the December 31, 2024 deadline to obligate the funds, after which any unused money must be returned to the federal government.

The final reallocation list was approved by Governor Lemanu Mauga on December 27, 2024 — before he left office — and the necessary paperwork was routed to ensure all obligation requirements were satisfied.

Healthcare related projects administered by LBJ, SCM and DOH account for nearly $340 million. These projects were the most complex and required the greatest lead time based on design requirements.

The expenditure deadline for the unspent money is December 31, 2026.

Government officials, according to sources familiar with the discussions, believe that an emergency declaration could remove bureaucratic barriers and accelerate spending. However, legal experts and policymakers caution that such a move may not be justified and could expose ASG to unintended financial and political risks.

ARPA Spending Challenges and the Justification for an Emergency

The American Rescue Plan Act, signed into law in March 2021, provided direct federal aid to states, territories, and local governments to address the economic and public health impacts of the COVID-19 pandemic.

For American Samoa, these funds were earmarked for a range of critical projects, including healthcare system improvements, infrastructure upgrades, economic relief for small businesses, and essential public services.

The largest portion — $300 million — was originally allocated for healthcare investments, including the construction of a new 36-bed hospital in Tafuna, expansion of LBJ Tropical Medical Center, and development of mental health and community health centers.

However, prior to the December 31, 2024, commitment deadline, $186.5 million of the funds initially set aside for the Tafuna hospital project was reallocated to other programs, including $30 million for LBJ facility improvements, $11.3 million for behavioral health initiatives, $20 million for water distribution improvements, $40 million for public building renovations, $20 million for port infrastructure upgrades, and $15 million for broadband expansion, among other projects. These reallocations significantly altered the scope of American Samoa’s original ARPA healthcare investment strategy while continuing to fund essential infrastructure and public service improvements.

Despite these planned investments, progress has been slow.

According to ASG’s own report, the delays stem from project management challenges, procurement issues, and bureaucratic hurdles rather than a lack of available funding. Some projects have been stalled due to land acquisition issues, environmental reviews, and contractor selection processes, while others have suffered from administrative backlogs and delays in regulatory approvals.

With time running out, some within ASG believe that declaring an emergency under American Samoa Code Annotated (ASCA) § 26.0105 could provide a legal basis for streamlining decision-making, cutting through red tape, and ensuring that the funds are fully obligated before the deadline.

THE LEGAL DEBATE: IS AN EMERGENCY JUSTIFIED?

Under ASCA 26.0105, the Governor has the authority to declare an emergency when there is an imminent threat to public health, safety, or economic stability. This would allow ASG to mobilize resources, reallocate funding, and bypass certain administrative procedures in the interest of protecting the community.

Proponents argue that an emergency declaration would allow ASG to fast-track contract approvals, accelerate infrastructure projects, and ensure that ARPA funds are put to use before the deadline expires. Given the significant delays in fund allocation, they believe such a step is necessary to prevent the loss of millions in federal aid that could otherwise benefit the territory.

However, legal experts question whether the current situation meets the legal definition of an emergency.

The federal COVID-19 public health emergency officially ended in May 2023, and there is no ongoing public health crisis or sudden economic downturn in American Samoa that would justify extraordinary measures. While the delays in spending are a serious concern, they are largely administrative in nature and not the result of an unforeseen disaster or crisis.

“There’s a difference between an emergency and a management issue,” said one legal analyst who spoke with Samoa News on condition of anonymity. “An emergency declaration is meant for situations that pose an immediate threat to public health or safety. The slow expenditure of ARPA funds is not an emergency — it’s a matter of bureaucratic inefficiency. That should be addressed through better planning, not through emergency powers.”

Others warn that an emergency declaration could set a troubling precedent. If ASG uses emergency powers to bypass normal budgeting and procurement rules without a clear, imminent crisis, it could lead to legal challenges and federal scrutiny.

FEDERAL COMPLIANCE RISKS AND POTENTIAL CONSEQUENCES

Declaring an emergency would not change the federal ARPA spending deadlines, nor would it guarantee that funds are spent more effectively.

The U.S. Treasury has strict guidelines governing how ARPA money can be used, and any reallocation or redirection of funds outside of approved projects would require Treasury approval.

A rushed spending spree under emergency powers could also trigger federal audits and oversight investigations. The U.S. Treasury has already warned jurisdictions against misusing ARPA funds, and any violations could result in ASG being forced to repay millions in federal grants — a financial burden that the territory cannot afford.

Moreover, an emergency declaration could lead to less transparency and oversight in how funds are spent.

Normal procurement processes ensure that contracts are competitively bid and properly vetted, reducing the risk of waste, fraud, and abuse. Suspending these procedures under an emergency could create opportunities for no-bid contracts, potentially benefiting politically connected contractors at the expense of public accountability.

Former government officials familiar with ASG’s procurement process raised concerns about the political and ethical implications of such a move.

“If an emergency declaration allows contracts to be awarded without competition, it opens the door to favoritism and mismanagement,” said one former senior official. “That’s a recipe for trouble, both legally and politically.”

POLITICAL IMPLICATIONS AND PUBLIC REACTION

Beyond the legal and financial risks, an emergency declaration could also create political tensions within the territory. The Fono (Legislature of American Samoa) may push back against any attempt by the Governor to circumvent normal legislative oversight, arguing that ARPA spending should be managed through existing legal and budgetary processes.

Public perception is another factor.

If residents believe that ASG is using emergency powers to cover up mismanagement, it could erode trust in government institutions. Many community members have expressed frustration over the slow progress of ARPA-funded projects, particularly those related to healthcare and infrastructure, and may see an emergency declaration as a last-minute attempt to fix problems that should have been addressed earlier.

One local business owner, who had applied for an ARPA-funded small business loan but has yet to receive approval, questioned the necessity of an emergency. “If the government had spent the money wisely from the beginning, we wouldn’t be in this situation,” they said. “Now they want to declare an emergency just to spend money faster? That doesn’t sound right.”

CONCLUSION: A QUESTION OF ACCOUNTABILITY, NOT EMERGENCY

With only months left before the ARPA obligation deadline, ASG faces mounting pressure to accelerate spending. However, an emergency declaration is not a guaranteed solution and carries significant legal, financial, and political risks.

Rather than relying on emergency powers, ASG may need to focus on improving its financial management, streamlining its procurement processes, and ensuring better coordination between agencies.

The real issue at hand is not an emergency — it is the efficient and responsible management of public funds.

As the deadline looms, the question remains: Will ASG take the necessary steps to ensure that ARPA funds are properly utilized, or will millions be left unspent due to bureaucratic delays?

One thing for sure is that the people of American Samoa will be watching closely, it is after all “new management” which made promises that the community is waiting with bated breath to see kept.