Governor calls for a budget approach with ‘real numbers’ to deal with ‘real issues’

Gov. Lolo Matalasi Moliga says the government will never be able to catch up with paying its bills because of the way the current ASG system is set up and he is looking into sending to the Legislature a supplemental appropriation for the current fiscal year 2017.

The governor’s comments were made at last Friday’s cabinet meeting, following American Samoa Power Authority executive director Utu Abe Malae’s remarks on the planned layoffs next year, or a reduction in work hours, due to their high payables and current inability to catch up paying these bills to vendors and suppliers. (See yesterday’s Samoa News edition on ASPA update on layoffs.)

“There was never a time that the government was able to catch up with its bills or debts, [because] it’s due to a lot of reasons,” Lolo said at the cabinet meeting after Utu’s remarks. For example, Lolo said the local government has big differences compared to the federal government, which “has a check book, with money.”

He explained that once the federal government’s budget is set, the US Treasury will write a check to that account, but for ASG, “not only do we not have a currency but we don’t have the resources they (the feds) have. That’s why there’s always a delay in terms of paying our bills.”

According to the governor, when the budget is approved for the new fiscal year, commencing on Oct. 1, “our first job is to collect that money that’s been budgeted and proposed. That’s why we don’t pay our subsidies on time, that’s why we don’t pay our bills on time, because we have to collect before we pay.”

Lolo reiterated, “We cannot compare ourself to the federal government — once they have the obligation, they write a check, deposit it in the account and they pay; but for us, when we make an obligation, we have to collect the money. That’s why we will never be able to catch up with the system that we are using today.”

“We will never be able to pay our bills on time,” he declared, “because the way our budget is set up — we approve the numbers on paper, then we collect all the way up to the end of the fiscal year.”

“If we collect, good. If we don’t, we have to adjust. That’s why subsidies will never be paid in full,” Lolo said and revealed that, “In fact, I’m prepared to submit a supplementary request to the Fono to make adjustments to our budget this fiscal year, just to make sure, to avoid the unnecessary confusion currently in government.”

(ASG subsidies are paid out to some semi autonomous agencies, such as LBJ hospital and the American Samoa Community College, and to other revenue making ASG entities, such as the Airport Division.)

While the governor didn’t elaborate further on the “unnecessary confusion”, Lolo did say that he has informed ASG Treasurer and ASG Budget Office director that starting this year, “we will be changing our budget approach to make sure that we deal with the real numbers, so we can deal with real issues.”

“The approach we have been using... in the last four years, we inflate the numbers to make sure that we’re able to move around those numbers and make and develop programs that serve our people,” he said.  “That’s why we’re able to pave some of the roads; that’s why we’re able to build some of the schools, that’s why we’re able to repair a lot of things we’re doing today.”

“So in the next four years, it will be different and our approach will be different and that’s why I’m counting on you, to start within your department, your responsibility to make sure that we follow the guidelines,” he said, and reminded his cabinet that since the administration took the reins of government in January 2013, cost containment measures have been implemented and remain in place today.

“Our economic outlook is very difficult and we all know why,” the governor said, but didn’t give the reasons. “We cannot blame ourselves for that, it’s just the way we are, so we have to be creative, think outside of the box... so we can at least work around those issues and those challenges, so our people can survive.”