Hearings for FY 2025 budget begin despite questions on local revenue

Pago Pago, AMERICAN SAMOA — Government Treasurer Malemo Tausaga and Budget Director Catherine Saelua appeared again before the Senate and House Budget and Appropriations Committees yesterday after the first hearing for the FY 2025 proposed budget on Monday was suspended before any discussion could be made.

This was due to strong disagreement between Fono members and the two top government officials concerning the Local Revenue projected amount of $165,907,000 which is one of the proposed budget's four funding sources.

The other three are Federal Grants which total $282,683,500 million, Enterprise Funds amounting to $274,463,000 million and CIP Funds totaling  $10,629,667 million. Added together, the four make up the FY 2025 proposed budget total of $733,683,167 million.

Senator Magalei Logovii, a former treasurer, said collection figures for the nine months previous indicate that there is no way the government can collect $165.9 million as it is projected for FY 2025.  He said the more realistic amount is $139,728,596 million — possibly $140 million — but no way could they collect $165.9 million.

Committee co-chair Senator Utu Sila Poasa moved a motion to postpone deliberations on the budget until they met with the witnesses to work out a more feasible budget. He argued that the budget cannot be based on uncertain projections and it was something that must be cleared.

Senators Malaepule Saite Moliga and Soliai Tuipine Fuimaono supported the motion and moved to suspend the hearing and allow the Chairmen of the joint Budget and Appropriations Committee Senator Utu and Faipule Vailoata Amituanai to discuss the local revenue portion of the budget.

The House Speaker and Senate President reminded the witnesses that the reason why local revenues reached $165 million in the FY 2024 budget, was due to the $22 million supplemental appropriations.

Speaker Savali Talavou Ale said it was necessary to come up with a realistic budget and they needed to resolve the local revenue portion, otherwise, they would approve an amount that cannot be achieved and government operations would be affected.

He also expressed his displeasure at the committee chairmen for making decisions concerning the budget and argued that it’s the Fono's prerogative.

The matter was put to a vote and the majority voted in favor of suspending the hearing. It was agreed that the Treasurer and Budget Director would meet with the two co-chairmen afterward to discuss the best course of action.

However, the two government officials left after the hearing was suspended.

In yesterday's hearing, Senator Utu announced that their proposed meeting with the Treasurer and Budget Director which had been determined by a majority vote of lawmakers present the day before, did not eventuate.

Utu stated that it was something that must be pursued because it was a decision reached by a majority vote of Fono members and that it would only take at most, five minutes before the budget hearings proceed.

The committee co-chair mentioned the $36 million surplus already spent by the administration without Fono approval, and he said it was in the past now.

However, he pointed out that $22 million remains and he doesn't want these surplus funds used to fill a shortfall created when local revenue collections fail to come up with the projected amount of $165.9 million after passage of the FY 2025 proposed budget.

Utu said this is why the government budget is inflated because they keep on using supplemental funds to fill shortfalls, and the same thing is being done every fiscal year. He declared that he was determined to put a stop to this practice.

He reminded that the law stipulates that all unbudgeted revenue received during Fiscal Year 2025 shall not be expended for any purpose unless first authorized and appropriated by the Legislature.

Senator Utu also commented that the difference in the government's projected local revenue amount of $165.9 million and the Fono's projected $139.73 million is not a small amount.

He said if there was a shortfall, he would not hesitate to use the $22 million surplus funds. However, it should be done first and all required rules and regulations must be followed, then move forward with a clean conscience.

He then gave Treasurer Malemo the chance to comment on the matter.

After acknowledging the Fono leadership and members of both chambers, Malemo stated, "I have no further words to say. The American Samoa Government's proposed budget for FY 2025 is before you. With due respect."

Utu then asked if the Treasurer agreed with what he had just explained or did he want to proceed with what they submitted.

Malemo reiterated, "As I said, the American Samoa Government's proposed budget for FY 2025 is before the honorable members of the Fono. With due respect, whatever changes you want to make, we will accept."

Utu then announced the start of the FY 2025 budget hearings beginning with the Budget Office.

According to Budget Director Catherine Saelua, the total amount of the Budget Office's proposed budget is $1,175,000.

Personnel - $925,000

Supplies - $30,100

Contractual Services - $50,000

Travel - $35,000

Equipment - $60,000

All Others - $70,000

TOTAL: $1,175,000

Staff members - 14

Senator Magalei Logovii said he had just one question and asked Saelua how many vehicles her office had. She answered they had three vehicles. Magalei then moved a motion to excuse the witness and pass the Budget Office budget.

Senate President Tuaolo Manaia Fruean seconded the motion commenting on the fact that there was no change in the number of employees from last year.

The Treasury Department's proposed budget was reviewed next.

Treasurer Malemo stated that the total amount of $11 million for FY 2025 is the same as the current fiscal year.

He revealed that there are three additional employees in his department. The Administrative Assistant who was a part of his staff has now been transferred to the Finance Office, and two more Customer Officers have been hired which brings the number to three.

Senator Utu asked if there was a Comptroller to which Malemo replied that there is currently no comptroller and that they have advertised the vacancy every year without success.

The Treasurer stated that it is a very important position that demands a salary of more than $200,000. He said a potential candidate had been interviewed last year and had agreed to take on the job. However, he pulled out at the last minute due to unforeseen circumstances.

Utu pointed out that this was a very important position and Treasury needed to hire a qualified comptroller to monitor the department's financial responsibilities, especially with federal funds.

Other government departments whose budgets were reviewed yesterday include the Department of Public Safety, Samoan Affairs, Governor’s Office and Legal Affairs.

BACKGROUND

Samoa News should point out that the proposed FY 2025 budget document does not seem to list the $36 million the Administration spent without Fono approval, and became a supplemental passed in FY 2024. It’s not seen in the Supplemental for FY 2024, 2023 or 2022. Other figures for the supplemental are also puzzling, as they do not seem to add up if one takes a look at all the supplementals that were passed by the Fono, whether unbudgeted revenues or surpluses of FY 2024, 23 or 22.