Cabinet members told to compile 2023 budget documents by May 13

Pago Pago, AMERICAN SAMOA — Because COVID-19 federal funding is “temporary”, cabinet members have been informed not to include these funds in their proposed fiscal year 2023 budget but instead submit the funding separately and have it their possession should there be questions from lawmakers during Fono budget hearings.

This is according to the ASG Budget Call FY 2023 memorandum, dated Apr. 14, from the Office of Program Planning and Budget director, Catherine D. Saelua to cabinet members, as the government prepares for the new fiscal year, which begins on Oct. 1 this year. Absent from the memo is mention of a ceiling amount, which departments and agencies are to maintain for the new fiscal year.

According to Saelua’s memo, copied to the governor and lieutenant governor, the current budget that funds ASG consists of 42% in federal grants and 58% local funds. “For the most part, we rely on limited coffers of local revenues to fund the priorities critical to the growing needs of our people,” she said.

“With that in mind, we have already increased your personnel in the current budget to accommodate all the salary increases as mandated by the governor with minimal and limited funding availability to address your needs critical to your operation,” said Saelua.

(The mandated salary increases by the governor referred to by Saelua went into effect last summer, hiking the ASG minimum wage as well as the reclassification across the board of all salary levels in government.)

She requested cabinet directors to prepare and submit the proposed FY 2023 budget no later than May 13. Upon receipt of the proposals and review by the Budget Office, the directors will be provided a schedule to present their budget proposals, thereby justifying their operational needs.

At last Wednesday’s virtual cabinet meeting, Budget Office deputy director Aukuso Satia reminded directors of the May 13th deadline for budget submission and requested that they construct their budget to prioritize the critical operations of their respective departments/ agencies, among the other guidelines provided by the budget call memo.

LOCAL FUNDS

Cabinet members were informed that the cost of fringe benefits of FICA and Workmen’s Comp are 7.65% and 1.05%, respectively, for both career and contract employees, with an additional 10% government contribution to the retirement fund — bringing the total fringe benefit rate to 18.70% for career service and 8.70% for contract employees.

She explained that the increased amounts in fringe benefits account for the proposed ASG’s retirement contribution of a 2% hike.

Cabinet members were reminded that all fixed costs — utilities, communication, rents, and leases — should also be incorporated into the budget plan.

Prior to the official closing of the Fono’s 3rd Regular Session on Apr. 1, both the Senate and House approved their respective versions of an Administration bill, seeking to increase the total Retirement Fund contribution rate for both ASG and employee from the current 11% to a total of 20.37% in order to reduce the shortfall, which is reported by ASGERF at $9.4 million for Fund-year 2019.

The contribution is staggered out — starting at 10% for the ASG contribution from Oct. 1, 2022 through Sept. 30, 2023. Lawmakers return in July for the 4th regular session. (See Samoa News edition Mar. 31st for an update on the ASGERF contribution story for details).

FEDERAL GRANTS

Directors were told to prepare the proposed budget consistent with the most recent approved federal grant awards and not to exceed authorized amounts in current awards including all grants not listed. A copy of the current grant award is also to be provided with the proposed plan.

“More importantly, because of inflated budgetary numbers and the temporary nature of these grants, we ask that your COVID-19-related grant awards not be included in your FY 2023 proposed submission,” Saelua wrote in the memo. “Rather, we ask that you submit it separately and have it in your possession should the related questions arise from the Legislature.”

Samoa News notes that lawmakers are expected to question departments and agencies on their COVID-19 related funding, especially money received from the millions of dollars from the American Rescue Plan Act of 2021 and how it has been used.

AUTHORITIES

As has been the protocol in recent years, ASG semi-autonomous agencies — or authorities — are to prepare their proposed budget plan for direct submission to the Legislature with a copy to the ASG Budget Office to be included in the main FY 2023 budget document proposal.

ENTERPRISE FUNDS

According the Budget Office, Enterprise Funds are self-sustaining entities funded through generated revenues to support operation and services. Therefore, a profit and loss statement from each enterprise fund account is mandatory to be submitted for the most recent three years.

“It is critical that the proposed operating expenses are subsequently offset by your forecasted sufficient revenue collections,” Saelua pointed out.

In previous Fono budget hearings, lawmakers requested profit and loss statements not only for Enterprise Funds, but for the semi-autonomous agencies, prior to budget hearings.

BACKGROUND

The government’s current FY 2022 budget totals more than $560 million, which includes the supplemental appropriation later approved by lawmakers.

The original budget approved by the Fono in early September of last year, totaled $552.78 million — funded with $110.16 from local revenue; $219.59 million in federal grants; $212.85 million under Enterprise Funds — which included budgets for ASG’s semi autonomous agencies or authorities — and $10.26 million in Capital Improvement Projects.

Towards the end of September, the Fono approved and then acting-governor, Talauega Eleasalo Ale signed into law the Administration’s FY 2022 Supplemental bill of $12.65 million funded with unobligated and unexpended revenues from fiscal years 2020 and 2019.