SSIC learns that ASG’s General Fund covered shortfall of returned $4.4 Mil without Fono authorization

Pago Pago, AMERICAN SAMOA — During yesterday's inquiry into the $4.4 million of government funds erroneously transferred to Wells Fargo Bank last year, Treasury officials informed the Senate Select Investigative Committee (SSIC) that more than $100,000 from ASG's General Fund was used to cover the amount owed to LBJ Hospital.

Responding to Committee Chairman Senator Togiola T.A. Tulafono, Treasury accountant Akenese explained that the total amount of $4,474,207.09 was erroneously transferred from the ASG account at the Territorial Bank of American Samoa (TBAS) to Wells Fargo Bank, based on instructions from what was later discovered to be a fake email.

This amount came from a Medicaid reimbursement of $3.3 million and over $957,000 reimbursement from FEMA for LBJ Hospital.

She stated that from that total amount, Wells Fargo Bank has returned $4,373,997.02, leaving a balance of just over $100,000.

Asked what had become of that $100,000, Akenese replied that it was currently under FBI jurisdiction.

"What do you mean by 'under FBI jurisdiction'?" Togiola pressed.

"We were able to get most of the money back except for that $100,000 and when we reached out to TBAS, they reached out to Wells Fargo but Wells Fargo wasn't forthcoming with why they didn't receive that amount, so we reached out to the FBI if they could find out (why),” Treasury Chief Accountant Carrie-Lee Magalei explained.

She said that their most recent contact with the FBI was a week ago, and they were informed that the matter was still under investigation.

According to Magalei, $957,192.75 was returned after two weeks. However, when Wells Fargo returned the other payment, it was $3.4 million instead of $3.5 million, leaving a shortfall of $100,220. This amount was received in December last year.

Togiola mentioned that according to testimonies of LBJ top officials, the Treasury has returned the full amount of $4,474,207.

"You were here when the LBJ officials testified, do you remember?" Togiola asked.

"We paid them the full amount, but we did not receive the full amount from Wells Fargo," Magalei replied.

"Where did you get the $100,000 to give to the hospital?" Togiola asked.

Chief Accountant Magalei explained that they had used money from the ASG General Fund to cover the shortfall.

When Togiola asked how they were able to use money from the General Fund without an appropriation from the Fono, Magalei referred the question to Treasurer Malemo Tausaga.

Treasurer Tausaga confirmed that they had used the ASG General Fund to cover the shortfall in the LBJ funds without appropriation authority from the Fono.

Togiola expressed his concern that basic rules and regulations of government financial procedures were either blatantly violated or overlooked due to a lack of understanding by staff members entrusted with managing government finances.

He highlighted that there were already standard operating procedures in place to guide their transactions.

However, they took on face value an email instructing them to transfer a significant amount of government funds without verifying the authenticity of the sender or the instructions.

The Treasury Chief Accountant acknowledged their failure to recognize the seriousness of the situation and to prevent their current predicament.

However, she assured the committee members that they have since implemented policy changes. One such change is that they now personally contact the individual making the request for changes to verify its authenticity.