June 22, 2001 FOR IMMEDIATE RELEASE
WASHINGTON, D.C.—ASG MUST PUT FISCAL PLAN OF REFORM IN PLACE OR LOSE OPERATIONS FUNDING
Congressman Faleomavaega announced today that the U.S. House of Representatives has approved fiscal year 2002 funding for American Samoa administered by the Department of the Interior.  The House increased the territory’s operations funding by $97,000 to $23.1 million and retained current funding for construction projects at $10.1 million.  However, the Appropriations Committee report conditions release of at least $1 million of ASG’s operations funding on submission and approval of a plan which will implement operational and fiscal reforms.  The failure by ASG to meet benchmarks or targets contained in the plan at any time during the next fiscal year could trigger additional withholding of federal funds. “As I have noted in recent correspondence to the Governor and Fono members,  this month’s action is one more step in a long line of statements made by Congress over the past decade in an effort to nudge ASG’s finances toward greater stability and balance. Prior steps have included a GAO audit of ASG’s finances in 1992, installation of a computerized financial management system in the early 1990s, a withholding of CIP funds in FY1997, a second withholding of CIP funds in FY1999, a loan to ASG of $18 million in FY1999, and a warning last year that a reform plan was due no later than this year,” Congressman Faleomavaega said. “Last year, the Appropriations Committee expressly stated that it expected to see a fiscal reform plan in place by this time this year.  When ASG failed to meet its obligation, the Appropriations Committee took the next step of placing a conditional release on funding, and the House has approved that action.  Fortunately, ASG has three months before the next fiscal year begins, so it has sufficient time to get a reform plan approved and thereby avoid the initial financial penalty,” the Congressman said. “Although ASG has made progress in developing its reform plan, reports submitted by ASG to the Department of the Interior now suggest that ASG is anticipating an operating loss of $4-$6 million in the current fiscal year.  These reports also indicate that as of March of this year ASG had a general fund deficit in the amount of $39 million, excluding long-term debt.  This information was available to the Members of the House Appropriations Committee prior to their deliberations and undoubtedly was taken into consideration in preparing this year’s report.” “I am sure that the Committee also considered the fact that over the last 15 years, the federal government has generally continued to increase its spending in the Territory.  The only exceptions to this general trend have been in periods following typhoons hitting the Territory, and in those years federal funding has spiked.” “The federal government also continues to provide approximately 75% of ASG’s total funding,” Congressman Faleomavaega said.  “ While recognizing that American Samoa is not the only Territory in financial difficulty, it is the only local government receiving federal funding to assist with the operations of its basic government functions.” “My sense is that as the Members of the Appropriations Committees struggle to allocate funds among many important governmental functions, the long-standing commitment to assist American Samoa is being reevaluated.  Without measurable concrete action which shows ASG’s intent and ability to manage its own affairs, the perception in the Congress is that American Samoa is either taking U.S. taxpayer subsidies for granted thinking they will go on forever, or the elected leaders do not care whether or not the money continues.  I do not believe this to be the case,” Congressman Faleomavaega said, “but I do acknowledge the need for some demonstration of financial stability at this time.”   “I have assured the Governor that I will do all I can to provide additional time for ASG to meet the basic financial management principles expected of public entities receiving federal funds if he believes there are extenuating circumstances which warrant such an extension.  However, it is my expectation that the local government is in position to meet the upcoming deadline,” Congressman Faleomavaega said.  “ASG has over three months to meet the conditions set forth by Congress and I am hopeful that every effort will be made by our local leaders to keep ASG’s existing funding in place.”
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