L&L Platform

Financial Outlook and Highlights

Since 2021, the Lemanu La’apui administration has faced unparalleled global health challenges, environmental vulnerabilities, weather and climate anomalies, and the critical task of sustaining our territory's financial and economic stability. Our commitment to prioritizing the needs of our people has remained steadfast despite numerous difficulties. The unity among our Fono, local, and federal partners has been truly remarkable. Effective leadership requires translating a shared vision into action.

Over the past three years, we have prioritized the welfare of our people by implementing a comprehensive plan to expand healthcare access and services, enhance the educational system, strengthen infrastructure (including clean water and broadband capacity), improve accessibility to government services, undertake critical climate vulnerability and mitigation projects, and advance sustainable and renewable energy projects.

Providing a safe and improved quality of life for our people necessitates a commitment to revenue integrity to support these crucial investments in our territory. Demonstrating our fiscal health, ASG’s fund balance at the end of FY2023 was over $64 million. This fiscal health ensures that the initiatives aimed at improving our communities will be realized, as evidenced by numerous projects completed in 2023 across sectors such as education, healthcare, infrastructure, and social services.

The 2022 ASG Single Audit and Financial Audit reports indicate that the territory’s fund balance has significantly improved over the years, showing a 33% increase from 2021 to 2022 and an 88% increase from 2020 to 2022. The 2023 audit financials continued this positive trend with a surplus of $16.4 million. Since 2012, under both the previous administration and the current Lemanu La’apui administration, ASG has recorded a year-end surplus in the General Fund in nine of the past ten fiscal years.To navigate these challenges, both identified federal funding opportunities and local appropriations have greatly supported the completion of these initiatives. Maintaining this momentum is crucial as we deploy and implement the remaining projects focused on our people and community. As we confront the urgent needs of our territory, we will continue to mobilize every resource to ensure a safer, more resilient, and disaster-ready American Samoa.

Sound fiscal management, budgetary compliance, and audits are priorities for the administration. Ongoing audits and engagements will remain a commitment to ensure accountability. The administration will proceed thoughtfully yet steadily, continually reevaluating our financial position to maintain a steady revenue stream, and develop both short- and long-term solutions to our financial health, addressing these challenges in a measured and fiscally responsible manner. 

Supplemental Appropriation $36 million

A testament to these priorities is evident in the increased revenue collections exceeding projections. The appropriations primarily supported emergency infrastructure projects necessitated by COVID-19, the King Tides of July 2022, and the Earthquake Tremors of August 2022. Initial damage assessments identified a need for more than $60 million to restore and ensure our people’s access to hospitals, schools, churches, and the broader community, as well as to provide shoreline protection.

While the administration applied for federal funding opportunities, these federal dollars are still awaiting approval from our federal partners. When external responses are delayed, local funding solutions must take the lead for our people. Work was initiated to ensure the safety and well-being of our community, which was urgently seeking government assistance.

Approximately $20 million was utilized for emergency response and climate resiliency projects, including access roads and other improvements for safe transportation and emergency routes, such as:

• ECE Multipurpose Access Road
• Tafuna Elementary Access Road
• Alofau to Tula Road Improvements
• Fagaalu Pedestrian Footbridge
• Faleasao Access Road
• Fatuma Futi Retention
• Fogagogo Access Road
• Maliu Mai Access Road
• Ofu & Olosega Bridge Rail
• Poloa Access Road
• Tafeta Access Road
• Fitiuta National Park Road

Approximately $9 million was allocated for seawall and shoreline protection against king tides, rising sea levels, natural disaster events, and community parks and buildings across Tutuila and Manu’a, including:

• Nuuuli Shoreline
• Asili Seawall
• Amouli Shoreline
• King Tide Debris
• Laulii Shoreline
• Olosega Seawall
• Fagaalu Stream
• Lions Park
• Fagaalu Park
• Vaitogi Park

Additionally, funds were allocated for other critical needs:

• $2.5 million in local match to Federal Medicaid dollars to fund lifesaving healthcare services
• $1.5 million to reimburse COVID funds used to purchase MV Pago Pago
• $2 million investments in salary adjustments for faculty at American Samoa Community College
• $1 million toward the Summer Youth Employment Program

The support of our esteemed legislative leaders has played a crucial role in ensuring a legacy of prosperity and well-being for our Territory. The negative impacts of not passing this critical legislation would have had long-lasting detrimental effects on the integrity of our territory. The safety and welfare of our people and territory will always be our priority, driven by our unwavering Alofa. Critical infrastructure projects across the Territory would have been left unfinished, impacting businesses and the economy. Delayed payments for critical infrastructure projects could have led to financial instability, costly inefficiencies, and a breakdown of vital services.

Debt Service (DS) Compliance 

This is managed by the American Samoa Economic Development Authority (ASEDA) and continues to comply with timely payments to investors.

As of March 1, 2024, the American Samoa Government has made all its bond debt obligations. The territory has made 17 payments, for a total of $87,941,539.20 of debt service payments to its investors as required. 

Use of bonds to fund critically needed territorial infrastructure projects and programs, including:

• Hawaiki Cable (broadband and internet speed and access)
• Territorial Bank of American Samoa (TBAS)
• OneSolution system
• Manuatele vessel for interisland transportation
• New Fono Building
• New High Court Building
• MV Manu’atele and others

Compliance, U.S. Government Accountability Office & U.S. Treasury Office of Inspector General (OIG) Audit

With the increase in available federal funding to the American Samoa Government, the Lemanu-La’apui Administration continues to concentrate its efforts on ensuring these funds are spent in accordance with federal and local procurement policies and procedures. ASEDA prioritizes and is committed to completing audits in a timely manner to support the territory’s credibility and governance accountability.

Ensuring budgetary compliance is a top priority for the Lemanu-La’apui Administration. Cost-saving measures will be implemented to address any shortfalls or improper expenditures. Weekly compliance review meetings are conducted annually to ensure adherence to budgetary guidelines and to institute corrective measures for any non-compliance issues. The Administration remains vigilant in resolving audit findings and incorporating recommendations for improvements.

U.S. Treasury Office of the Inspector General Audit

This year marks the ongoing audit of over three (3) and a half years since July 2020. Required submissions to the U.S. Department of Treasury Office of the Inspector General, as part of the audit of the $35 million Coronavirus Relief Fund (CRF) received under the previous administration, were provided and are ongoing.

Currently, one of four reports, the first interim report, is complete; three additional reports will be forthcoming once the review is complete, and the targeted completion date is September 2025. Interim Report #1 identified questioned costs over $9 million, including access roads, the purchase of MV Pago Pago, school improvements, DPS vehicles, TBAS, the Visitors Bureau, and others. 

U. S. Government Accountability Office (GAO)

Audits, reviews, and engagements are facilitated through requests by congressional committees or subcommittees or are mandated by public laws or committee reports. These reviews provide Congress, leaders of U.S. executive agencies, and the public with timely, fact-based, non-partisan information. The territory has undergone a total of five engagements.

Engagement 106045 

Territorial Debt Engagement results from the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which requires the GAO to review public debt for each U.S. territory every two years. This is our fifth engagement since PROMESA's passage. Highlights from the current 2023-2024 report include the following:

Engagement 106050 

COVID-19 Relief Funding to U.S. Territories, as mandated in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, reviewed what the territory received and how the funds were utilized. The COVID-19 GAO report focuses on four key areas: leveraging pre-existing programs, technical assistance, funding flexibilities, and immediate available funding. Leveraging existing programs faced fewer challenges due to readily available technical assistance from federal counterparts. The flexibility of federal funding to address the unprecedented global pandemic was crucial, and the immediate availability of funds, rather than waiting for reimbursements, contributed to the successful deployment of safety measures to protect the territory and its citizens from the deadly effects of the virus.

Engagement 106236

Indo-Pacific Climate Change Risks, pursuant to a congressional committee chair's request, evaluates how U.S. government departments and agencies have supported the analysis of climate risks and their effectiveness and actions. This engagement is ongoing as we await additional requests for information and documentation.

Engagement 106574 

Federal Collection of Data from U.S. Territories, in response to a U.S. House of Representatives Natural Resources and Delegates request, reviews recent 2020 Census data collection on population decline. Challenges in data collection have heightened concerns about the unique and disproportionate difficulties in obtaining quality federal statistics related to the territories. Initial documentation, including Statistical Data from the Commerce Department and Vital Statistics, has been provided to the GAO.

Engagement 106670 

AMBER Alert Expansion, mandated under the William M. (Mac) Thornberry National Defense Authorization Act 2021, reviews the expansion of AMBER Alert efforts to eliminate gaps at airports, maritime ports, border crossing areas, and checkpoints. This engagement ensures the U.S. Department of Justice (DOJ) provides the required assistance and support to U.S. territories.

US Department of Education Risk Compliance 

The US Department of Education's High-Risk designation and semiannual reporting are an ongoing audit. The High-Risk Task Force (HRTF) has complied with all reporting requirements to the US Department of Education Risk Compliance to address long-standing high-risk items. 

Territorial Audit Office 

The Territorial Audit Office’s audits and reviews focused on preventing and detecting fraud, waste, and abuse and improving the effectiveness, efficiency, and economy of government operations.

The Association of Pacific Islands Public Auditors (APIPA) held its 33rd annual conference, hosted virtually by the Federated States of Micronesia and held in person in the territory. More than 500 government financial accountability officials attended from all the Insular Areas and beyond.

The APIPA conference provided auditing and financial accountability officials training, allowing participants to receive up to 20 hours of Continuing Professional Education (CPE) credits. Government auditing standards require these credits for auditors to maintain their professional competency.

Courses during the conference were delivered in Plenary, Audit, and Finance tracks. Over 507 participants joined the conference, expanding their skills in government auditing and financial standards, audit report writing, grants management, leadership, risk management, and internal controls. In total, more than 2,785 course certificates were awarded for 7,028 credit hours.

The Ethics Officers Training 

The Pacific & Virgin Islands Training Initiatives (PITI-VITI), supported by the U.S. Department of the Interior’s Office of Insular Affairs and administered by Graduate School USA, conducts annual government-wide training for ASG Departments and Agencies. All designated ASG ethics officers are required to attend the training. The Ethical Decision-Making for Governmental Employees course was tailored to the unique needs of American Samoa, incorporating both general ethics concepts and the specific legal codes and relevant ethics legislation in the Territory. 

The annual training offers training and instruction, providing each ethics officer with eight Continuing Professional Education (CPE) credits. The ethics officers participating in the training session helped push forward government efforts to improve its ethics-based approaches to decision-making in American Samoa’s government.

The annual training sessions and outreach supported through the partnership with OIA and Graduate School provide the training and outreach support, this continues to remain a priority of the administration. 

Compliance Review Committee (CRC)

Accountability and integrity are the cornerstones of this administration and, by extension, the Compliance Review Committee (CRC). To stabilize the financial conditions, the administration has enforced the continued integrity of revenues to sustain government operations, coordinated efforts with midyear budgetary oversight and review, addressed audit recommendations, and implemented corrective actions as provided by the Office of Inspector General (OIG) Audit Office of Insular Affairs (OIA) Vehicle Audit and Government-Wide Audit, including the US Department of Education (USDE) High Risk Audit.

Ensuring budgetary compliance is a core priority of this administration. Cost-saving measures have been implemented in response to any shortfalls or improper expenditures. A foundation of integrity is upheld through a conscientious ethical code of conduct. The Governor has issued Executive Order 008-2021, establishing a Code of Ethics based on the principles of integrity and commitment. Each agency is required to have an ethics officer assigned to work with the Chief Ethics Officer.

The CRC continues to review tax reform policies and analyze the territory's fiscal situation. Key points include:

• Addressing the longstanding issue of the outdated 2000 Tax Table and rates.
• Allowing taxpayers to reduce their individual and corporate tax liability.
• Enabling individuals to have more money in their paychecks through tax amendments.
• Reducing corporate tax liability on profits by nearly one-third (estimated).
• Repealing the 2% wage tax, resulting in a 33% reduction in tax liability for the lowest earners (an estimated annual $3 million loss to ASG revenues).
• Implementing a Gross Receipts Tax (GRT) to replace lost revenue and equitably collect needed funds for key governmental services.
• Updating the Tax Information Management System (MOANA), which offers many benefits for taxpayers and ASG and is long overdue.
• Preparing ASG for a return to pre-COVID funding and revenue levels.
• Ensuring ASG can fund increases for key personnel sectors, including teachers and professionals (attorneys, engineers, etc.).
• Addressing upcoming challenges, such as expected increases in federal matching requirements for Medicaid and other federal programs.
• Introducing new individual and corporate tax rates and a Gross Receipts Tax.

While proposed legislation and implementation plans are designed to address significant fiscal challenges, they remain untested and lack actual data to determine their true effectiveness. The CRC will maintain open dialogue with the business community and legislative leaders to ensure all concerns are reviewed and resolved before proposals are submitted to the Fono for appropriate review and passage.

Weekly compliance review meetings are conducted throughout the year to ensure the government complies with budgetary guidelines and institutes corrective measures as non-budgetary concerns and findings arise. As we await the outcomes of ongoing OIG audits, the administration must be ready with recommendations to align with any decisions. 

Closing Statement

Since 2021, the Lemanu & La’apui administration has navigated unprecedented global health challenges, environmental vulnerabilities, and financial uncertainties with steadfast dedication to the welfare of our people. Our administration has prioritized expanding healthcare access, enhancing education, strengthening infrastructure, and advancing renewable energy projects. With sound fiscal management and strategic investments, we have significantly improved the territory’s financial health, ensuring a fund balance of over $64 million at the end of FY2023.

The collaboration with federal and local partners has been instrumental in achieving these milestones. Despite the challenges, our effective leadership has translated shared visions into tangible actions, resulting in numerous completed projects across various sectors. The administration’s commitment to accountability, integrity, and fiscal responsibility is evident in our compliance with audits and ongoing efforts to address improvement recommendations.

These past years have reinforced our core beliefs and validated the foundation supporting our administration. While not every decision has been perfect or yielded the expected outcomes, each choice was rooted in the belief that our actions were for the love of our people and the overall common good. The Lemanu & La'apui administration will continue to support our community, uphold sound fiscal policies, and ensure that every initiative contributes to our territory's overall well-being and sustainability.