[Special Report on the Status of Improvements in Financial Management and Program Operations, American Samoa Government]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 96-I-206

Title: Special Report on the Status of Improvements in Financial
       Management and Program Operations, American Samoa Government


Date: December 22, 1995

                  **********DISCLAIMER**********

This file contains an ASCII representation of an OIG report.  No
attempt has been made to display graphic images or illustrations. 
Some tables may be included, but may not resemble those in the
printed version.

A printed copy of this report may be obtained by referring to the
PDF file or by calling the Office of Inspector General,
Logistical Services Branch at (202) 219-3840.
                  ******************************

U.S. Department of the Interior
Office of Inspector General

SPECIAL REPORT

STATUS OF IMPROVEMENTS IN
FINANCIAL MANAGEMENT
AND PROGRAM OPERATIONS,
AMERICAN SAMOA GOVERNMENT
REPORT NO. 96-I-206
DECEMBER 1995

MEMORANDUM                                 

TO:       The Secretary

FROM:     Wilma A. Lewis
          Inspector General

SUBJECT SUMMARY: Final Special Report for Your Information - "Status of
Improvements in Financial Management and Program
Operations, American Samoa Government" (No. 96-I-206)

Attached for your information is a copy of the subject final special report.

This report summarizes major long-standing problems in financial management and
program operations of the American Samoa Government identified in audit reports;
recognizes the corrective actions taken by the Government and the Office of Insular
Affairs (formerly the Office of Territorial and International Affairs), U.S.
Department of the Interior, to address those problems; and provides the Government
with suggested goals and corrective actions against which the Office of Inspector
General can measure future improvements.

Although the Government has made improvements in financial management,
expenditure control, revenue collection, and program operations, further
improvements are needed. We believe that the Government can achieve reasonable
performance improvement goals in these four functional areas by working with
Insular Affairs to identify priorities for future technical assistance and by
implementing the recommendations made in previous audit reports.

If you have any questions concerning this matter, please contact me at 208-5745.

Attachment


N-SP-AMS-O08-94

The Honorable A. P. Lutali
Governor of American Samoa
Office of the Governor
Pago Pago, American Samoa 96799

Dear Governor Lutali:

Subject:  Special Report on the Status of Improvements in Financial Management
and Program Operations, American Samoa Government (No. 96-I-206)

This report (1) presents a summary of major long-standing problems in financial
management and program operations of the American Samoa Government identified
in audit reports; (2) recognizes the corrective actions taken by the Government and
the Office of Insular Affairs, U.S. Department of the Interior, to address some of
those problems; and (3) provides the Government with suggested goals and
corrective actions against which the Office of Inspector General can measure future
improvements.

We concluded that although the Government has made improvements in financial
management, expenditure control, revenue collection, and program operations,
further improvements are needed. By working with appropriate Federal agencies to
identify priorities for future technical assistance and by implementing our many audit
recommendations, the Government can achieve significant improvements in these
four functional areas.

Because this report does not contain any recommendations, a formal response is not
required. However, if you have any questions regarding this report, please contact
Mr. Peter J. Scharwark Jr., North Pacific Regional Audit Supervisor, at (671) 472-7279




Sincerely,
Judy Harrison
Acting Assistant Inspector General
for Audits

CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PURPOSE AND SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  PRIOR AUDIT COVERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART I- IDENTIFIED PROBLEM AREAS . . . . . . . . . . . . . . . . . . . . . .

  FINANCIAL MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  EXPENDITURE CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  REVENUE COLLECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  PROGRAM OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II- CORRECTIVE ACTIONS TAKEN . . . . . . . . . . . . . . . . . . . . .

  AMERICAN SAMOA GOVERNMENT . . . . . . . . . . . . . . . . . . . . .
  OFFICE OF INSULAR AFFAIRS . . . . . . . . . . . . . . . . . . . . . . . . . .

PART III - FUTURE GOALS FOR IMPROVEMENT . . . . . . . . . . . . . . .

  FINANCIAL MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  EXPENDITURE CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  REVENUE COLLECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  PROGRAM OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

APPENDICES

1. OFFICE OF INSPECTOR GENERAL REPORTS . . . . . . . . . . .
2. TERRITORIAL AUDIT OFFICE AUDIT REPORTS . . . . . . . .

INTRODUCTION

PURPOSE AND SCOPE

The purpose of this report is to: (1) present a summary of long-standing problems
in financial management and program operations of the American Samoa
Government identified in audit reports; (2) recognize the corrective actions taken by
the Government and the Office of Insular Affairs (formerly the Office of Territorial
and International Affairs), U.S. Department of the Interior, to address some of those
problems; and (3) provide the Government with suggested goals and corrective
actions against which the Office of Inspector General can measure future
improvements. The report is presented in three major sections that correspond to
the report's objectives.

The report was compiled from significant audit reports issued from October 1, 1982,
to September 30, 1995, by the Office of Inspector General, U.S. Department of the
Interior (Appendix 1); the U.S. General Accounting Office; the American Samoa
Government Territorial Auditor (Appendix 2); and independent public auditors.
This report emphasizes audit reports issued since June 1986, the end of the period
covered in our prior summary reportl of March 1987. This information was
supplemented by discussions with officials of the American Samoa Government and
the Office of Insular Affairs and by audit followup data maintained by the Office of
Inspector General.

Our compilation was made, as applicable, in accordance with the "Government
Auditing Standards," issued by the Comptroller General of the United States.
Accordingly, we included such tests of records and other auditing procedures that
were considered necessary to achieve the reporting objectives.

BACKGROUND

American Samoa is an unincorporated territory of the United States. The American
Samoa Government has a popularly elected Governor, a bicameral Legislature, and
a High Court. American Samoa is represented in the U.S. House of Representatives
by a popularly elected Delegate to the Congress. The Government is organized into
23 cabinet-level departments, 8 agencies under the Office of the Governor, and 5
autonomous agencies or public corporations that are governed by boards of directors.
The Government has approximately 4,500 employees.

1Report No. S-TG-AMS-18-85

According to the Government's audited financial statements, General Fund resources
totaled $54.4 million for fiscal year 1992, consisting of $21.7 million in taxes,
$23.4 million in Federal contributions, $7.5 million in miscellaneous revenues, and
$1.8 million in transfers from other funds. However, expenditures and other uses
totaled $69.4 million, which resulted in a fiscal year 1992 operating deficit of about
$15 million. As of September 30, 1992, the General Fund had an accumulated
deficit of $23.2 million. Further, as of September 30, 1992, an American Samoa
Government entity had one outstanding bond issuance with a remaining balance of
about $7.6 million.

Federal audits of the American Samoa Government are performed under authority
of three Federal laws. The Inspector General Act of 1978 (Public Law 95-452)
established the Office of Inspector General to conduct audits and investigations
related to programs and operations of the U.S. Department of the Interior. The
Office's mission is to: (1) conduct and supervise independent and objective audits
and investigations; (2) promote economy, efficiency, and effectiveness; (3) prevent
and detect fraud, waste, and abuse; (4) review and make recommendations regarding
existing and proposed legislation and regulations; and (5) keep agency heads and the
Congress fully informed of identified problems.

The Insular Areas Act of 1982 (Public Law 97-357) transferred the audit authority
of the former Government Comptroller's Office of the U.S. Department of the
Interior to the Office of Inspector General. The Single Audit Act of 1984 (Public
Law 98-502) established a requirement for all state and local governments (including
insular area governments) that receive $100,000 or more in Federal assistance in any
fiscal year to have a comprehensive financial audit performed for that fiscal year.

PRIOR AUDIT COVERAGE

In March 1987, the Office of Inspector General issued the special report "Status of
Recommendations Made to the American Samoa Government" (No. S-TG-AMS-18-
85). The report noted that from October 1, 1982, to June 30, 1986, the Office of
Inspector General had issued 31 audit reports, with 374 recommendations. Followup
reviews were performed for 12 of the 31 audit reports, and the reviews disclosed that
59 percent (64 out of 109) of the recommendations had not been implemented.
Although many of the problems addressed in the 31 audit reports were corrected,
problems still existed at the time of our current review in the areas of billings and
collections, payroll, travel, expenditure processing, and materials procurements.

From July 1, 1986, to September 30, 1995, the Office of Inspector General issued 17
audit reports (Appendix 1) and the Territorial Audit Office issued 118 audit reports
(Appendix 2) relating to the American Samoa Government. In addition, during this
period the U.S. General Accounting Office issued two reports on American Samoa
finances: "Ways To Reduce the Cost of Medical Referral Programs in Micronesia

2

and American Samoa" (No. GAO/NSIAD-84- 139) and "Inadequate Management and
Oversight Contribute to Financial Problems" (No. GAO/NSIAD-92-64). Further,
during the same period, independent public accountants issued single audit reports
on the American Samoa Government for fiscal years 1986 through 1991. Also, on
October 6, 1994, the Treasurer of American Samoa issued the audited fiscal year
1992 Comprehensive Annual Financial Report, and on October 10, 1995, according
to the Territorial Auditor, the fiscal year 1992 single audit reports were released.2

2
As of October 27, 1995, the cognizant Federal agency had not received the fiscal year 1992 single
audit reports for the required review.

3

PART I - IDENTIFIED PROBLEM AREAS

Based on our review of significant audit reports issued by the Office of Inspector
General, the General Accounting Office, the Territorial Auditor, and the American
Samoa Government's independent public accountants, we concluded that although
the Government has made improvements in financial management, expenditure
control, revenue collection, and program operations, additional improvements are
needed. The continuing problems associated with each of these areas are discussed
in detail in the following narrative.

FINANCIAL MANAGEMENT

The Federal Government has continued to be concerned over long-standing
problems in financial management operations of the American Samoa Government.
In a June 1994 report,3 the Office of Inspector General estimated that, as of March
31, 1993, the Government's General Fund cash deficit was $30.1 million (over 50
percent of the $52.6 million General Fund revenues reported for fiscal year 1992).
The report also stated that Government officials: (1) overestimated revenues by $10.9
million over a 4-year period; (2) expended funds in excess of amounts appropriated;
and (3) used Federal grant funds to cover funding shortfalls. According to a 1992
General Accounting Office report,4 the Government's inadequate financial
management practices have been a primary cause of its deteriorating financial
condition. Further, both the General Accounting Office report and the Inspector
General report noted that the Government had not been effective in implementing
its 1988, 1990, and 1993 financial recovery and cost containment plans, particularly
in reducing personnel costs, which were over 67 percent of the Government's
budgets. Also, on July 10, 1995, the Governor stated that the Government faced a
"severe financial crisis," owed almost $44 million, and barely had enough money to
meet its biweekly payrolls.

The June 1994 Inspector General report stated that, since October 1991, the
Government has been unable to use its automated financial management system to
effectively control the Government's financial resources.  In addition, on
August 5, 1994, the Territorial Auditor reporteds that the Government could not
properly manage its financial affairs because the Government lacked proper
accounting records, did not know how much money was in the bank, and did not
know how much money was owed to and by the Government. Further, in the single
audit reports for fiscal year 1991, the independent public accountants stated that the
Government's internal controls had not: (1) prevented or detected misstatements of

3Report No. 94-I-651
4Report No. GAO/NSIAD-92-64
5Report No. 94-104

accounting information and (2) ensured the appropriate review and approval of
accounting transactions. The single audit reports for fiscal year 1990 noted similar
problems.   Also,  the independent public accountant's report,  dated
September 30, 1994, on the General Purpose Financial Statements stated that "[t]he
system of financial accounting and reporting in operation for the Government for the
year ended September 30, 1992, was inadequate." The independent public
accountants continued by noting: (1) "significant failures" in the underlying computer
systems and in the internal control structure related to general accounting and grants
administration, including the failure to prevent or detect misstatements of accounting
information, and (2) a lack of appropriate management oversight and review and of
approval of transactions. As a result of these deficiencies, the independent public
accountants did not express an opinion on the financial statements.

Further, the Treasury Department has been unable to generate reliable financial
reports because, according to the Government's Treasurer, accounting software
acquired in 1991 was "incomplete and flawed" and the flaws "cannot be fixed." In
addition, according to the Territorial Auditor, as of October 12, 1995, the
Government had not issued a contract for the fiscal year 1995 single audit. He also
stated that the independent public accountants had not completed work on the single
audits for fiscal years 1993 and 1994 and were concerned about the poor condition
of the Government's automated financial records.

Budgetary Control

In audit reports issued in 1987, 1989, and 1994,6 we concluded that Government
officials did not have adequate budget discipline and a financial management system
to provide the necessary data to effectively budget for and control expenditures.
According to the 1992 General Accounting Office report, as of September 30, 1984,
the General Fund had a surplus of approximately $400,000. Less than 9 years later,
at March 31, 1993, our June 1994 report estimated that the General Fund cumulative
unreserved fund (amount of funds available for appropriations) showed a deficit of
$41.6 million.' This report also noted that Government budget officials did not
consider the cumulative deficit when determining annual budget submissions but
instead budgeted only current year estimated expenditures. Because of the lack of
budget discipline, the deficit was increasing.

The Government's audited financial statements show that the General Fund deficit
had increased from $6.5 million at the end of fiscal year 1991 to $23.2 million at the
end of fiscal year 1992. However, the fund deficit reported in the audited financial

6Report Nos. S-TG-AMS-11-86, 90-16, and 94-I-651

7We reduced the $54 million deficit estimated in the 1994 report by $12.4 million for items not
normally reported on the balance sheet.

5
statements did not include either a reserve for encumbrances outstanding at year
end or the $1 million Income Tax Reserve Account required by American Samoa
law. We included these items in our estimate of the deficit at March 31, 1993. Also,
the fiscal year 1992 financial statements, dated October 6, 1994, included a note on
subsequent events which stated that "the financial condition of the Government has
continued to deteriorate since September 30, 1992." Further, an official of the
Treasury Department estimated that the fund deficit at the end of fiscal year 1994
would have increased to $33 million (excluding required reserves for encumbrances
and income taxes).

According to the three Inspector General reports, Government officials continually
overestimated revenues, which resulted in appropriations in excess of actual
revenues; did not follow the budget allotment process; and allowed department
directors to routinely approve expenditures in excess of appropriations, which was
in defiance of American Samoa law. From fiscal years 1985 through 1992, instances
of overspending were reported routinely. For example:

   In July 1987, we reported9 that 11 Government agencies exceeded their
appropriations by a total of $2.7 million for fiscal year 1985.

   Also in July 1987, we reported10 that the Territorial Administration on
Aging had not established financial and management controls to ensure that only
authorized services were provided.  For example, program managers overspent
budgets for the Senior Community Service Employment Program (which assisted 268
participants), with the result that the Program had to shut down only 9 months into
the Program year.

In the fiscal year 1992 Consolidated Annual Financial Report, the
Government identified 21 agencies that had exceeded their appropriations by a total
of $8.5 million.

In February 1995, the Territorial Auditor reportedll that expenditures for
the multimillion dollar off-island medical referral program were substantially over
budget in fiscal years 1992 and 1993 and the first 6 months of fiscal year 1994.

According to the 1992 General Accounting Office report, no Government officials
had been held accountable for exceeding their appropriations, and the Attorney

8Encumbrances are anticipated expenditures evidenced by a contract or purchase order or
determined by administrative action.

9Report No. S-TG-AMS-11-86
10Report No. S-TG-AMS-23-84
11Report No. 95-102
General said that no instances of spending in excess of appropriations had been
brought to his attention.

The financial problems resulting from the growing deficit are evidenced by the
Government's delays in paying taxpayers' income tax refunds. For example, in fiscal
year 1993, the Government used funds from a $10.6 million Federal Emergency
Management Agency disaster loan to pay tax year 1992 refunds; full payment of
refunds for tax year 1993 was delayed over 6 months; and refundsof about $400,000
for tax year 1994 were still outstanding as of September 28, 1995. Other financial
problems included the inability of the Government, since October 1992, to pay for
property insurance and the inability of the Government hospital to purchase needed
supplies and repair needed equipment because of a shortage of funds.

Long-Term Debt

Although we have not performed any audits of the Government's long-term debt, the
Government's fiscal year 1992 Consolidated Annual Financial Report stated that the
total outstanding debt was $17 million, including costs for prospective lease
payments, accrued vacation, and estimated legal judgments. However, this amount
included no bonded debt. The long-term debt was understated because, according
to the report, the present value of future lease payments was included rather than
the actual amount of the lease payments. Because the report did not disclose the
actual total of the lease payments, the understated amount is unknown.

Grants Management

From October 1, 1982, to September 30, 1995, the Office of Inspector General issued
12 audit reports, the Territorial Auditor issued 39 reports, and independent public
auditors issued 6 single audit reports on Federal grants received by the Government.
The audit reports identified the following deficiencies: (1) Federal grant-specific
funds were frequently used to pay for general government operations; (2) costs were
unsupported and/or unallowable; and (3) material internal control weaknesses existed
in grants management.

As a result of ineffective control over expenditures, the Government had withdrawn
Federal grant funds in excess of immediate grant needs to use the funds for general
operating expenditures.  By March 31, 1993, the Government had improperly
withdrawn an estimated $10 million of Federal grant funds.  Other common
deficiencies identified during grant audits were as follows: (1) documentation
supporting costs charged against the grants was inadequate; (2) prior grantor agency
approval was not obtained for costs that were outside of or that exceeded the
approved grant budgets; and (3) competitive procurement procedures were not used
or reasons were not documented as to why competitive procedures could not be
used.

For example, our review of grants administration at the Department of Education12
concluded that the Government delayed payment of grant program obligations to
vendors and requested grant funds in excess of need in order to cover the General
Fund operating cash shortfall. In our current review, we also identified charges to
grant programs that were unsupported or unallowable. In another example, the
Territorial Auditor reviewed the Territorial Administration on Aging13 and reported
that in fiscal years 1991 and 1992, grant awards had been overspent by a total of
$580,009 and that the Government therefore had to use local revenues to cover the
overexpenditures.  Further, the fiscal year 1991 single audit reported that the
Government's grants administration officials had not performed the appropriate
review of grant transactions and did not have the necessary training to fulfill their
assigned functions. Finally, the fiscal year 1990 and 1991 single audits identified
questioned grant costs of over $4.1 million and $2.6 million, respectively.

EXPENDITURE CONTROL

We believe that the Government's existing procurement laws and regulations, if
followed, are adequate to ensure that procurement actions are carried out in an
efficient and effective manner and with a reasonable level of competition. However,
our audits have shown that these laws and regulations have not always been complied
with, which has significantly contributed to the Government's ineffective control over
expenditures. Audits by the General Accounting Office, the Inspector General, and
independent public accountants 14 of the Government's procurement activities
determined that the Government did not obtain adequate competition on
procurements and did not adequately comply with other expenditure guidelines
intended to reduce the cost of Government programs. For example:

The 1992 General Accounting Office report stated that Government
officials often "ignored" and "circumvented" laws, policies, and rules for exercising
management control over Government procurement and contracting practices. The
auditors identified many instances where competitive bidding was not performed,
procurement actions were not properly reviewed, and contract files did not contain
required information.

12Report No. 93-I-1600
13Report No. 94-01
14Single  audit for fiscal year 1991
   Two General Accounting Office reports,15 our November 1989 reportl6
on the Government's financial condition, and a February 1995 Territorial Auditor
report17stated that the Government did not have control over Medical Referral
Program expenditures. Excess costs were incurred because hospital officials bypassed
referral procedures and sent patients to private clinics rather than to the less
expensive Tripler Army Medical Center in Honolulu, which was available through
an interagency agreement. According to the 1992 General Accounting Office report,
in fiscal year 1990 the Government spent $3.6 million for off-island health care, $2.2
million in excess of the amount budgeted. In fiscal year 1992, Health Department
expenditures were $5.6 million in excess of the $13 million budgeted.

Our August 1990 report18 disclosed that the Government did not discount
advance lease payments to reflect the present value of future lease payments, which
resulted in the uneconomical and inefficient use of over $1 million.

Two Inspector General procurement audit reports19 disclosed that the
Government: (1) did not adequately justify making procurements on a sole source
basis despite the availability of the products from other sources at significant savings
and (2) did not adequately enforce conflict-of-interest standards when procuring
communications equipment. In a 1988 report,2o we identified five unjustified sole
source procurements totaling $1 million that appear to have cost the Government
almost $500,000 more than necessary.

   A May 1995 Territorial Auditor report21 on the procurement, control, and
use of Government vehicles stated that there was little or no control over the
selection, purchase, and use of Government vehicles. The report stated that during
calendar year 1994, the Government purchased 38 new passenger-type vehicles at an
average cost of $20,438 and that Department directors had almost total discretion
in selecting and equipping the vehicles. For example, Federal school lunch program
funds were used to purchase a small pickup truck for $12,850 and a sports utility
vehicle for $24,659, both apparently for use in the lunch program. The report stated
that the Government could save about $283,000 annually if it implemented the
report's recommendations.

15Report Nos. GAO/NSIAD-84-139 and GAO/NSIAD-92-64
16Report No. 90-16
17Report No. 95-102
18Report No. 90-90
19Report Nos. 88-109 and S-TG-AMS-09-86
20Report No. 88-109
21Report No. 95-106

REVENUE COLLECTION

Although the Government's General Fund revenues increased almost 12 percent,
from $47.1 million in fiscal year 1986 to $52.6 million in fiscal year 1992, the audits
by the General Accounting Office, the Inspector General, the Territorial Auditor,
and the independent public accountants concluded that further improvements could
be made in the areas of assessment, enforcement, and collection of taxes and in the
collection of accounts receivable. For example:

   Our August 1989 report22 on the assessment and collection of taxes
disclosed: (1) substantial potential for fraud, waste, and mismanagement and (2) the
continued loss of opportunities to collect additional revenues from the Government's
income, excise, and sales taxes. For example, the report noted significant weaknesses
in management controls over the tax enforcement and collection functions in the
accountability for tax returns and related documents.

   The April 1992 General Accounting Office report stated that the
Government had not ensured that individuals and businesses were filing tax returns
and reporting miscellaneous income.  In addition, the report noted that the
Government had a substantial backlog of unassigned collection and tax audit cases
and that "political interference" and "favoritism" impeded tax collection.

   The fiscal year 1991 single audit reported that controls in place did not
adequately account for and monitor taxes due the Government.

   In August 1990, we reported23 that the Government had not aggressively
collected past-due rents on leased Government-owned property because the
Government: (1) had not established a formal system to ensure timely collection of
rents; (2) had not included language in lease agreements that required lessees to pay
late penalties; and (3) had seldom subjected lessees with delinquent payments to the
legal eviction process.

    In 1994 and 1995, the Territorial Auditor reported24 that the Government
hospital, the golf course, and the Tradesmen's Licensing Board did not have
adequate procedures to ensure that cash and other collections were deposited intact
to the Treasury. Although the report on the Licensing Board did not include an
estimate of losses, the hospital and golf course reports identified over $25,000 that
was apparently collected over an 8-month period but not deposited.

22Report No. 89-106
23Report No. 90-90
24Report Nos. 94-002, 94-103, and 95-105

10

PROGRAM OPERATIONS

The Government is responsible for providing such diverse services as public
education, health care, parks and recreational facilities, police and fire protection,
airport and seaport facilities, a judiciary and prison system, solid waste disposal,
roads, and telephone service. Additionally, the Government's autonomous agencies
are responsible for providing developmental loans, economic and agricultural
development, higher education, water, sewage disposal, and power. Although most
of these services are generally provided in an efficient and effective manner, the
continuing Governmentwide financial crisis has negatively impacted operations in
several areas.  The severe shortage of funds resulted in situations such as the
Government's inability to: (1) correct serious structural deterioration in its largest
high school and (2) repair roads and pay fair compensation for land taken for new
roads. Although our audits generally focused on the ongoing financial crisis, we
identified areas where improvements could be made both in program operations and
property management. For example:

   In November 1991, we reported25 that the Government had not
established a permanent seawall construction capability despite receiving a
$1.5 million grant for this purpose and hiring a construction manager. As of
May 1991, 3 years after the grant award, we noted that no part of the seawall had
been constructed.

   In January 1988, we reported26 that the American Samoa Development
Bank approved and disbursed loans without adequate analysis and control to ensure
that the loans could be repaid and that the proceeds were used as provided for in
the loan applications.

Property Management

Our review of the Government's property management practices, the Government's
single audit reports, and our audits of individual agencies disclosed that significant
improvements are needed in safeguards over valuable Government property and
equipment. For example:

   In August 1990, we reported 27 that the Government did not have a
current inventory of all Government-owned property or a system of property
management which should include procedures for acquiring, leasing, and disposing
of property.

25Report  No. 92-I-128
26Report No. 88-33
27Report No.  90-90

11
    In January 1989, we reported28 that Government property was particularly
vulnerable to waste, misuse, or loss because property accountability had not been
properly established either by the Chief Procurement Officer or department and
agency heads. A significant amount of property could not be located during our
physical inventories, and much of the property reported on the 1986 inventory report
could not be accounted for.

   According to the Government's single audit reports for fiscal years 1991,
1990, and 1989, the system for receiving, identifying, and tracking fixed assets was not
adequate to account for assets belonging to the Government. The Government's
General Fixed Asset Account Group lacked supporting documentation, and the
detailed subledger and the general ledger were not reconciled. Also, the
Government's controls over the Account Group were inadequate. In addition, the
independent public accountants for the fiscal year 1992 financial statements reported
that since the Government's computer system records on General Fund fixed assets
were not available, balances for fiscal year 1991 were used to prepare the fiscal year
1992 report.

28 Report No. 89-40

12
PART II - CORRECTIVE ACTIONS TAKEN

AMERICAN SAMOA GOVERNMENT

The American Samoa Government has taken various corrective actions to begin to
address some of the long-standing problems discussed in Part I of this report. Some
of these improvements have resulted from the Government's own initiatives, while
others have been made with encouragement from the U.S. Congress and assistance
from the Office of Insular Affairs, U.S. Department of the Interior, and other
Federal agencies.

Financial Management

As a result of the 1992 General Accounting Office report, the U.S. Congress directed
that a joint working group be established with both American Samoa and
Department of the Interior members to develop a plan to address the management
and financial problems identified in the report. The working group was established
in September 1992 and, in April 1993, submitted its Plan of Action to the Congress.
In January 1994, the current administration expanded the mandate of the working
group to include the development of a financial recovery plan, and in August 1995,
the first working draft of the plan was completed. Also, on December 15, 1993, the
Governor established the American Samoa Hospital Authority in order to provide
medical services in accordance with sound business and accounting practices.

Although prior efforts to reduce the deficits have been mostly ineffective, the current
administration has taken three recent actions that may help to control the deficit.
On September 22, 1994, the Governor issued Executive Order 10-1994 to control and
limit the Government's personnel costs by requiring the Governor's advance approval
before hiring new personnel, authorizing overtime and compensatory time, promoting
and reclassifying employees, renewing any contract employee, and authorizing
administrative leave.  In addition, from April 23 through August 12, 1995, the
Governor reduced the workweek of Executive Branch employees to 36 hours for duty
and pay purposes in order to improve the Government's financial position. Finally,
on September 30, 1995, the Acting Governor approved the fiscal year 1996
Government budget of $149.6 million, which was $5.1 million below the estimated
revenues of $154.7 million.

Internal Audit Function

The American Samoa Government has an effective but limited internal audit and
investigation function, the Territorial Audit Office.  On August 19, 1985, the
Governor signed Public Law 19-21, which created the Territorial Audit Office as an
independent agency. (Until 1985, this function was performed by the Internal Audit

13

Office, which was part of the Office of the Governor.) The Territorial Audit Office
is under the direction of the Territorial Auditor, who is appointed by the Governor
and confirmed by the Legislature for a term of 4 years with a two-term limit. The
current Territorial Auditor was appointed in March 1994, and his term of office
expires in March 1998.  For fiscal year 1996, the Territorial Auditor had an
appropriated budget of $254,000 and 9 authorized positions, including 8 audit staff
and supervisors. In addition, the Federal Government provided $50,000 for the first
year of a 2-year contract to assist in employing a qualified Audit Manager.

The Territorial Audit Office is authorized to perform audits and investigations, but
only in the Executive Branch.  A recent legal interpretation stated that the
Territorial Auditor did not have audit access to either the Legislature or the
Judiciary unless the entity requested an audit. Audit Office audits are to be
performed in accordance with audit standards issued by the U.S. General Accounting
Office and the American Institute of Certified Public Accountants. The Audit
Office's final audit reports are issued to appropriate auditee officials, the Governor,
and the Legislature and are also available to the public.

From fiscal years 1982 through 1995, the Territorial Audit Office and its predecessor
office issued 118 audit reports (Appendix 2). Although we have not conducted any
audits or quality assurance reviews of operations of the Territorial Audit Office, we
believe, based on our review of the Audit Office's recently published reports, that the
Audit Office is becoming more effective in carrying out its internal audit
responsibilities.

Expenditure Control

As indicated in Part I of this report, we believe that the Government's procurement
laws, rules, and regulations are sufficiently detailed to provide for a reasonably
efficient and effective competitive procurement function. In addition, the Governor
had issued several directives to control expenditures, especially personnel costs.
Although some Government officials had not cooperated fully with the Governor's
efforts to control expenditures, the Governor had taken action to encourage
compliance. For example, in July 1994, the Governor accepted the resignation of a
senior official after the official paid employees for excess compensatory time without
the Governor's approval and in violation of an Executive order. In addition, in
September 1994, the Governor issued Executive Order 10-1994 to ensure that all
Government employees were notified of the limitations on authorizing additional
personnel costs.

14
Revenue Collection

The American Samoa Government made the following improvements in revenue
collections:

  - In June 1994, the Governor approved an increase of 14 positions, to a total
of 50, in the American Samoa Tax Office. The additional personnel were expected
to bring in millions of dollars in uncollected taxes by improving collections and by
increasing audits of backlogged cases.

   Also in June 1994, the airport initiated a $1 parking fee, which a
Government official estimated would raise $100,000 per year. This amount could be
used to reduce the $500,000 annual subsidy from the General Fund.

    On October 1, 1994, the Government enacted a law that increased the fee
on fuel dispensed from the Government tank farm from 3 to 4 cents per gallon. The
Government designated one-half of the 4 cent fuel fee revenue to purchase medical
supplies and drugs for the Government hospital and the other half for tank farm
improvements.

   Also in October 1994, the Federal Aviation Authority agreed in principle
to a $3 airport departure tax, which would raise an estimated $250,000 per year to
be used for airport repairs and improvements.

   On August 10, 1995, the Governor signed a law increasing consumption
taxes and import duties on most consumer goods, which was expected to raise about
$6 million annually. The new law also requires the majority of the new revenues to
be deposited into a "Deficiency Reduction Fund" for payment of the Government's
prior year obligations.

Infrastructure

Although the American Samoa Government has not been able to finance major
improvements to its infrastructure because of its continuing financial crisis, in May
1994 the Government, in cooperation with a major petroleum importer, began a
major renovation of the American Samoa tank farm fuel storage facility. Larger and
improved fuel storage facilities should increase Government revenues from
petroleum taxes and fees, including sales to neighboring South Pacific islands. In
addition, the Government prepared a 5-year Capital Improvement Plan to detail
infrastructure needs, estimate the costs of necessary projects, and establish priorities
for specific projects. In April 1995, a preliminary report estimated that $286 million
would be needed to fund necessary infrastructure projects over the next 10 years.

15

OFFICE OF INSULAR AFFAIRS

The Office of Insular Affairs, U.S. Department of the Interior (formerly the Office
of Territorial and International Affairs), serves primarily to facilitate Federal
relations with and assist the insular areas of the United States. In this capacity,
Insular Affairs has provided significant amounts of financial and technical assistance
to the American Samoa Government.

Technical Assistance

Technical assistance to the American Samoa Government has been provided through
direct grants, reimbursable agreements with Federal Government agencies, contracts
with private firms, and direct assistance by Insular Affairs staff. In addition, as a
result of the Government's serious financial problems, in September 1993, the
Assistant Secretary for Territorial and International Affairs met with the Governor
of American Samoa to develop a framework to achieve financial recovery for the
American Samoa Government and to improve financial systems and controls. The
American Samoa Government and Insular Affairs entered into partnership
agreements in four areas to provide: (1) a Joint Working Group for financial
recovery and planning; (2) a comanagement and maintenance program for the
American Samoa hospital; (3) a management and skills program in conjunction with
the Internal Revenue Service for improving tax collection and enforcement; and (4)
a U.S. Department of Justice assessment team to provide investigative assistance to
the American Samoa Attorney General.

From 1983 through 1995, Insular Affairs administered over 100 technical assistance
grants to the Government, which totaled more than $11 million. In addition,
American Samoa receives benefits from at least six other technical assistance grants,
totaling $2 million, which were intended for use by American Samoa and other
insular areas. Examples of recent technical assistance provided to the Government
are as follows:

  - In 1991, Insular Affairs provided a grant of $96,000 to be used to improve
the operations of the Office of the Territorial Auditor. The Government used the
grant in fiscal years 1994 and 1995 to fund the newly appointed Territorial Auditor.

  - In 1993, at the request of the Government and Insular Affairs, the U.S.
Public Health Service evaluated the Government's off-island health care program and
made recommendations to strengthen medical referral policies and procedures to
effect a cost-efficient program.

  - In February 1994, funded by a technical assistance grant, a U.S. Department
of Justice team arrived in American Samoa to evaluate the Government's needs and

16
recommend the type and amount of training assistance most suitable for law
enforcement needs. In September 1994, the Department of Justice provided several
types of law enforcement training to Government officials.

  - Also in February 1994, Insular Affairs awarded three matching grants,
totaling $600,000, for projects to improve utility service to American Samoa
residents, including preparation of a utilities master plan and projects to improve the
Power Authority's operational and maintenance capacity, and to repair and maintain
water system booster pumps.

  - In 1994, Insular Affairs provided a $70,000 technical assistance grant to help
the Government close out its financial statements for fiscal years 1992 and 1993.

  - In June 1994, a team from the Operation and Maintenance Improvement
Program (funded by Insular Affairs) made a priority recommendation that the
Government hire a Maintenance Engineer for the Government Hospital. The
position was jointly funded with Federal grant and local funds and filled for 1 year;
however, as of July 1995, the position was again vacant and the Government was
seeking a replacement engineer.

  - During fiscal year 1994, 207 Government employees participated in
governmental accounting, auditing, management, and procurement courses provided
through the U.S. Department of Agriculture Graduate School. Insular Affairs
established this program in 1990 to provide a wide range of training to employees
of the Pacific Island governments, including American Samoa.

   In December 1994, Insular Affairs awarded a $305,000 grant to fund the
first year of a 3-year project to assist the Government in the cost of hiring an
independent contractor to provide management and technical assistance to the
Government's medical center.

   In April 1995, Insular Affairs provided a grant of $1.67 million to fund the
replacement of the Government's existing financial management system by
purchasing a new automated system and training personnel to operate the system.
Also, the grant was to fund the first year of four 2-year contracts for three
professional accounting managers for the Treasury Department and an audit
manager for the Territorial Audit Office. In June 1995, the Government issued a
request for proposal for the new financial system. Bids were received in September
1995, vendor site visits were scheduled for November 1995, and the Government
expects the system to be operational by October 1996.

   Also in April 1995, Insular Affairs awarded a grant of $300,000 to fund the
cost of a contractor to perform a comprehensive study of the Government's
organization, financial condition, and economic status and to make recommendations

17

for improvements in each area. The first working draft of the financial recovery plan
was completed in August 1995, and meetings to discuss the reorganization plan were
scheduled for December 1995.

Capital Improvement Assistance

In addition to technical assistance, Insular Affairs has awarded and administered
grants for capital improvement projects from funds appropriated by the U.S.
Congress. According to Insular Affairs, from October 1, 1984, through March 31,
1995, the American Samoa Government received 35 capital improvement grants
totaling approximately $39.8 million, as follows:

  - To purchase, upgrade, and rehabilitate electric power generation and
distribution systems in American Samoa, the Government received three grants,
totaling $9 million, in fiscal years 1991 through 1993.

  - To construct and rehabilitate potable water distribution systems at various
points in American Samoa, the Government received five separate grants, totaling
$8.3 million, in fiscal years 1990 through 1995.

  - To construct classrooms and fences at various schools and to purchase
school buses, the Government received a total of $6.6 million in 10 grants during
fiscal years 1986 through 1995.

  - To purchase equipment, renovate facilities, and repair the hospital roof, the
Government received four grants in fiscal years 1986, 1989, 1994, and 1995, totaling
$3.3 million.

  - To install and extend sewer lines, the Government received three grants,
totaling $3.3 million, in fiscal years 1993, 1994, and 1995.

  - To rehabilitate the American Samoa fuel dock, the Government received
$1.6 million in fiscal year 1988.

  - Other capital improvement projects included prison expansion; court house
renovation; and construction of a harbour, seawall, community centers, gymnasiums,
and a library building.

As of April 1995, the classroom construction was in progress, the power system
improvements were almost complete, and significant progress had been made in
repairing the hospital and in improving the water and wastewater systems.


PART III - FUTURE GOALS FOR IMPROVEMENT

The Office of Inspector General has developed basic performance goals in the areas
of financial management, expenditure and revenue control, and program operations
that we believe the American Samoa Government should strive to achieve. These
goals are based on: (1) applicable provisions of United States law, the Code of
Federal Regulations, and U.S. Office of Management and Budget circulars; (2) the
American Samoa Code Annotated, the American Samoa Government Administrative
Rules, and other established policies and procedures of the American Samoa
Government; and (3) the body of accounting and financial reporting standards
commonly referred to as "generally accepted accounting principles." In our future
audits of Government programs and operations, we will evaluate the progress being
made by the Government in achieving the following overall goals:

  - Effective financial management should include the ability to: (1) accurately
account for Federal and local funds and property and provide timely and accurate
reports to government managers and grantor agencies; (2) establish budgets based
on realistic revenue projections, make allotments based on actual revenues, limit
expenditures to approved allotment and appropriation levels, and control bonded and
other long-term debt; (3) ensure compliance with the Single Audit Act, Federal grant
regulations as issued by the Office of Management and Budget, and specific grant
program requirements and accurately record grant program transactions; and (4)
maintain an active, independent, and objective internal audit function.

  - Effective procurement and supply management should include the ability to:
(1) procure quality goods and services at the lowest cost and in accordance with
applicable Federal and local procurement regulations and (2) provide goods and
services to agencies and pay vendors and contractors within reasonable time frames.

  - Effective revenue collection should include the ability to accurately
determine and account for all funds due the Government and promptly assess and
collect such funds.

  - Effective program operations should include the ability to: (1) provide basic
services and infrastructure facilities in an efficient and effective manner; (2) recruit
qualified personnel needed to effectively carry out program objectives; and (3)
properly maintain, safeguard, and account for the Government's property and
equipment in accordance with applicable Federal and local regulations.



19



FINANCIAL MANAGEMENT

To meet the financial management requirements of generally accepted accounting
principals, the Insular Areas Act of 1982, the Single Audit Act of 1984, Federal grant
management requirements, and budget-related provisions of American Samoa law,
the Government should:

  - Complete the replacement of its automated financial management system
with a financial management system that provides the Government with accurate,
complete, and timely financial and budget information.

  - Implement the Government's Plan of Action, which was prepared at the
request of the U.S. Congress to address the recommendations contained in the 1992
General Accounting Office audit report. The Plan includes steps to reduce the
General Fund deficit, improve the budget process, increase revenue collections,
reduce personnel and health expenditures, and reduce expenditures for contracts and
goods by improving the procurement process.

  - Ensure strict budget discipline to control expenditures and restrict allotments
to available cash.

  - Enforce the prohibition, contained in Title 10 of the American Samoa Code
Annotated, against making or authorizing expenditures and obligations in excess of
amounts available. If an Attorney General's investigation determines that officials
violated this law, they should be subjected to administrative and/or criminal sanctions
as appropriate.

  - Negotiate agreements with the appropriate Federal agencies to reimburse
or otherwise resolve to the Federal agencies' satisfaction all unauthorized transfers
and uses of Federal grant funds.

  - Ensure that Government officials comply with the Government procurement
law and obtain prior grantor approval for any proposed grant charges outside of or
in excess of the approved grant budgets.

  - Resolve prior period single audit findings on the financial statements and
Federal grants,

  - Ensure that the Treasury Department produces comprehensive annual
financial reports within 90 days after the end of each fiscal year, as required by the
Insular Areas Act of 1982, and the Government contracts for the single audits that
are to be completed and published within 1 year of the end of each fiscal year, as
required by the Single Audit Act of 1984,

20
EXPENDITURE CONTROL

To improve its ability to control expenditures, the Government should:

  - Ensure that Government agencies comply with existing procurement laws
and regulations, including adequately justifying the award of all sole source
procurements, maintaining complete and accurate records of procurement actions,
and disciplining personnel who violate the procurement law and regulations.

  - Ensure that it strictly complies with procedures for authorizing and
documenting off-island medical referrals and collects excess costs from patients
receiving off-island health care at facilities other than Tripler Army Medical Center.

  - Ensure that Government agencies do not make advance payments on leases
or other contracts unless the advance payments are advantageous to the Government
and the payments are discounted to reflect the time value of money.

REVENUE COLLECTION

To improve its ability to generate and collect revenues, the Government should:

  - Ensure that individuals and businesses pay taxes on all their income, the Tax
Office maintains complete and accurate records of taxation transactions and
aggressively collects all delinquent income taxes, and the Attorney General
investigates and takes appropriate action on any alleged interference by Government
officials in tax examinations.

   Ensure that all agencies that generate accounts receivable, including leases
receivable, have procedures to maintain accurate and up-to-date records of amounts
owed to the Government and aggressively enforce the collection of such receivables.
Emphasis should be placed on collecting receivables and revising rates for those
agencies that require supplemental funding from the General Fund, such as the
Health Department (hospital and medical referral program), airport, and golf course.

   Ensure that cash collections made at sites remote from the Treasury, such
as the hospital and the golf course, are deposited in full and in a timely manner.

PROGRAM OPERATIONS

To improve its program operations, the Government should:

  - Ensure that seawall construction and construction capabilities are continued
by employing and/or training project management and personnel and transferring
equipment funded by the Federal seawall grant to the seawall construction program.

  - Ensure that the American Samoa Development Bank provides adequate
analysis and control in issuing and disbursing loans so that the loans are repaid and
the proceeds are used as provided in the loan applications.

  - Ensure that official accountability is clearly established for all Government
real property and capitalized personal property and that property transactions are
recorded promptly and accurately.

  - Ensure that the General Fund fixed assets estimated at $81.3 million are
adequately identified and tracked and that the asset records are periodically
reconciled.

22

CONCLUSION

Since October 1982, when it was assigned Federal audit responsibility for American
Samoa, the Office of Inspector General has issued 55 audit reports on programs and
activities of the American Samoa Government. In addition, the General Accounting
Office and the Territorial Auditor also issued audit reports affirming issues raised
by the Inspector General reports. Although these reports disclosed problems and
deficiencies, the purpose of the reports has always been to serve as a catalyst for
change and improvement.  The reports contained a large number of
recommendations that, if implemented, would have resulted in improvements in the
efficiency and effectiveness of Government operations.  Many of these
recommendations have been implemented. However, many others have not been
implemented for various reasons, including nonconcurrence by the Government; the
lack of sufficient funds or staff resources; the need for technical assistance, training,
or other guidance; and the low priority given by the agencies audited.

This report has highlighted: (1) the major long-standing problems in financial
management and program operations that the audits have identified; (2) the positive
actions taken by the American Samoa Government and the Office of Insular Affairs
to address those problems; and (3) the basic performance goals and specific
improvement actions that the Government should strive to achieve in the areas of
financial management, expenditure control, revenue collection, and program
operations. The report can serve as a guide for the American Samoa Government
and the appropriate Federal agencies to establish priorities for future technical
assistance projects. We continue to believe that if the Government works toward
implementing the corrective actions recommended in our audit reports, the resulting
improvements in Government operations would ultimately benefit all American
Samoa residents.

23

APPENDIX 1
Page 1 of 2

OFFICE OF INSPECTOR GENERAL REPORTS

Assignment No.

FINANCIAL MANAGEMENT

S-TG-AMS-14-83A
S-TG-AMS-14-83B
S-TG-AMS-07-83
S-TG-AMS-18-83A
S-TG-AMS-09-83
S-MO-MOI-12-84A
S-TG-AMS-20-83
S-TG-AMS-18-83
S-MO-MOI-12-84
S-TG-AMS-07-84A
S-TG-AMS-15-84
S-TG-AMS-19-85
S-TG-AMS-20-85
S-TG-AMS-07-84
S-TG-AMS-1O-85
S-TG-AMS-07-85
S-TG-AMS-11-86
S-TG-AMS-23-84
S-TG-AMS-07-87
S-TG-AMS-20-89
S-IN-AMS-01-91
N-IN-AMS-11-92
N-IN-AMS-04-93

EXPENDITURE CONTROL

S-TG-AMS-19-83
S-TG-AMS-12-83
S-TG-AMS-16-83
E-TG-AMS-27-83
S-TG-AMS-23-83
S-TG-AMS-15-84A
S-TG-AMS-29-83
S-TG-AMS-21-84
S-TG-AMS-14-84
S-TG-AMS-21-85
S-TG-AMS-22-85
S-TG-AMS-09-86
S-TG-AMS-08-87
S-TG-AMS-09-87

Report No.

88-033
90-016
92-1-128
93-1-1600
94-1-651

88-76
88-109

*Reports not included in the March 1987 OIG status report.

Report Short Title

Dept. Interior Capital Improvement Projects
Fiscal Management
Activities of Department of Education
Revenues
Management of Economic Development Funds
Financial Situation Fiscal Year 1983*
Inactive Federal Grants*
Public Works Operations and Maintenance
Annual Report Fiscal Year 1983"
Financial Condition at March 31, 1984*
Manual Checks
Election Year Transition*
Am. Samoa Development Bank Controls
1983 Annual Financial Statement Audit
Financial Management Information System
1984 Annual Financial Statements Audit **
Administrative Control of Funds**
Territorial Administration on Aging**
Am. Samoa Development Bank Operations* *
Financial Condition of Government**
Seawall Construction Grant**
Education Grant Administration* *
Estimated Financial Condition* *

Procurement Practices
Marine Railway Dry Dock Expansion
Payroll Operations
Washington Office of the Governor*
Travel Management
Imprest Fund, Am. Samoa Office in Hawaii
Main Dock Expansion, Capital Improvement
Administration of Canton/Enderbury Islands
Public Work's Materials and Supplies
Golf Course Enterprise Fund
Costs Incurred - House of Representatives**
Survey of Communication's Procurements* *
Administration of Travel**
Review of Procurement Practices**

03/28/83
03128183
04/25/83
05/20/83
08/18/83
10/19/83
01/26/84
01/31/84
02/15/84
05/25/84
07/25/84
02/19/85
06/18/85
09/30/85
03/28/86
01/30/87
07/02/87
07/16/87
01/28/88
11/24/89
11/12/91
09/30/93
06/06/94


08/1 1/83
11/15/83
12/12/83
03/02/84
03/20/84
04/25/84
10/18/84
11/20/84
03/11/85
03/27186
12/10/86
08/20/87
05/06/88
08/31/88

**Reports issued after June 1986, the final month covered by the previous OIG status report
issued in March 1987.

                    24

APPENDIX 1
Page 2 of 2

Assignment No.

REVENUE COLLECTION:

S-TG-AMS-21-83
S-TG-AMS-11-84
S-TG-AMS-13-84
S-TG-AMS-06-85A
S-TG-AMS-16-85A
S-TG-AMS-15-85
S-TG-AMS-12-84
S-TG-AMS-20-84
S-TG-AMS-1O-84
S-TG-AMS-16-85
S-TG-AMS-11-85
S-TG-AMS-11-88
S-TG-AMS-22-89

PROGRAM OPERATIONS:

S-TG-AMS-19-84
S-TG-AMS-1O-88

AUDIT FOLLOWUP:

S-TG-AMS-13-83
S-TG-AMS-23-84A
S-TG-AMS-08-85
S-TG-AMS-18-85

Report No.  Report Short Title

     Surveyed Government Property
     Power Authority Billing and Collection
     Collecting and Accounting for Excise Taxes
     Proposed Revenue Bills in Legislature*
     Tax Office Management
     Communications Office
     Water Systems Billing and Collection
     American Samoa Liquor Store
     Medical Services Billing and Collection
     Territorial Income Tax System
     Tax Incentive Program* *
89-106   Assessment and Collection of Taxes**
90-090    Lease Administration Practices* *

     Office of the Attorney General
89-040    Property Management **

Status of Audit Recommendations
Nutrition Services Food Program
Selected Operations - FY 1984 Report*
Status of Audit Recommendations**

12/12/83
08/03/84
10/23/84
02/12/85
02/21/85
02/26/85
03/06/85
12/05/85
12/27/85
05/02/86
08/06/87
08/24/89
08/16/90

11/15/84
01/31/89

02/25/83
02/27/85
03/29/85
03/13/87

25

APPENDIX 2

                        Page 1 of 3
TERRITORIAL AUDIT OFFICE AUDIT REPORTS

Report No.
FINANCIAL MANAGEMENT
82-001
82-002
82-003
82-004
82-005
82-006
82-007
82-008
82-009
82-010
82-011
82-012
82-013
82-014
82-016
82-019
82-020
83-001
83-002
84-005
84-006
84-009
84-014
84-017
85-004
85-006
85-008
86-001
86-002
86-003
86-004
87-004
87-005
87-008
87-011
87-012
87-013
88-002
89-004
89-006
89-008
89-009
89-011
90-001
90-002
90-005
91-002

Report Subject Area

FEMA - Western District Disaster Fund
School Lunch Program - Dept. Education
Criminal Justice Planning Assistance - One Grant
Criminal Justice Planning Assistance - Two Grants
Criminal Justice Planning Assistance - Three Grants
Criminal Justice Planning Assistance - One Grant
Criminal Justice Planning Assistance - Three Grants
Criminal Justice Planning Assistance - One Grant
Criminal Justice Planning Assistance - One Grant
Criminal Justice Planning Assistance - Two Grants
Criminal Justice Planning Assistance - One Grant
Criminal Justice Planning Assistance - One Grant
Federal Highway Grants - TER-5-102
Federal Highway Grants - TER-F-0005
Office of Traffic Safety
Highway Safety Program - Office of Traffic Safety
Financial Audit - Public Television Station
Survey of the Arts Council
Office of Vocational Rehabilitation
Early Childhood Education - Dept. of Education
Limited Scope Federal Grants Review - FY 1980 & 1981
Disaster Preparedness Grants - Dept. of Public Safety
Alcohol, Drug Abuse & Mental Health Services Block Grant
American Samoa Arts Council
FY 1984 & FY 1983 Financial Audit - Public Television Station
Governor's Washington Office
Development Bank of American Samoa
FEMA State Disaster Assistance Agreement
School Lunch Program Inventory - Dept. of Education
America Samoa Office - Hawaii
Head Start Grants - Dept. Health & Human Services
Petty Cash & Change Fund - Golf Course
Student Services and Gov't Assn. Funds - Community College
FY 1984 / FY 1985 Financial Audit - Public Television Station
National Endowment for Arts Grants
National Endowment for Arts Grant
Development Bank of American Samoa
FY 1987 Financial Audit - Public Television Station
America Samoa Office - Hawaii
FY 1988 Financial Audit - Public Television Station
Barston Foundation - Dept. of Education
JROTC Program - Dept. of Education
Drug Free Schools Grant - Dept. of Education
Development Bank of American Samoa
Government Housing Funds
Legal Interpretation Request on Wharfage - Office on Aging
Financial Audit - Public Television Station

26

APPENDIX 2
Page 2 of 3

Report No.
93-001
93-002
93-003
94-001
94-104
95-101
95-103

EXPENDITURE CONTROL

84-007
84-008
84-010
84-011
84-012
84-013
85-003
89-001
89-005
92-003
95-102
95-106

REVENUE COLLECTION:

84-003
84-015
85-002
85-005
86-005
86-006
86-007/8
86-009
86-010
87-002
87-003
87-006
87-007
88-003
89-002
89-003
90-003
90-007
91-001
92-001
92-002

Report Subject Area

American Samoa Office - Hawaii
Financial Audit - Public Television Station
Cash & Cash Equivalents - Development Bank
Grant and Food Voucher Program - Administration on Aging
Status of Accounting Records - Dept. of Treasury
FY 1993/FY 1994 Financial Audit - Public Television Station
FY 1993/FY 1994 Financial Audit - Rainmaker Hotel

Workman's Compensation for Government Employees
Airport Security Fencing - Dept. of Port Administration
Inventory Counts - Material Management Division
Purchase Requisition Special Investigation
Meadow Gold Inventory - June 1984
Emergency Food & Shelter Program
Medical Supplies Inventory Account
Fuel Price Review - Power Authority
Work Order/Procurement - Power Authority
Unleaded and Diesel Fuel Prices - So. Pacific Resources, Inc.
Off-Island Medical Referral Program
Procurement, Control, and Use of Government Vehicles

Cash Sales - General Supply - Dept. Material Management
Cash Collection - Vital Statistics - Dept. of Health
Hospital Cafeteria Funds
Insurance Premiums Charged to Local Bus Drivers
Cash Collection & Operations - Office of Weights & Measures
Cash Count - Territorial Administration on Aging
Undeposited Receipts from Communication Offices
Cash Count & Collection Review - Vocational Rehabilitation
Cash Collections - Hospital Cafeteria
Cash Collection and Operation - Weights & Measures Office
Tuition Collection - Am. Samoa Community College
Cash Collection & Operation - Dept. Public Safety
Cash Count & Collection Review - Vocational Rehabilitation
Cash Collections & Deposit - Dept. of Motor Vehicles
Cash Collection/Deposit & Petty Cash - Parks & Recreation
Cash Collection & Deposit - Port Administration
Revenue & Cash Collection - Golf Course
Cash Collection & Deposit - Hospital
Terminal Operating Costs - So. Pacific Resources, Inc.
Billings & Accounts Receivable - Dept. of Health
Terminal Operating Costs - So. Pacific Resources, Inc.

27

APPENDIX 2
Page 3 of 3

Report No.

93-004
93-005
94-002
94-103
94-106
95-105

PROGRAM OPERATIONS:

82-015
82-017
82-018
82-021
82-022
83-003
84-001
84-002
84-004
84-016
85-001
85-007
87-001
87-009
88-001
89-007
89-010
89-012
90-004
90-006
90-008
91-003
95-104

AUDIT FOLLOWUP

87-010
88-004

Report Subject Area

Revenues and Management Controls - Office of Motor Vehicles
Airport Duty Free Shops - Customs/Excise Tax Division
Cash Receipts & Collections - Hospital
Cash Collection Records - Golf Course - Parks and Recreation
Cash Count - Customer Service Office - Power Authority
Cash Collection Procedures - Tradesmen's Licensing Board

Property Management Branch
Dept. of Parks and Recreation
Jean P. Haydon Museum
Immigration Office - Dept. of Legal Affairs
Mail Room Service
Staff Management - Dept. of Public Works
Juvenile Shelter Care Facility - Dept. of Parks and Recreation
Bookstore - Am. Samoa Community College
Drug Supply Management - Hospital
Am. Samoa Office in Hawaii
Development Banks of Am. Samoa
Department of Health Operations
Alien/Sponsor's Bond and Deposits - Immigration Offices
Off-Island Patient Referral Program - Hospital
Operations and Cash Collection - Immigration Division
State Agency for Surplus Property
School Maintenance - Dept. of Education
School Transportation - Dept. of Education
Property Management - Housing Fund
Review of Customs - Division of Treasury
Maintenance and Repairs Work Order System - Public Works
Operating Procedures - Airport
Performance Review - Rainmaker Hotel

Cash Collections & Operations - Terr. Office on Aging
Prior Audits and Cash & Checking Acct. - Community College

28

ILLEGAL OR WASTEFUL ACTIVITIES
SHOULD BE REPORTED TO
THE OFFICE OF INSPECTOR GENERAL BY:

Sending written

documents to:             Calling

Within the Continental United States

U.S. Department of the Interior            Our 24-hour
Office of Inspector General              Telephone HOTLINE
P.O. Box 1593                   1-800-424-5081 or
Arlington, Virginia 22210              (703) 23.5-9399

TDD for the hearing impaired
(703) 235-9403 or
1-800-354-0996

Outside the Continental United States

    Caribbean Area

U.S. Department of the Interior            (809) 774-8300
Office of Inspector General
Caribbean Region
Federal Building & Courthouse
Veterans Drive, Room 207
St. Thomas, Virgin Islands 00802

North Pacific Region

U.S. Department of the Interior            (700) 550-7279 or
Office of Inspector General              COMM 9-011-671-472-7279
North Pacific Region
238 Archbishop F.C. F1ores Street
Suite 807, PDN Building
Agana, Guam 96910