Summary
American Samoa, a U.S. territory, relies on federal funding to support government operations and deliver critical services. The Secretary of the Interior has administrative responsibility for coordinating federal policy in the territory. Under the Single Audit Act of 1996, American Samoa is required to perform a yearly single audit of federal grants and other awards to ensure accountability. To better understand the role of federal funds in American Samoa, GAO (1) examined the uses of 12 key grants in fiscal years 1999-2003, (2) identified local conditions that affected the grants, and (3) assessed accountability for the grants.
In fiscal years 1999-2003, 12 key federal grants supported essential services in American Samoa. These services included support for government operations, infrastructure improvements, nutrition assistance, the school system, special education, airport and highway infrastructure improvements, Medicaid, and early childhood education. A shortage of adequately trained professionals, such as accountants and teachers, as well as inadequate facilities and limited local funds hampered service delivery or slowed project completion for many of the grants. For example, American Samoa's only hospital lacked an adequate number of U.S.-certified medical staff. Further, the hospital had persistent and serious fire-safety code deficiencies that jeopardized its ability to maintain the certification required for Medicaid funding. American Samoa's failure to complete single audits, federal agencies' slow reactions to this failure, and instances of theft and fraud limited accountability for the 12 grants to American Samoa. The American Samoa government did not comply with the Single Audit Act during fiscal years 1998-2003. The 1998-2000 audit reports, completed in 2003, and the 2001 audit report, completed in 2004, cited pervasive governmentwide and program-specific accountability problems. Despite the audits' delinquency, federal agencies were slow, or failed, to communicate concern to the American Samoa government or to take corrective action. In addition, accountability for all of the grants was potentially undermined by instances of theft and fraud. For example, the American Samoa Chief Procurement Officer, whose office handles procurements for most of the grants GAO reviewed, was convicted of illegal procurement practices.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
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David B. Gootnick
Government Accountability Office: International Affairs and Trade
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Recommendations for Executive Action
Recommendation: To ensure resolution of fire-safety deficiencies threatening the continued certification of the Lyndon Baines Johnson Tropical Medical Center in American Samoa and, as warranted, to address the hospital's staffing and resource constraints, the Secretary of the Interior should coordinate with federal agencies that grant funds to the hospital and the American Samoa government to address these issues.
Agency Affected: Department of the Interior
Status: Implemented
Comments: In December 2004, GAO recommended (AMERICAN SAMOA: Accountability for Key Federal Grants Needs Improvement GAO-04-41, 12/17/2004) that Interior use its authority to coordinate with federal agencies that grant funds to the Lyndon Baines Johnson Tropical Medical Center in American Samoa to ensure the resolution of fire-safety deficiencies threatening the continued certification of the hospital and, as warranted, to address the hospital's staffing and resource constraints. The Interior stated in its April 7, 2005 response to the final report that the Office of Insular Affairs (OIA) had already approved grant funding for repairs and that the OIA met with American Samoa Government (ASG) officials in March 2007 and had committed to fund an assessment and fiscal reform plan for the Medical Center. We followed up on this recommendation to ensure that the grant funding corrected the fire safety deficiencies. OIA provided a more recent response on the status of the LBJ sprinkler systems that consisted of: 1) February 15, 2007 letter from the LBJ Medical Center Plant Operations stating that all current areas fitted with the automatic fire sprinkler system are hooked up with water and fully functional. This letter stated the fire sprinkler system is inspected monthly and any and all discrepancies are immediately documented and corrected, 2) February 13, 2007 letter, from Kooline American Samoa stating the same information, 3) October 18, 2005 Progress Update Report from the LBJ Medical Center on their Live Safely Plans of Correction covering July 1 through September 30, 2005, 4) LBJ Medical Center Status Report showing status of corrections of Life Safety deficiencies as of September 30, 2005.
Recommendation: To improve fiscal accountability of federal grants to American Samoa, the Secretary of the Interior should coordinate with other federal awarding agencies to designate the American Samoa government as a high-risk grantee, according to the Grants Management Common Rule, at least until it has completed all overdue single audits.
Agency Affected: Department of the Interior
Status: Implemented
Comments: In December 2004, GAO recommended that Interior use its authority to coordinate among granting agencies a high-risk grantee designation for American Samoa. On May 13, 2005, the Appropriations Committee reported language drafted by GAO to implement our recommendation. House Report 109-80 on the Interior Department appropriation stated that the Committee had reviewed a recent GAO report concerning accountability for key Federal grants to American Samoa. The Committee observed that through Presidential delegation, the Secretary of the Interior exercises ultimate control and responsibility for, and has authority to take a proactive role in, the administration of the Territory of American Samoa. The Committee urged the Secretary to use this authority to coordinate with all Federal agencies that award funds to American Samoa and to encourage the other agencies to consider designating American Samoa a high-risk grantee under the Grants Management Common Rule. The Committee noted that a coordinated approach to designation could include a common, basic set of special conditions to be applied by all Federal grant awarding agencies to grants to American Samoa. The designation could also include a basic set of corrective actions that American Samoa must take, including earning clean single audit opinions for two consecutive years before the special conditions are removed. The Committee also urged the Secretary to clearly assign staff responsibility for coordinating Federal activities in American Samoa. On June 9, 2005, the Deputy Assistant Secretary of the Interior announced that the Department of the Interior Office of Insular Affairs was designating the American Samoa Government as a high-risk grantee as a tool to bring other Federal agencies in to do their fair share to support the fiscal reform process in American Samoa. The Deputy Assistant Secretary said that to be removed from high risk category, the American Samoa Government would have to satisfy three conditions: 1) the government would have to complete Single Audits by the statutory deadline, resulting in materially clean opinions, for two consecutive years; 2) the American Samoa Government must have a balanced budget for two consecutive years, without regard for nonrecurring windfalls such as insurance settlements; and 3) the government would have to remain in compliance with the Memorandum of Agreement executed by then Governor Tauese Sunia and the Department of the Interior in 2002, as well as the related fiscal reform plan. This action implemented GAO's major recommendation.
Recommendation: To improve fiscal accountability of federal grants to American Samoa, the Secretary of the Interior should coordinate with other federal awarding agencies to take steps designed to ensure that the American Samoa government completes its overdue single audits in compliance with the Single Audit Act.
Agency Affected: Department of the Interior
Status: Implemented
Comments: In order to improve fiscal accountability of federal grants to American Samoa, GAO recommended in December 2004 (AMERICAN SAMOA: Accountability for Key Federal Grants Needs Improvement, 12/17/04) that Interior should coordinate with other federal awarding agencies to take steps designed to ensure that the American Samoa Government completed its overdue single audits in compliance with the Single Audit Act. When the GAO-05-41 report was published, the fiscal year 2002 Single Audit Report was 17 months late and the 2003 report was 5 months late. Interior stated in its April 7, 2005, response to the final report that the Office of Insular Affairs (OIA) had devoted significant resources in a comprehensive approach to helping the American Samoa Government (ASG) complete its overdue Single Audits. Their response also stated that the OIA staff developed monitoring procedures for all of the territories and continuously communicated with the auditees to help resolve issues and ensure progress. They stated that this comprehensive approach helped the ASG to complete five of its seven overdue audits and that completion of the remaining two audits for fiscal years 2003 and 2004 was expected by the end of 2005. OIA hired an Accountability Policy and Audit Liaison Officer in 2004 to assist in the correction of systemic problems regarding the insular governments' administration of all of their Federal grant programs. In the December 2006, GAO-07-119, report on Insular Areas, GAO reported that American Samoa improved on the timeliness of their audit reports and that the 2005 Single Audit report was submitted by the due date. The OIA Accountability Officer provided a November 1, 2007, report from the Federal Audit Clearing House showing that the Single Audit reports were up to date.
Recommendation: To improve fiscal accountability of federal grants to American Samoa, the Secretary of the Interior should coordinate with other federal awarding agencies to take steps designed to ensure that current and future single audits are completed in compliance with Single Audit Act requirements.
Agency Affected: Department of the Interior
Status: Implemented
Comments: In order to improve fiscal accountability of federal grants to American Samoa, GAO recommended in December 2004 (AMERICAN SAMOA: Accountability for Key Federal Grants Needs Improvement, 12/17/04) that Interior should coordinate with other federal awarding agencies to take steps designed to ensure that the American Samoa Government completed its current and future single audits in compliance with the Single Audit Act. Interior stated in its April 7, 2005, response to the final report that the Office of Insular Affairs (OIA) had devoted significant resources in a comprehensive approach to keeping the American Samoa Government (ASG) current and in compliance with the Single Audit Act. They said that they sponsored a Federal Grants Programs Accountability and Audit Conference in June 2007, where important concerns addressed were workshops on resolving systemic problems that contribute to recurring findings identified in the annual single audit reports. Key officials of the ASG attended this conference including the Treasurer, Director of Federal Programs, Controller, and various Department directors. The OIA also said that they continue communication with conference participants and other Federal partners through the Interagency Group on Insular Affairs. The OIA Accountability Officer provided a November 1, 2007, report from the Federal Audit Clearing House showing that the Single Audit reports were up to date.
