DOI Supported Government Operations and Infrastructure Improvements

In fiscal years 1999-2003, DOI provided grants that supported government  operations and infrastructure improvements in American Samoa. In  particular, the LBJ Hospital building had persistent fire-safety deficiencies  that jeopardized the hospital’s ability to maintain the certification required  for continued Medicaid funding. LBJ Hospital officials reported that they did not have an adequate  number of U.S.-certified medical doctors or registered nurses, despite  incentive programs to attract them. Limited Local Funds Hampered Service Delivery and Slowed Project Completion

Limited local resources also affected some of the programs in our review. Grants Had Limited Accountability, and U.S. The American Samoa  government did not comply with the Single Audit Act during fiscal years  1998-2003. In addition, two grants had instances of theft and fraud, and  the accountability of almost all of the grants was potentially compromised  by fraud in the American Samoa Government’s Office of Procurement. The single audit reports for fiscal years 1998-2001 cited pervasive  governmentwide and program-specific accountability problems. Examples of theft or fraud are as follows:  In May 2004, the Chief Procurement Officer of the American Samoa  Government was found guilty of illegal procurement practices. These  challenges included a shortage of adequately trained professionals, such as  accountants and teachers, as well as inadequate facilities and limited local  funds. To improve fiscal accountability of federal grants to American Samoa, we  recommend that the Secretary 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;   take steps designed to ensure that the American Samoa government  completes its overdue single audits in compliance with the Single Audit  Act; and  take steps designed to ensure that current and future single audits are  completed in compliance with Single Audit Act requirements. Delegate from American Samoa, we (1)  examined the uses of key federal grants to American Samoa, (2) identified  local conditions that affected the grants, and (3) assessed accountability  for the grants. Examining the Uses of Key Federal Grants

To examine the uses of key federal grants to American Samoa, we collected  and reviewed grant data from the federal and local agencies responsible for  overseeing the selected programs in fiscal years 1999-2003; interviewed  federal and American Samoa program officials to obtain knowledge of  program activity and operations; conducted site visits to observe programs  and projects funded by federal grants; and compared data in single audit  reports for fiscal years 1998-2001 with agency data for selected grants and  background on total federal grants reported by the American Samoa  government. Territorial Highway subprogram. Early Childhood Education, the  territory’s only Head Start grantee, is part of the American Samoa  Department of Education.
Why GAO Did This Study

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.

What GAO Found

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.