Audit of the Economic Development Program Administered by the Economic Development Authority

The Office of the Virgin Islands Inspector General has issued the audit report on the Economic Development Program Administered by the Economic Development Authority. Although the Authority had a positive impact in promoting the growth, development, and diversification of the Territory’s economy, there was need for improvements in its administration of the Economic Development Program. Specifically, we found that the EDA (i) does not have a mechanism in place to require the timely measurement, assessment and reporting of the overall economic and fiscal impact of the Economic Development Program on the Territory’s economy, (ii) does not promote higher levels of participation by certain business types found to have a relatively low economic and fiscal impact on the Territory, (iii) recommended recent changes to the tax benefits law that have created a potential “business welfare” program by providing beneficiaries with 100% benefits for 40 to 50 years, (iv) used rules and regulations that contradicted the Code regarding extension of benefits, (v) in extending benefits, granted full benefits to beneficiaries not eligible to receive them at that level under the law, (vi) granted extension of benefits in numbers and durations in excess of what was allowed under the law, (vii) performed infrequent compliance reviews, (viii) did not effectively ensure that beneficiaries complied with reporting requirements, (ix) did not always promptly inform regulatory agencies of changes in the certificate statuses of beneficiaries, (x) did not consistently adhere to the time requirements for the various phases of the application process, (xi) did not adequately monitor the collection of information needed to process applications for economic development benefits, and (xii) did not always process applications in an organized and systematic manner. To view the report, click here.