The Office of the Virgin Islands Inspector General has issued the audit of the administrative functions of the Virgin Islands Casino Control Commission (Casino Commission). The audit objective was to determine whether the Casino Commission effectively utilized its resources and carried out its administrative functions in accordance with established laws, rules and regulations, policies and procedures, and best practices for government agencies.
Our audit found that the Casino Commission was not effectively utilizing its resources to carry out its administrative functions in accordance with established laws, rules and regulations, policies and procedures and best practices. Specifically, the Casino Commission: (i) did not have formal procedures for authorizing, processing, recording, reviewing, and reconciling financial transactions; (ii) allowed members to incur $851,534 in credit card transactions and made $808,229 in payments to the credit card issuer without any formal review or approval process in place; (iii) allowed the Chairperson to process $1,062,860 in electronic fund transfers without another employee or Casino Commission member reviewing or authorizing the payments; (iv) allowed the Chairperson to process, $2,660,163 in check payments, reconcile bank statements and maintain sole custody of financial records; (v) did not submit required financial reports timely to the Department of Finance and the Virgin Islands Legislature; (vi) incurred operating expenditures totalling more than $3,772,803, of which, $1,315,635 was not supported with proper documentation; (vii) expended $680,172 in travel and travel-related expenses without having established formal travel policies and procedures; (viii) ignored the Government-wide travel policy while it did not implement a formal travel policy of its own; (ix) did not provide supporting documentation for $488,674 of travel and travel-related expenses; (x) did not implement internal procedures to ensure that travel expenses were properly controlled and accounted for; and, (xi) did not follow the procurement laws of the Government in obtaining professional services.
We attribute these conditions to the failure of the Casino Commission to: (i) develop internal policies and procedures; (ii) establish an internal control system to ensure, at a minimum, the separation of duties and adequate reviews; (iii) follow the requirements of the Code that requires the Casino Commission to submit financial reports and accompanying receipts to Finance and the Legislature; (iv) establish a system of checks and balances by the Casino Commission members, rather than allowing the Chairperson to assume sole responsibility for processing payments and maintaining supporting documents; (v) follow the Government-wide travel regulations; (vi) require supporting documentation to justify travel expenses; and, (vii) adhere to the procurement policies of the Government, or to implement policies and procedures of its own.
As a result: (i) in accordance with professional standards, whereas the Casino Commission’s oversight body and/or management should have developed internal controls, one person performed all critical financial management functions without input from the other Casino Commission members; (ii) numerous expenses are questionable due to the lack of documentation needed to verify the legitimacy of the expenses relative to the daily operations of the Casino Commission; (iii) numerous travel and travel-related expenses did not conform to the Government-wide travel policy; (iv) many of the travel and travel-related expenses were unsupported and are considered questionable in terms of their relation to the daily operations of the Casino Commission; and (v) professional services were obtained and contracts were executed by the Casino Commission that did not conform to the Government procurement policies or other best practices guidelines.
We made several recommendations to address the conditions and causes cited in the report. Our recommendations addressed the following areas: (i) internal controls; (ii) operating expenses; (iii) travel expenses; and, (iv) contracting. To view the report, click here.