The Office of the Virgin Islands Inspector General has issued the final report on the follow-up inspection on real property tax auctions. The objective of the inspection was to determine: (i) if Lieutenant Governor’s Office officials correctly paid property owners the net proceeds generated from sold properties, and (ii) if Lieutenant Governor’s Office officials deducted and accounted for the taxes and public sewer system user fees, penalties and costs as prescribed by the Title 33 Section 2547 (c) of the Virgin Islands Code.
We found that Lieutenant Governor’s Office officials incorrectly paid some property owners the net proceeds collected at real property tax auctions held territory-wide. The inaccurate payments were the direct result of Lieutenant Governor’s Office officials’ decision to include added expenses not previously included in the opening bids (cost) of the properties sold. Specifically,we found that officials: (a) increased the interest rates used to determine the property tax penalty; (b) added previously excluded penalties and costs from the opening bid price; (c) added unbilled property tax obligations that became payable after the auction occurred; (d) added other property tax obligations that remained unbilled on the date of redemption; and, (e) increased the administrative costs charged to the sold properties. Lieutenant Governor’s Office officials did not accurately account for the taxes and public sewer system fees collected from the sold properties. The officials did not ensure that the recording of taxes paid on the property tax records reconciled with the payments collected at the auctions. Forty-two of forty-nine net proceeds payments were either overpaid or underpaid. Specifically, officials made 5 overpayments totaling $19,484 and 37 underpayments totaling $91,048.
We also found that Lieutenant Governor’s Office officials did not deduct and place into the General Fund the taxes, penalties, and costs portions of the monies collected from sold properties. In addition, Lieutenant Governor’s Office officials waived uncollected property tax revenue by simply writing those taxes off the collection records.
All of the recommendations made in the report were resolved and implemented. To view the report, click here.