The Office of the Virgin Islands Inspector General released its Fiscal Year 2021 Audit Plan. Among the various audits planned for 2021, the V. I. Inspector General’s Office hopes to complete six projects still in progress during Fiscal Year 2020, to include: Audit of Contract Administration at the VI Waste Management Authority, Audit of Contract Administration at the Governor Juan F. Luis Hospital, Audit of Specific Accounts for the Department of Agriculture, Inspection of Procedures to Control Reemployment of Retired Government Employees, Inspection of the Use of Loan Proceeds from the Government Employees Retirement System, and Inspection of the Costs Associated with Converting WAPA’s Fuel Usage to Propane Gas. To view the 2021 Audit Plan, Click here.

The Office of the Virgin Islands Inspector General has issued the audit of the specific administrative function of the Virgin Islands Board of Education. Our audit objective was to determine whether the Board carried out selected administrative functions related to retirement matters, financial controls, and contract administration, in accordance with established laws, policies and procedures, and rules and regulations. Our objective did not include the examination or review of the Board’s administrative functions regarding its loan and scholarship, and teacher certification programs.

Our audit found that the Board was not in compliance with various statutes of the Code and Executive Orders, in regards to retirement matters, financial controls, and contract administration. Specifically, the Board: (i) made unauthorized payments to an employee for a personal retirement account outside of the Government Employees’ Retirement System (GERS); (ii) violated the Code regarding the employment of a retired employee; (iii) did not clearly define the official duties for Board members to receive stipends; (iv) paid stipends in excess of the amount required by the Code; (v) paid Board members stipends while they were already being paid for regular working hours at their Government jobs; (vi) lacked effective controls over stipend payments; (vii) did not maintain sufficient meeting transcripts and committee reports; (viii) paid a higher travel per diem than what is allowed by the Government’s Travel Regulations; (ix) did not properly account for travel cash advances; (x) established two checking accounts without the knowledge and authorization of the Department of Finance (Finance); (xi) did not use one of the two checking accounts in accordance with its intended purpose; (xii) entered into contractual agreements without the approval and legal sufficiency of the Department of Property and Procurement (Property and Procurement) and the Department of Justice (Justice); and, (xiii) did not effectively monitor its contracts.

We attributed these conditions to: (i) the Board’s failure to follow the Code relative to the employee’s required membership in GERS; (ii) the Division of Personnel’s (Personnel) failure to question the deviation from the norm in the processing of the employee’s appointment documents; (iii) Finance’s failure to question payments to the employee from funds specifically intended for the Government’s retirement contributions to GERS; (iv) the Board’s failure to not properly monitor employment contracts with a contracted retiree; (v) the Board not considering stipend policies to be a priority; (vi) the Board allocating a $75 stipend instead of the $50 amount stipulated by the Code; (vii) the Board neglecting to monitor stipend payments; (viii) the Board not implementing adequate policies and procedures regarding stipends; (ix) the Board failing to implement adequate policies and procedures regarding its meeting transcripts and committee reports; (x) the Board allocating $125 instead of the $75 travel per diem rate required by the Government’s Travel Regulations; (xi) the Board not following the Government’s Travel Regulations; (xii) the Board not complying with Finance Memorandum No. 027-2010 regarding Government entities’ checking accounts; (xiii) the Board not following procurement laws of the Code; and, (ivx) the Board neglecting its management responsibilities over contract monitoring.

As a result, the Board: (i) expended a total of $141,853 over a ten-year period to an employee for a personal retirement account; (ii) allowed a contracted retiree to work more than the 600-hour limit, and to receive more than the $55,000 salary limit mandated by the Code; (iii) gave Board members free reign to claim stipends for various activities that could not be verified as official duties; (iv) overpaid stipends by as much as $9,925 in Fiscal Year 2016; (v) paid an extra $2,700 in stipends to Board members who were already being paid by their Government jobs; (vi) overpaid travel per diems by at least $34,800; (vii) did not ensure the repayment of a $1,992 cash advance payment to one of its members; (viii) expended over $2 million dollars from the checking accounts outside the purview of Finance in violation of Finance Memorandum No. 027-2010, thus placing these funds at risk; (ix) disbursed over $569,558 in contracts without the involvement of Property and Procurement; and, (x) paid $588,164 to a non-licensed contractor.

We made several recommendations to address the conditions and causes cited in the report. Our recommendations addressed the following areas: (i) retirement issues; (ii) financial controls; and, (iii) contract administration. To view the report, click here.

The Office of the Virgin Islands Inspector General has issued the audit of Executive Branch credit cards and lines of credit practices and procedures. The audit objective was to determine if standard policies and procedures, practices and financial controls, exercised by Executive Branch agencies over the use of, and payment on, Government credit instruments are sufficient and adequate to safeguard Government funds.

We found that standard policies and procedures, practices and financial controls exercised by Executive Branch agencies over the use of, and payment on, Government credit instruments were not sufficient and adequate to safeguard Government funds. Specifically: (i) Department of Finance and Department of Property and Procurement officials did not establish standard regulations to govern how Executive Branch agencies entered into and managed credit card/lines of credit agreements; (ii) Executive Branch agencies used the credit card/lines of credit to make purchases without first obtaining purchase orders, or to travel without proper authorization; (iii) agency officials (a) submitted $17,428 in credit card expenses that were not supported by documentation to identify the items purchased, or their purpose; (b) charged $10,642 in unauthorized personal expenses; and (c) submitted $3,797 in duplicate expenses when cash advances and credit card charges covered the same costs; (iv) agency officials did not process payments totaling $881,167 in the timeframe required by law; and, (v) agency officials who were responsible for directly making payments to the credit card company on behalf of the Government did not always remit the full amount the Government provided, but instead made partial payments.

We attribute these conditions to: (i) Property and Procurement and Finance officials not being aware of the extent to which credit instruments were used in the Executive Branch; (ii) agency officials not establishing effective internal controls to manage the use of the credit instruments to protect against the financial risk of fraud, waste, and abuse; (iii) agency officials not requiring supporting documents to justify cash advances and credit account expenses; (iv) agency officials not adhering to the procurement policies of the Government; (v) agencies not following the Government-wide travel regulations; and, (vi) agency officials not adhering to payment regulations, as well as not ensuring that cardholders, responsible for paying on assigned credit accounts, remit payments timely.

As a result: (i) at least $1.1 million in credit transactions were not adequately protected, and thus placed at risk for fraud, waste, and abuse; (ii) credit purchases totaling at least $199,199 were made that did not conform to the Government’s procurement policies; (iii) travel and travel-related expenses totalling at least $17,295 did not conform to Government-wide travel regulations; (iv) Executive Branch agency officials could not ensure that credit account expenditures were legal, appropriate, and consistent with their operations; and, (v) $881,167 in credit account charges was paid late, causing $23,288 in finance charges and late fees.

We have made several recommendations to address the conditions and causes cited in this report. Our recommendations address the following areas: (i) management oversight; (ii) procurement; (iii) internal controls; and, (iv) payment process. To view the report, click here.

The Office of the Virgin Islands Inspector General released its Fiscal Year 2020 Audit Plan. Among the various audits planned for 2020, the V. I. Inspector General’s Office hopes to complete seven projects still in progress during Fiscal Year 2019, to include: the Audit of the Administrative Functions of the Board of Education, Audit of Contract Administration at the VI Waste Management Authority, Audit of Contract Administration at the Governor Juan F. Luis Hospital, Audit of Specific Accounts for the Department of Agriculture, Inspection of Procedures to Control Reemployment of Retired Government Employees, Inspection of the Use of Loan Proceeds from the Government Employees Retirement System, and Audit of the Contract Converting WAPA’s Fuel Usage to Propane Gas. To view the 2020 Audit Plan, Click here.