The Office of the Virgin Islands Inspector General released its Fiscal Year 2017 Audit Plan. Among the various audits planned for 2017, the V. I. Inspector General’s Office hopes to complete seven projects still in progress during Fiscal Year 2016, to include: the Audit of the Controls over the Department of Education’s School Lunch Program, the Audit of the Child Nutrition Programs Claims and Reimbursement Controls, the Audit of the Public Finance Authority (Joint Project OVIIG/OIG-DOI), the Follow-up on the Handling of Funds Received During the Property Tax Auctions, the Audit of the Administrative Functions of the Casino Control Commission, the Audit of the Administrative Functions of the Board of Education, and the Audit of the Executive Branch’s Use of Credit Instruments. To view the 2017 Audit Plan, Click here.

The Office of the Virgin Islands Inspector General has issued the inspection report of the Alternative Investment Program administered by the Government Employees Retirement System (GERS). We found that the Alternative Investment Program as administered by GERS is not meeting the intended purpose of safely increasing the return on investments. Specifically, (i) viatical senior and/or life settlements (viatical) and some real estate investments considered by the industry as alternative investments are not included in the alternative investments section of the Code; (ii) GERS’ current non-traditional investments limit is higher than the industry standards; (iii) in the 2005 revisions to the Code, there are two sections dealing with alternative investments and one section dealing with viatical; (iv) a 2015 revision to the Code added five additional categories of alternative investments; (v) GERS entered into loan agreements that were not authorized under the Alternative Investment Program or any other authority as defined by the Code; (vi) the interest rate charged for four of the loans was below the rate charged to GERS members and the industry desired investment rate of return; (vii) GERS entered into an extremely risky and questionable viatical investment; (viii) GERS also granted a $10 million line of credit to the same Partnership that is handling the viatical investment; (ix) GERS entered into numerous agreements and investments without performing the necessary due diligence evaluation to ensure limited risk and a reasonable rate of return on the funds used; (x) GERS did not conduct efficient monitoring and oversight activities of investments under the Alternative Investment Program to protect GERS’ interest; and, (xi) GERS did not establish any procedures, policies, or benchmarks to ensure that funds were being utilized for the requested purpose of the investments. To view the report, click here.