An audit made public by the Workplace of the Inspector Normal on Friday unearthed what many Virgin Islanders had lengthy suspected however by no means had proof to backup the claims: that fraud, waste and abuse have been rampant within the government department of the federal government of the Virgin Islands, with authorities officers grossly overstepping their authority when spending taxpayer .
Although the scope of the audit was fiscal years 2013 by 2016, the O.I.G. retrieved data relationship again to 2002.
In audit’s government abstract, the O.I.G. discovered that:
- There have been no uniform rules governing using bank cards and features of credit score.
- There have been no inside controls to control the use and accountability of credit score transactions.
- As a lot as $1.1 million in credit score transactions weren’t shielded from fraud, waste and abuse.
- Credit score purchases have been made with out first acquiring authorized purchases orders.
- Journey bills have been incurred with out authorization.
- At the least $199,199 in purchases was made that didn’t conform to procurement rules.
- At the least $17,295 in journey bills didn’t conform to journey regulation.
- Three businesses used bank card accounts for purchases inconsistent with relevant legal guidelines, insurance policies and procedures, and greatest practices.
- Of $396,556 in fees reviewed, $31,867 was questioned.
- Bank cards fees with out supporting documentation totaled $17,428.
- Private fees totaled $10,642.
- Journey fees that have been claimed greater than as soon as totaled $three,797.
- Bank card funds weren’t processed well timed, leading to finance fees and late charges.
- $881,167 in bank card fees have been paid late, leading to $23,288 in finance fees and late charges.
“We discovered that the Govt Department didn’t have uniform rules to obtain and govern using bank cards and features of credit score. Particularly, there have been no rules to control, at a minimal: (i) how businesses entered into credit score agreements/ traces of credit score, (ii) the variety of bank cards; (iii) the credit score limits; and (iv) the approval means of workers/officers licensed to make use of bank cards and/or have entry to the businesses’ line of credit score,” reads the audit. “As well as, some Govt Department businesses that entered into credit score agreements didn’t set up inside controls to make sure, at a minimal, that the expenditures have been licensed, legitimate, and enterprise associated, or that corrective motion was taken when officers misused the bank card accounts.”
The O.I.G. attributed these situations to the shortage of established rules within the Dept. of Finance and Property and Procurement on how government department businesses obtained and managed bank cards and features of credit score. D.O.F. and P&P officers additionally did not create inside controls to control the use and accountability for credit score accounts, in accordance with the O.I.G.
The next record of presidency departments and businesses have been reviewed:
- Workplace of the Governor
- The Dept. of Training
- Workplace of the Lt. Governor
- Bureau of Motor Automobiles
- VI Vitality Workplace
- VI Fireplace Service
- Sports activities, Parks, and Recreation
- Property and Procurement
The O.I.G. audit discovered that the Dept. of Training and the Dept. of Sports activities, Parks and Recreation contacted Property and Procurement or Finance on tips on how to proceed in establishing their credit score accounts. “Whereas the 2 businesses sought and obtained recommendation and steerage from Finance and Property and Procurement, different businesses independently opened bank cards and features of credit score accounts with business retailers and native distributors,” reads the report.
“We discovered that, apart from the Training and the Governor’s Workplace’s bank cards, different Govt Department businesses didn’t have formal inside insurance policies and procedures for the administration of their credit score accounts. Businesses that didn’t set up inside insurance policies and procedures elevated their threat of unauthorized expenditures,” in accordance with the audit.
The Dept. of Training enforced the insurance policies and procedures established for credit score use, the audit discovered. “But though the Workplace of the Governor created insurance policies for credit score use, these insurance policies weren’t enforced,” reads to the audit report.
“Though company officers indicated that they’d a apply of reconciling month-to-month statements, we discovered that a minimum of 4 of the eight audited businesses didn’t present ample proof to indicate that the company recurrently reconciled their ironmongery store bank cards,” in accordance with the audit.
“The V.I. Vitality Workplace didn’t preserve their bank card month-to-month statements. After we inquired in regards to the statements, an official knowledgeable us that the company won’t have obtained the statements from the seller.
“Sports activities, Parks & Recreation didn’t have, on file, any of their Fiscal Yr 2016 bank card month-to-month statements. Sports activities, Parks & Recreation administrative staffers expressed confusion as to who was accountable for sustaining the month-to-month statements. One administrative employees member said that the data might need been misplaced or misplaced. As a result of the ironmongery store statements have been unavailable, we couldn’t confirm if the company reconciled its month-to-month statements to make sure that the company solely paid legitimate bills.
“The Lt. Governor’s Workplace didn’t present their bank card statements for Fiscal years 2013 and 2014 and most of 2016.
“Officers with the VI Fireplace Service, St. Croix Workplace said that they have been unable to conduct reconciliations of their bank card statements as a result of at occasions they didn’t obtain the statements. Whereas, the St. Thomas officers couldn’t adequately reconcile their ironmongery store bank card statements, as a result of the purchasers didn’t at all times present detailed receipts of the gadgets bought,” reads the audit report.
The report discovered that officers throughout the Workplace of the Governor spent $61,559 utilizing their bank card with out pre-approved buy orders. For instance, on Could 20, 2016 the Governor’s Workplace bought dinnerware costing $Eight,306. As could be finished in regular circumstances and in conformance with requirement for purchases that exceeds $5,000, however throughout its investigation, the O.I.G. didn’t discover proof that three quotes have been obtained nor was there a justification letter. “As well as, we weren’t supplied with an authorized buy order. As an alternative, we discovered that two buy orders have been created, one on June 28, 2016 and one other on July 5, 2016, to cowl the price discovered on the bank card accounts. Governor’s Workplace personnel indicated that there was a justification letter; nonetheless, none was supplied.”
Moreover, the O.I.G. discovered that though the dinnerware value was $Eight,306, the quantity charged and paid by two officers totaled $Eight,788. The mixed fees and funds exceeded the price of the dinnerware by $482. Inquiry with officers on the Governor’s Workplace revealed that this discrepancy went unnoticed.
The Vitality Workplace officers bought $14,771 in merchandise utilizing their ironmongery store card earlier than acquiring a purchase order order. For instance, the company bought water heaters and different gadgets totaling $Eight,099. Particularly, on March 15, 2013, the Vitality Workplace purchased 15 water heaters at a complete value of $four,035. The Vitality Workplace obtained a purchase order order two and a half months later, on Could 29, 2013. Once more on April 16, 2015, the Vitality Workplace bought ten water heaters and 6 air conditioners for $four,zero64. The Vitality Workplace didn’t get hold of the acquisition order for these things till Could 12, 2015, in accordance with the audit.
Elsewhere, Sports activities, Parks and Recreation spent $10,381 on merchandise with out first acquiring a purchase order order, the O.I.G. report discovered. For instance, the company made a collection of purchases on June three, 14, and 17, 2016, and spent a mixed $Eight,377 on merchandise utilizing the company’s ironmongery store card. The division didn’t get hold of the acquisition order for these purchases till September 1, 2016, three months after the preliminary transaction.
The Workplace of the Inspector Normal discovered that some officers of the Governor’s Workplace used the federal government’s bank cards to cost $10,430 in private bills. Though the officers paid these fees, the Governor’s Workplace bank card insurance policies restricted using the bank card to official journey and office-related bills. Particularly, throughout Fiscal Yr 2013 by 2014, one cardholder used the bank card to acquire $5,173 in money advances by sixteen ATM withdrawals, whereas two different officers spent a minimum of $5,257 in private travel-related prices.
“We discovered that the official didn’t ask the Authorities to pay the $5,173 in ATM fees,” reads the audit report. “The cardholder paid the relevant fiscal yr fees by August 13, 2013, and by November 20, 2014. After we inquired with Enterprise Workplace officers in regards to the ATM withdrawals they indicated that cardholders weren’t purported to have pin numbers that will enable them to withdraw money. They have been unaware how the cardholder was capable of get hold of a pin quantity.”
The O.I.G. additionally discovered that in Fiscal Years 2013 and 2014, one other official incurred private fees of $9,155.64 and $5,198.68 respectively. For instance, the bank card was used to pay for $three,994 in automobile rental bills not associated to official Authorities enterprise. The official ultimately settled the costs on April 2, 2015. Particularly, the official charged $2,678 for automobile rental fees whereas on journey to New York, Arizona, and Washington, D.C. in November 2012 and January 2013. Equally, in November and December of 2013, the official charged $1,316 in automobile rental fees whereas on non-business associated journey to New York, Puerto Rico, and Arizona.
A 3rd Governor’s Workplace official charged $1,263 in private fees for airfare and meals whereas on journey to California on Could 18, and June 7-Eight, of 2013. Once more, though the official paid the prices on September 10, 2013, the bank card coverage prohibited using the cardboard for private bills, in accordance with the report.
Throughout Fiscal Years 2013 by 2016, the O.I.G. discovered that workers of the Bureau of Motor Automobiles (BMV) used the company’s ironmongery store credit score account to buy $212 in snacks whereas shopping for provides for the company. When requested, company officers said that the snacks have been bought for “buyer appreciation” days held all year long. “Nonetheless, we query this rationalization primarily based on the price charged, the amount and individualized dimension of the snack gadgets bought throughout every journey. For instance, whereas shopping for provides, the purchaser obtained as little as one 20 ouncesCoke for $1.87, one sweet for $zero.98, and one bag of chips for $1.09,” reads the audit report.
Though the worth of every merchandise was not important, the O.I.G. discovered that the purchasers spent a minimum of $212 over the audited interval. The O.IG. questioned how these purchases have been allowed to proceed with out administration’s scrutiny. The Bureau’s administration said that the ironmongery store card was to purchase cleansing, working, and upkeep provides. The O.I.G. discovered no proof that these snack purchases have been enterprise associated.
In line with the report, a Lt. Governor’s Workplace official charged travel-related bills on the Authorities issued bank card, though money advances had already been issued. Throughout Fiscal Years 2013 by 2014, the official obtained $three,797 in money advances to cowl particular journey bills. Though the Authorities supplied the official with money advances, the official didn’t use the money for its issued goal. As an alternative, the official charged, and the Authorities paid, the journey bills charged on the bank card, the audit discovered.
“We noticed no proof that the official accounted for, or returned, the money advances issued for a similar goal. Consequently, the funds have been duplicated when the Authorities paid the bank card balances and supplied the official the money advances,” the O.I.G. stated.
For instance, the official obtained a money advance totaling $2,425 to attend a gathering in Washington, D.C. The money advance coated transportation, lodge, and meals. The official charged the identical prices to the bank card for a complete of $2,149. Additional evaluation revealed that the bank card bills have been paid in full.
“We discovered no proof that the official accounted for using the money advance,” stated the O.I.G.
The O.I.G. made suggestions to P&P and the Dept. of Finance to deal with administration oversight, procurement, inside controls, and fee course of.