Audit Reveals Decades Of Government Waste, Fraud and Abuse of Taxpayer Money –

An audit made public by the Workplace of the Inspector Basic 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 had been rampant within the govt department of the federal government of the Virgin Islands, with authorities officers grossly overstepping their authority when spending taxpayer dollars.

Although the scope of the audit was fiscal years 2013 by 2016, the O.I.G. retrieved information relationship again to 2002.

In audit’s govt 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 manipulate 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 had been made with out first acquiring permitted purchases orders.
• Journey bills had been incurred with out authorization.
• A minimum of $199,199 in purchases was made that didn’t conform to procurement rules.
• A minimum of $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 finest practices.
• Of $396,556 in costs reviewed, $31,867 was questioned.
• Bank cards costs with out supporting documentation totaled $17,428.
• Private costs totaled $10,642.
• Journey costs that had been claimed greater than as soon as totaled $three,797.
• Bank card funds weren’t processed well timed, leading to finance costs and late charges.
• $881,167 in bank card costs had been paid late, leading to $23,288 in finance costs and late charges.

“We discovered that the Government Department didn’t have uniform rules to acquire and govern using bank cards and features of credit score. Particularly, there have been no rules to manipulate, at a minimal: (i) how businesses entered into credit score agreements/ strains 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 Government Department businesses that entered into credit score agreements didn’t set up inside controls to make sure, at a minimal, that the expenditures had 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 govt department businesses obtained and managed bank cards and features of credit score. D.O.F. and P&P officers additionally didn’t create inside controls to manipulate the use and accountability for credit score accounts, in response to the O.I.G.

The next record of presidency departments and businesses had been reviewed:

1. Workplace of the Governor
2. The Dept. of Schooling
3. Workplace of the Lt. Governor
4. Bureau of Motor Autos
5. VI Vitality Workplace
6. VI Hearth Service
7. Sports activities, Parks, and Recreation
8. Property and Procurement

The O.I.G. audit discovered that the Dept. of Schooling and the Dept. of Sports activities, Parks and Recreation contacted Property and Procurement or Finance on learn how to proceed in establishing their credit score accounts. “Whereas the 2 businesses sought and acquired recommendation and steering from Finance and Property and Procurement, different businesses independently opened bank cards and features of credit score accounts with industrial retailers and native distributors,” reads the report.

“We discovered that, apart from the Schooling and the Governor’s Workplace’s bank cards, different Government Department businesses didn’t have formal inside insurance policies and procedures for the administration of their credit score accounts. Companies that didn’t set up inside insurance policies and procedures elevated their danger of unauthorized expenditures,” in response to the audit.

The Dept. of Schooling 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 that they had a observe of reconciling month-to-month statements, we discovered that not less than 4 of the eight audited businesses didn’t present enough proof to point out that the company often reconciled their ironmongery store bank cards,” in response to the audit.

For instance:

“The V.I. Vitality Workplace didn’t keep 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 acquired 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 chargeable for sustaining the month-to-month statements. One administrative workers member said that the information might need been misplaced or misplaced. As a result of the ironmongery store statements had 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 Hearth Service, St. Croix Workplace said that they had been unable to conduct reconciliations of their bank card statements as a result of at instances 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 Might 20, 2016 the Governor’s Workplace bought dinnerware costing $Eight,306. As can be accomplished 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 had been obtained nor was there a justification letter. “As well as, we weren’t supplied with an permitted buy order. As an alternative, we discovered that two buy orders had 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; nevertheless, none was supplied.”

Moreover, the O.I.G. discovered that though the dinnerware price was $Eight,306, the quantity charged and paid by two officers totaled $Eight,788. The mixed costs 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 price of $four,035. The Vitality Workplace obtained a purchase order order two and a half months later, on Might 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 receive the acquisition order for these things till Might 12, 2015, in response to 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 sequence 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 receive the acquisition order for these purchases till September 1, 2016, three months after the preliminary transaction.

Private Costs

The Workplace of the Inspector Basic 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 costs, 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 not less than $5,257 in private travel-related prices.

“We discovered that the official didn’t ask the Authorities to pay the $5,173 in ATM costs,” reads the audit report. “The cardholder paid the relevant fiscal yr costs 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 speculated to have pin numbers that may permit them to withdraw money. They had been unaware how the cardholder was in a position to receive a pin quantity.”

The O.I.G. additionally discovered that in Fiscal Years 2013 and 2014, one other official incurred private costs of $9,155.64 and $5,198.68 respectively. For instance, the bank card was used to pay for $three,994 in automotive rental bills not associated to official Authorities enterprise. The official finally settled the costs on April 2, 2015. Particularly, the official charged $2,678 for automotive rental costs 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 automotive rental costs whereas on non-business associated journey to New York, Puerto Rico, and Arizona.

A 3rd Governor’s Workplace official charged $1,263 in private costs for airfare and meals whereas on journey to California on Might 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 response to the report.

Throughout Fiscal Years 2013 by 2016, the O.I.G. discovered that workers of the Bureau of Motor Autos (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 had been bought for “buyer appreciation” days held all year long. “Nevertheless, we query this rationalization primarily based on the price charged, the amount and individualized measurement of the snack gadgets bought throughout every journey. For instance, whereas shopping for provides, the purchaser obtained as little as one 20 ozCoke 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 vital, the O.I.G. discovered that the purchasers spent not less than $212 over the audited interval. The O.IG. questioned how these purchases had 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 had been enterprise associated.

Duplicate Bills

Based on 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 acquired $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. Because of this, the funds had been duplicated when the Authorities paid the bank card balances and supplied the official the money advances,” the O.I.G. mentioned.

For example, the official acquired a money advance totaling $2,425 to attend a gathering in Washington, D.C. The money advance lined transportation, resort, 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 had been paid in full.

“We discovered no proof that the official accounted for using the money advance,” mentioned the O.I.G.

The O.I.G. made suggestions to P&P and the Dept. of Finance to handle administration oversight, procurement, inside controls, and fee course of.