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Charlotte Amalie
Friday, March 29, 2024
HomeNewsArchivesVAN BEVERHOUDT: IG COULD HELP FISCAL RECOVERY

VAN BEVERHOUDT: IG COULD HELP FISCAL RECOVERY

As the Legislature and Government House struggle to work out who will get what in the FY 2000 budget, one agency that could both save money and generate revenues for the V.I. remains severely underfunded and legally disabled.
V.I. Inspector General Steven van Beverhoudt, in an interview with St. Thomas Source, said his Bureau of Audit and Control is not functioning the way it should be due to lack of money and the inability to conduct full-scale investigations (an ability given to IG offices in most other jurisdictions).
Within the original Government Financial Accountability and Short-Term Revenue Enhancement Act of 1999, the Inspector General's Office was to become an independent agency with the power to investigate, including subpoena power. But when the bill was split up and before it was passed by the Legislature, all reference to the IG's office was removed.
The only hope for giving the IG's office the muscle it needs now lies in the omnibus package that will be tied to the FY 2000 budget, according to van Beverhoudt.
He pointed out a few examples of what his office has done to enhance revenues.
In an audit conducted a few years ago on the Roy L. Schneider Hospital, the auditors discovered $102 million in accounts receivable.
The receivables figure for Juan Luis Hospital in a later audit was $72 million.
And the Interior Department did an audit of the Bureau of Internal Revenue that revealed that the bureau was carrying $100 million in outstanding receivables.
The governor's reorganization plan does include van Beverhoudt's wish list for two investigators and an updated auditing system.
"But it's not in the budget," said van Beverhoudt, who has been the Virgin Islands' inspector general for 10 years.
Van Beverhoudt, in his understated manner, said that with Washington telling the V.I. that it needs to get its house in order, it only makes sense that the territorial government's sole accountability arm should be fully functional.
It also makes sense for the IG's office to be able to investigate waste, fraud and abuse, he said.
"If we can hand over a completed investigation to the Attorney General's Office, all they have to do is prosecute."
Asked about prosecution of potentially illegal activities revealed in recent audits, van Beverhoudt said his office was working on a few cases with the AG's office, "but they are without resources, too."
He said the AG has one white-collar-crime investigator working with his auditors, "but he handles other things, too."
In a department that could use 15 professional staff, van Beverhoudt is left with eight. He is also left with oversight responsibility for ongoing audits as well as responsibility for field work.
The department recently got a boost with the nomination of acting Deputy Inspector General Susan I. Andrews. Andrews came to the V.I. from a post in the Marshall Islands.
She says it's not that different here –- waste, fraud and abuse reign.
Andrews pointed out, however, that in the Marshall Islands the IG's office gets a percentage of the budget, which translates to well over $1 million a year. There is no need for the office to fight every year for its appropriation, she said.
The Marshalls, she added, has 39 auditors for a population of 50,000 people. It also has an investigative arm, so the IG's office there was able to conduct an investigation that resulted in a successful prosecution of government officials involved in illegal activities.
"Because we had an investigative arm, we were able to obtain confessions, which made prosecution easier," Andrews said.
Van Beverhoudt explained the difference between an audit and an investigation.
"When we go out on an audit, we can interview people, but we can't put them under oath," he said. Without investigative powers, his office also cannot subpoena records or enforce subpoenas.
The IG's office has functioned through the good graces of the AG's office, which has agreed to issue subpoenas on behalf of the IG.
"If we had the resources we needed, a lot of our findings would be more than just findings and recommendations," van Beverhoudt said. "We would be able to work more toward getting implementation and it would actually allow us to contribute to the five-year financial recovery plan. It would help in bringing in more money to the government or saving money that is being wasted."
The IG said there were a lot of audits he would like to do, but he doesn't have the resources. He has more than 10 requests from agency heads for audits.
He also received a request recently from Central Labor Council President Luis "Tito" Morales for an audit of the $2.8 million in unappropriated funds that went to the Housing Finance Authority over the last two years and the $6.5 million the government owes the Workers' Compensation Fund.
"But I told him, I don't have the resources," van Beverhoudt said. "An audit takes from four to six months from beginning to end."
There are currently three audits ongoing on St. Thomas and one on St. Croix.
"We work in teams of two. Sometimes we have to work in teams of one," a less-than-ideal scenario, according to van Beverhoudt.
Along with a wish list for two investigators, van Beverhoudt said he should have an attorney on staff.
He is working with gubernatorial Chief of Staff Juel Molloy to develop a follow-up system that would require agencies to produce an implementation plan, complete with regular updates. The IG could then revisit key issues, look for roadblocks to implementation and help the department get what it needs to implement the recommendations.
"Without the resources to follow up on recommendations, our reports are just a piece of paper that lies there," Andrews said.
Van Beverhoudt added, "I don't enjoy making recommendations and then going back a few years later to make the same recommendations."

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