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Charlotte Amalie
Tuesday, May 21, 2024
HomeNewsArchives'CHAOS' IN IRB COMES THROUGH TO FINANCE PANEL

'CHAOS' IN IRB COMES THROUGH TO FINANCE PANEL

Sen. Lorraine Berry's worst fears were confirmed Thursday as the Senate Finance Committee held its long-awaited Internal Revenue Bureau hearing with Louis Willis, new acting bureau director, and several members of his staff.
A computer system in "chaos," mismanagement, personnel problems, funding problems and lack of expertise in handling a new computer system were among problems addressed.
However, Willis said that with an $11 million appropriation in fiscal year 2001 and reorganization of the bureau he could have it running efficiently, collecting taxes and bringing in revenue – or "send me home." In spite of all the problems, he said, IRB employees are doing a "tremendous job."
Willis, who has been in his new post for barely two weeks, didn't offer a time frame for the reorganization.
Scheduled for 2 p.m., the Finance Committee meeting actually got started at 3:30 after a lunch break from a morning session that ran late, concluding after 2. The hearing had initially been scheduled for July 6, when then-IRB director Claudette Farrington and 20 of her supervisors had been subpoenaed to appear. But on July 5, Gov. Charles W. Turnbull abruptly transferred Farrington to the Office of Management and Budget and named Willis acting director.
At a closed-door meeting the following day with the governor, Willis and other Finance Committee members, Berry gave Willis a substantial list of questions about IRB operations to answer in writing by July 14. Willis did so. However, saying she still wasn't satisfied with the answers, Berry rescheduled the July 6 hearing. Also invited to attend Thursday's session were OMB director Ira Mills and Roy McFarlane, the governor's special assistant for information technology. Mills advised Berry he was unable to attend.
Finance Committee members grilled Willis on all aspects of IRB operations. He began with a chart outlining tax collecting functions and came up with some figures that appeared to shock his listeners, supporting Berry's fears about disarray within the agency. He criticized the federally mandated earned-income tax credit program, which gives larger refunds to low-income taxpayers, as a big loser for the government. "It's embarrassing," he said as he pointed out $9.3 million paid in interest on the refunds sent out late for the years 1992-1998.
However, the former chief of collections pointed with pride to the gross receipts tax collections from 1989 through 1999, collections which averaged 97 percent.
At the same time, Willis accepted the blame for the bureau's problems himself, refusing to point a finger at previous directors. Sen. Adelbert Bryan on several occasions stated that Farrington and her predecessor, Edward Thomas, now CEO of the West Indian Co. Ltd., should be at the hearing. Berry wondered aloud why the governor had dismissed Farrington at the 11th hour. She declared more than once during the meeting that the committee would "get to the bottom of" questions concerning the agency's lack of management and productivity.
Berry chided the IRB staff members, noting that "there are people out there marching every day." She said, "You are the ones that generate the income to pay people – why can't it be done?"
McFarlane, in a prepared statement, said the IRB began in 1999 to install a computer application system used throughout the territories. He said it was an ongoing process which involved a large degree of training and restructuring. Rosalino Scipio, processing and accounts chief, testified that employees were doing tasks manually because of not having the expertise to use the new system.
The bureau is chronically understaffed, Willis said, noting that his revenue agents typically handle 250 to 300 cases each, compared to the caseload of about 75 for mainland Internal Revenue Service agents.
In response to Willis's repeated mention of being short staffed, Berry reminded him that IRB's fiscal year 2000 appropriation was $6 million, exactly what the administration had requested. She said the bureau was the only agency to get its full requested appropriation, and that the funding included staffing for vacant positions. She expressed concern that those positions have yet to be filled. And since last year, 21 staff members have left the agency.
Willis produced a letter excusing from Thursday's meeting two of his employees who had traveled to Guam and Saipan for a tax conference. The government travel orders attached to the letter showed $175 per day per diem and a total travel cost of $15,297. Questioned by senators about the travel cost, Willis said the "federal government picks up the total bill." It is part of ongoing training, he said, and when employees travel for training or tax conferences, they share the expertise they bring back.
Asked by Sen. Roosevelt David what three things were most important to the IRB's functioning, Willis replied without missing a beat, "Training, morale and a fully staffed bureau." He added, "I spread morale." David commented that "people on the street don't feel you're the right man for the job, but you came prepared, with documentation. You seem to have competent people around you."
Sen. Violet Anne Golden said the governor's Five-Year Operating and Strategic Financial Plan for economic recovery states that the IRB doesn't know with any certainty where its accounts stand. Willis replied he hadn't read the plan. Golden replied, "Read it." Neither she nor Berry appeared to share Willis's optimism about his ability to get the job done.
At one point in the lengthy hearing, Sen. Donald "Ducks" Cole asked all of his staff members who believed Willis could do the job to stand up, and all 10 in the Senate chambers did so. Earlier the question was apparently misunderstood, when only two stood. Willis, who is well known as "Lolo" Willis, co-host with Buddy Kennings of the "One on One" nightly sports program on WVWI radio, described himself throughout the hearing as a "team player."
Willis said the government currently is owed nearly $31.4 million in back taxes, and part of the reorganization plan is to step up and fully staff the collections department.
Adjourning the meeting at about 8 p.m., Berry cautioned Willis, "I hear my colleagues saying you're doing a good job. This isn't a confirmation hearing; maybe later."
She said she sees IRB's overall problem as one not so much of funding but of "personalities, management styles and lack of communication." She added, "We want to work with you. If you will show us where your weaknesses are, we will help you. You can't cover them up."
The hearing was to resume at 10 a.m. Friday in St. Thomas, instead of on St. Croix, where it had previously been scheduled. Senators present Thursday were Berry, Bryan, Cole, David, Golden, David Jones and Almando "Rocky" Liburd.

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