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FEDERAL OK SOUGHT FOR CFO, FINANCIAL SYSTEM

Nov. 21, 2003 – Delegate Donna M. Christensen introduced legislation in Congress on Friday both to create a position of chief financial officer for the Virgin Islands and to institute an integrated financial management system to keep track of the territory's fiscal affairs.
According to a release from the delegate, the CFO "would assume the functions of the Office of Management and Budget for a term of five years that was not concurrent with the term of the governor, and would oversee and approve all spending of the government and be authorized by law to disapprove items of spending which would send the government's financing into deficit."
The measure calls for the CFO to be appointed by the governor subject to confirmation by the Legislature. A search committee comprising representatives of the public and private sectors, including the courts and labor, would submit three candidates to the governor, each of whom would have to be a certified public accountant. "The Secretary of Interior would serve as the head of the commission, and is empowered to make a selection if the commission fails to act," the release stated. And the CFO "could only be removed for cause."
"This is an attempt to move us from crisis management to a sound financial standing for the long term. This is not an attack on the Turnbull administration or the 25th Legislature," Christensen said.
"Current conditions are the result of a pattern of unfortunate decisions that have been made over several administrations and Legislatures with regard to the territory's finances and are now threatening to undermine the economic stability of the territory," she said.
"Very little proposed so far by the local government is aimed at identifying the causes of the recurring crises and finding a comprehensive approach to providing more permanent solutions," she said. "I understand the pressure faced by the governor and Legislature as they try to address fiscal issues, but we must find a way to solve this problem before we find ourselves in the position where we can no longer borrow to address our deficits."
An idea whose time was quite a while coming
Half a year ago, when the talk of the territory was the government's fiscal crisis, two prominent public officials advanced ideas for intervention that found little favor with the We Can Solve Our Problems Ourselves school of political posturing.
Sen. Lorraine Berry called for the creation of a financial control board that would be local in its makeup but have federal backing, and she requested the drafting of legislation to set up such a board. In June, she wrote to U.S. Interior Department authorities asking for technical and monetary assistance in setting up a board in the territory modeled on the federal one that temporarily took over management of the Washington, D.C., local government in 1995.
Christensen, meanwhile, advocated establishing a comprehensive financial and accounting system and hiring an independent chief financial officer for the territory. Back in January, two months before Gov. Charles W. Turnbull publicly acknowledged there was a fiscal crisis, she wrote to him asking for his support in "calling upon the federal government to pay for the implementation of a comprehensive financial and accounting system."
She said he wrote back in March saying that her suggestion had been "well received" and asking her to assist in setting up a meeting with David Cohen, Interior Department deputy assistant secretary for insular affairs.
In August, Christensen hosted a half-hour program on WTJX-TV with D.C. Congresswoman Eleanor Holmes Norton and Washington accounting executive Larry Wilson as her guests. Norton and Wilson described an integrated financial management system as essential to solving the territory's financial woes. (See "CFO, management system seen as key to recovery"."
Christensen told the Source on Aug. 19 that she had secured the governor's approval for such a system and that she was taking action to get legislation in place to create the position of chief financial officer for the territory. The CFO would be appointed by the governor but not tied to the chief executive's term of office, similar to the V.I. Inspector General, she said at that time.
Control board still in the idea stage
Since then, with escalating amounts of political energy devoted to birthing the fiscal year 2004 budget, nary a word has been heard about either idea. Until this week.
At Tuesday's Rules Committee meeting on the budget, Berry didn't bring up the control board, but Sen. Celestino A. White Sr. did. He warned colleagues that their revenue-generating and cost-cutting proposals are up to "someone else to administer" — the executive branch. "That's why a mechanism should be in place to control it," he said. "That's why the senior senator Berry and I continue to talk about a control board."
Berry, who has yet to introduce the legislation she had drafted earlier in the year, said on Tuesday that a financial control board is "still an option, but I have no support in my group." Her reference apparently was to the majority bloc.
Senate President David Jones made clear on Tuesday that he doesn't like the idea, saying that "we need to re-look the manner in which we exercise our oversight before we consider a control board." However, White and his minority colleague Sen. Carlton Dowe assured Berry of their support.
Territory's troubles well known in Washington
Christensen's release said she reached the decision over time that the congressional office should "step in to begin the process of permanently solving the territory's recurring fiscal problems." The current fiscal crisis is the third since she was elected delegate in 1997, she said.
The first was in the Schneider administration, when she was asked to move legislation enabling the territory to issue "parity bonds," instead of "priority bonds." This, she said, allowed that administration to dodge the bullet and refinance the "rum fund" bonds in order to balance the budget.
The second came at the start of the Turnbull administration, when she was asked to move legislation to allow the territory to issue "short-term notes" to balance the budget once again, as well as to finance overdue tax refunds and vendor payments.
Federal authorities are attuned to "the pattern of Virgin Islands spending problems," Christensen's release said. She cited the Department of Housing and Urban Development takeover of the V.I. Housing Authority and sanctions imposed by the federal Department of Education on the V.I. department. Recently, she said, a member of Congress "took to the House floor and used the mismanagement of a Virgin Islands health grant as an example of government waste."
The inescapable fact is, she said, that "we live in the information age, where even the activities of small jurisdictions such as the Virgin Islands can and will come under greater public scrutiny."
Noting that the U.S. government, facing its own financial problems, is looking for areas in which to reduce spending, Christensen added: "This is not the time to stick out as a jurisdiction that has not exercised good stewardship of its federal funding."
She said she plans to hold public meetings on the bill in the territory.

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