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Charlotte Amalie
Friday, August 19, 2022
HomeNewsArchivesVIPA Legal Counsel Defends Board's Procurement Process

VIPA Legal Counsel Defends Board's Procurement Process

With a short discussion acknowledging a federal audit report faulting the V.I. Port Authority’s procurement process, the authority’s board Wednesday approved its budget for the fiscal year beginning Oct. 1.
The audit, performed by the U.S. Interior Department’s office of the Inspector General, found "circumvention" or inadequate documentation of the procurement processes. It also found pervasive disorganization and incomplete files in the Authority’s procurement record-keeping system, noting “some projects were initiated and completed without contracts in place to protect the Authority’s best interest."
At Wednesday’s board meeting, held at the Henry E. Rohlsen Airport’s conference room, legal counsel Don C. Mills emphasized that the audit did not suggest that any fraud had taken place, only that the files were not complete, making it difficult to determine from the paper trail exactly what did happen.
"I want to say unequivocally that the terms of the Inspector General’s report left a lot to the imagination of people and almost induces people to believe that the lack of documentation shows that something happened," Mills said. "From personal experience I can say this board vetted every one of these contracts."
Mills said he had offered to help the auditors find copies of the documents they need because all the contracts, at one point or another went through his office, and he would have copies of most of the documents. But the auditors were looking for the originals of these documents, which should have been filed but weren’t.
Board member Vincent Frazer, who is also V.I. attorney general, said he was concerned about the audit’s findings.
"I think it’s a bad business practice for us not to be able to maintain our own records," he said.
The audit also criticized VIPA for not issuing 1099 forms to all people it paid, but Judith James, the authority’s director of administration and finance, said that many of the vendors and payees were specifically exempted from needing the form.
In fact, she said, in response to the audit, her office has been contacting vendors about supplying them with the documents, and several have replied with surprise that they don’t need one, because they are in an exempt category.
The board asked VIPA Executive Director Kenn Hobson to present an action plan at its October meeting with how they will respond to all the points the audit raised.
With no discussion, the board approved its budget for the 2011 fiscal year, which begins Oct. 1.
The budget calls for total operating expenses of $36.9 million, $18.2 million of which is salaries, wages and payroll expenses.
The budget also includes capital projects totaling $35.5 million and debt service of $3.3 million. The annual budget totals $75.9 million.
The budgeted capital projects included one late entry. During the meeting the board learned of $1 million contained in a bill that had been vetoed by Gov. John deJongh Jr. but which was overridden by the Senate. That money is designated for a new customs house on St. Thomas.
The board voted to grant a $5.88 million contract to Virgin Islands Paving for rebuilding the runway at Rohlsen.
The board also learned that passenger numbers at the territory’s two airports were up significantly over the national average.
Robert C. Arthur, VIPA’s airport rate consultant, told the board that total passengers through Rohlsen and the Cyril E. King Airport had grown from 805,000 in fiscal 2009 to an estimated 865,000 for fiscal 2010, which will end Sept. 30. That 7.4-percent increase compares favorably to the national average of 1.2 percent, he said.
The payoff for VIPA is that airlines and vendors pay a variety of fees that support the airport, which comes to about $22 per passenger, although Arthur quickly noted that it is not a strict per person fee. It’s a way of expressing the value to the authority of each passenger through the airport.

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With a short discussion acknowledging a federal audit report faulting the V.I. Port Authority's procurement process, the authority's board Wednesday approved its budget for the fiscal year beginning Oct. 1.
The audit, performed by the U.S. Interior Department's office of the Inspector General, found "circumvention" or inadequate documentation of the procurement processes. It also found pervasive disorganization and incomplete files in the Authority’s procurement record-keeping system, noting “some projects were initiated and completed without contracts in place to protect the Authority’s best interest."
At Wednesday's board meeting, held at the Henry E. Rohlsen Airport's conference room, legal counsel Don C. Mills emphasized that the audit did not suggest that any fraud had taken place, only that the files were not complete, making it difficult to determine from the paper trail exactly what did happen.
"I want to say unequivocally that the terms of the Inspector General's report left a lot to the imagination of people and almost induces people to believe that the lack of documentation shows that something happened," Mills said. "From personal experience I can say this board vetted every one of these contracts."
Mills said he had offered to help the auditors find copies of the documents they need because all the contracts, at one point or another went through his office, and he would have copies of most of the documents. But the auditors were looking for the originals of these documents, which should have been filed but weren't.
Board member Vincent Frazer, who is also V.I. attorney general, said he was concerned about the audit's findings.
"I think it's a bad business practice for us not to be able to maintain our own records," he said.
The audit also criticized VIPA for not issuing 1099 forms to all people it paid, but Judith James, the authority's director of administration and finance, said that many of the vendors and payees were specifically exempted from needing the form.
In fact, she said, in response to the audit, her office has been contacting vendors about supplying them with the documents, and several have replied with surprise that they don't need one, because they are in an exempt category.
The board asked VIPA Executive Director Kenn Hobson to present an action plan at its October meeting with how they will respond to all the points the audit raised.
With no discussion, the board approved its budget for the 2011 fiscal year, which begins Oct. 1.
The budget calls for total operating expenses of $36.9 million, $18.2 million of which is salaries, wages and payroll expenses.
The budget also includes capital projects totaling $35.5 million and debt service of $3.3 million. The annual budget totals $75.9 million.
The budgeted capital projects included one late entry. During the meeting the board learned of $1 million contained in a bill that had been vetoed by Gov. John deJongh Jr. but which was overridden by the Senate. That money is designated for a new customs house on St. Thomas.
The board voted to grant a $5.88 million contract to Virgin Islands Paving for rebuilding the runway at Rohlsen.
The board also learned that passenger numbers at the territory's two airports were up significantly over the national average.
Robert C. Arthur, VIPA's airport rate consultant, told the board that total passengers through Rohlsen and the Cyril E. King Airport had grown from 805,000 in fiscal 2009 to an estimated 865,000 for fiscal 2010, which will end Sept. 30. That 7.4-percent increase compares favorably to the national average of 1.2 percent, he said.
The payoff for VIPA is that airlines and vendors pay a variety of fees that support the airport, which comes to about $22 per passenger, although Arthur quickly noted that it is not a strict per person fee. It's a way of expressing the value to the authority of each passenger through the airport.