The V.I. Agriculture Department on St. Croix has been slow and disorderly about recording fee collections electronically, issuing receipts and depositing funds, and needs better procedures; but the department is moving in the right direction, according to a V.I. Inspector General report released this week.
V.I. Inspector General Steven Van Beverhoudt reported his office found that in 2009 and 2010, the department’s collectors did not always issue receipts, and when they did, failed to use Finance Department-issued manual receipts.
"Our review of provided documents for March 2010 collections showed that neither electronic nor manual
receipts were issued for 154 payment transactions for services originating at the Horticulture Division," Beverhoudt said in the report. "Instead of issuing receipts, the collector simply stamped "paid" on sales or job order forms that were issued to customers from division personnel."
Ideally, customers should have been issued ERP electronically generated receipts upon their submission of the sales or job order forms to the collector, according to Beverhoudt. "If electronic receipts could not be generated, at a minimum, Finance-approved manual receipts should have been given to customers," he said in the report.
Also, monies collected were not deposited quickly. The problem of long lags between collecting money and depositing it was raised during the last Inspector General report on Agriculture, in 1998, according to the report. The 1998 audit was done as a result of a suspected burglary. The Inspector General found the office had been burglarized and $3,567 stolen but concluded the loss could have been avoided if funds had been regularly deposited at the bank the same day they were collected.
While the government has a fairly new, expensive computerized Enterprise Resource Planning System to digitally track nearly all government finances, Agriculture did not post transactions to it consistently or quickly.
"Our audit results showed that of the 295 collection batches reviewed, 140 or 47.5 percent were posted to the ERP System on the same day of or one day after the date of collection. However, the remaining 155 or 52.5 percent were posted to the ERP System from two to 26 days after the collection date, to not at all," the report says.
Collections staff also "performed critical activities without management review, verification and approval," according to the report.
"We attribute these conditions to ineffective monitoring of the revenue collection process by Finance and management at Agriculture, to include their failure to effectively communicate, implement, and update collection policies and procedures," Beverhoudt wrote in the report.
While the report makes no suggestion that anything untoward actually occurred, it raised the concern "there was no assurance that revenue collections were properly safeguarded and accounted for," and pointed out that slow depositing of collections meant the money was not available for the government to spend. Over 2009 and 2010, Agriculture’s St. Croix offices collected about $371,000 in fees, according to the report.
The report recommends the Finance Department monitor the collection process regularly to ensure collections are properly documented and deposited. Finance should also establish new written policies for collections with the ERP system, and segregate duties and program the system so collectors need supervisory approval before adjusting collection transactions in the ERP system, according to the report.
It also recommends the Commissioner of Agriculture require collectors only use Finance-approved manual receipt books, designate a senior staff member to ensure that collections and deposits are made, recorded in the ERP system and reconciled in a timely manner, and segregate duties so collectors need supervisory approval to alter transactions.
Both Finance and Agriculture are in agreement with these conclusions and have given detailed responses outlining plans to address the shortfalls, according to the report. In a letter, Finance Commissioner Angel Dawson listed 19 separate policy and procedure guidelines Finance has put together, seeming to cover all aspects of government collections, accounting and money handling.
Agriculture Commissioner Louis Petersen Jr. also responded point by point, outlining the department’s actions. The department will request a second cashier receipt machine to make sure manual receipts are only used in the event of a long power-failure or network outage, and then only with supervisory approval, Petersen wrote.
Overall, the report finds Agriculture and Finance were very responsive to the report’s critique. At the same time, it was mildly critical of some of the responses from Agriculture, particularly when it came to dividing up duties and control. While Petersen proposed having the assistant collector control the receipt book, "our position is that the manual receipt books should be controlled by an employee other than a collector, preferably someone who functions in a supervisory or management capacity," Beverhoudt said in the report. It is also very important to only use Finance-approved manual receipts, saying unapproved receipts weakens control and oversight of government funds because the records are not standardized and so difficult to track systematically.
With those caveats and suggestions, both Finance and Agriculture were given the stamp of approval. "We consider all of the recommendations resolved," Beverhoudt wrote.