A surprise audit of the Eldra Schulterbrandt Residential Facility has uncovered significant failures in the way the Virgin Islands Health Department managed residents’ money, including more than $17,000 in questionable bank withdrawals, inadequate documentation for residents’ cash, and funds that remained undistributed after residents died or left the facility, auditors said.
But the report also concludes that the Health Department has already addressed most of the problems identified, implementing new financial controls and policies after the audit was conducted. Of eight recommendations made by the Office of the Virgin Islands Inspector General, six have already been resolved and implemented, while two remain in progress.
The audit, released Monday by Inspector General Delia M. Thomas, stems from a surprise cash count conducted on July 28, 2025, at the St. Thomas residential mental health facility, which provides long-term and transitional care for adults with serious mental illness. Investigators examined how resident funds were handled between 2022 and 2025, focusing both on cash maintained at the facility and bank accounts managed by the Department of Health on behalf of residents unable to manage their own finances.
The findings paint a picture of weak oversight and poor record-keeping.
Inspectors found that the facility failed to properly account for $2,652 in residents’ cash and cash equivalents, including $767 that belonged to former residents, while also identifying at least $17,005 in unexplained withdrawals from two residents’ bank accounts for which there was no documented justification or evidence of reimbursement. Thomas said those findings raised concerns about possible misuse or fraudulent activity.
The report stops short of concluding that fraud occurred. Instead, it repeatedly cites inadequate documentation, missing records, and insufficient oversight that made it impossible to verify whether funds had been handled appropriately.
During the surprise cash count, investigators found residents’ money stored in 29 envelopes labeled with residents’ names. While most of the cash was secured, nearly $500 was kept in a drawer accessible to multiple employees who were not responsible for managing resident funds. More significantly, investigators found almost no reliable accounting records showing where the money came from, how it had been spent, or whether balances were accurate. Only nine of the 29 envelopes contained receipts, and those often failed to match the cash inside.
In one example cited in the report, an envelope indicated a resident should have had $168, but auditors counted $174. Elsewhere, there was no documentation showing when money had been received or spent, making reconciliation impossible. Health officials told auditors the funds may have come from family members, Social Security benefits, or federal COVID-19 stimulus payments but could not verify the source.
The audit also found $767 belonging to five former residents remained in the facility’s possession — including $759 owed to the estates of four residents who had died and $8 owed to a discharged resident. At the time of the audit, the department had no policy governing how those funds should be handled after a resident’s death or discharge. Although new procedures have since been adopted, auditors noted that, as of February 2026, those funds had still not been distributed.
Perhaps the most serious finding involved residents’ bank accounts.
Investigators reviewed three accounts managed solely by the Department of Health and identified $17,005 in questionable withdrawals from two of them. One resident’s account showed five withdrawals totaling $15,433, including a single $6,000 withdrawal. Auditors began examining the accounts after learning allegations that one resident’s funds had been used to pay for another resident’s medical procedure.
According to the report, an internal Health incident report indicated the former assistant director claimed department leadership had approved the transaction. However, investigators found no documentation supporting that approval. Although officials also said the Finance Department had reimbursed the resident, auditors found no evidence that reimbursement had actually occurred. A second resident’s account reflected another undocumented withdrawal of $1,572, according to the report.
The audit concluded those transactions raise concerns about Health’s fiduciary responsibilities, unauthorized use of resident funds, and the potential financial exploitation of an elderly resident. The report states the transactions will be referred to the Virgin Islands Justice Department for further investigation into their legality.
The audit also highlighted broader management failures.
Upper-level management did not require regular financial reports documenting residents’ cash, bank reconciliations, or expenditures, according to investigators. Two senior department officials told auditors they never received financial reports from the facility’s former assistant director and were unsure whether such reports were even required. Because only court-ordered residents’ financial records were routinely reviewed, auditors concluded residents whose accounts were managed solely by Health faced a greater risk of financial abuse.
Another consequence of the breakdown occurred after the former assistant director retired in 2024.
The audit found Health failed to transfer signatory authority over residents’ bank accounts before that employee left. As a result, the department lacked access to residents’ accounts for roughly a year. During that period, residents were unable to use their own money for personal purchases, while employees sometimes paid for snacks and other necessities out of their own pockets, with some choosing not to seek reimbursement.
Despite those findings, the report also credits the Health Department with making substantial changes after the audit.
Following the July 2025 surprise cash count, Health adopted new policies governing representative payee responsibilities, monthly reconciliation of resident funds, financial reporting, cash security, and the handling of funds after a resident’s death or discharge. The Inspector General determined those actions satisfactorily addressed six of the eight recommendations made in the report.
In its written response, included as an appendix to the report, the Health Department acknowledged the findings and said it initiated a comprehensive corrective action process immediately after receiving them.
The department said it implemented new financial management procedures, monthly reconciliations, stronger supervisory oversight, enhanced documentation requirements, and regular reporting to leadership. Health also said it established new procedures governing signatory authority transitions to prevent future disruptions in residents’ access to their money.
Two recommendations remain open. Health is still developing a process for distributing funds belonging to deceased former residents and is coordinating with the Finance Department and the Office of Management and Budget to determine whether reimbursement is warranted for any unauthorized withdrawals identified during the audit. The department has projected completion of both actions by July 24.
