An audit of the V.I. Legislature has found that it violated the V.I. Code by spending $1.16 million more than was allotted in Fiscal Year 1999, thus contributing to the government's operating deficit, and circumvented Finance Department rules by using its imprest fund "as a revolving expense account" to pay hundreds of thousands for salary advances, travel items and other services.
Conducted by the U.S. Interior Department's Office of Inspector General, the audit covered the fiscal years 1997-99. It found that in 1999, the Legislature underspent its appropriation by $373,602 but overspent how much was actually allotted to it by the V.I. Office of Management and Budget by $1,158,541.
"The Legislature's director of Business and Financial Management told us that the Legislature adopted the position that it was entitled to its full appropriation," the audit states, "because the Legislature believed the government's executive branch did not have the authority to reduce its appropriation."
But the audit goes on to cite the V.I. Code, which explicitly states that no government officer or employee can spend more than is apportioned. And the Legislature's business director informed then-Senate President Vargrave Richards at least twice of impending overspending, according to the audit, imploring him to institute cost-cutting measures.
"The realities are that the Legislature cannot continue to spend without regard to the financial woes that the government is experiencing at this time," the audit quotes the letter as saying. In addition, at least three memos outlining cost-cutting measures for the Senate were drafted by the business director but never signed or issued by Richards.
The Legislature dipped into the General Fund when its allotment ran out, the audit said, contributing to the government's operating deficit for 1999.
In his response to the audit, Richards did not concur with its findings and again insisted that the Legislature can spend as much as it appropriates for itself, regardless of whether the Management and Budget Office actually gives it the money. He cited in support a section of the V.I. Code that he said prohibits the OMB director from unilaterally reducing how much is allotted to the Legislature.
Regarding the imprest fund, which works like petty cash, the audit found it was used to pay for senators' expenses and legislative operations "regardless of dollar amount or purpose," in transactions totaling more than $1.2 million from 1997 to 1999.
"The director of Business and Financial Management told us that the Legislature adopted the practice of paying for day-to-day Legislature operations from the imprest fund because local vendors did not always accept government purchase requisitions and because the Department of Finance did not always process payment requests in a timely manner," the audit said.
It found four instances in which advance payments to various contractors, which were to be repaid to the imprest fund once payment was received from Finance, were never repaid, for a total of $23,000. In his response, Richards detailed how all but one of the payments (for $5,000) had been researched and repaid.
In all, the Legislature concurred with eight of the audit's 12 recommendations; the Inspector General's office has asked that the Legislature reconsider its position on the four others.

Senate Finance Committee Chairwoman Alicia "Chucky" Hansen vowed Tuesday to undo Gov. Charles Turnbull’s veto of a tourism authority proposal and his increase in the hotel occupancy tax.
Tuesday's committee’s hearing on the state of the V.I. tourism industry had been scheduled for weeks but Turnbull’s veto of a public-private tourism authority and his decision to increase the hotel room tax from 8 percent to 10 percent made the six-hour plus session even more timely.
The tourism industry's distress over the governor’s decisions has not been lost on Hansen, who has vowed "radical" changes to knock the industry out of a decade-long malaise.
And even though Hansen, a member of the Senate’s eight-member majority bloc, is two votes shy of the 10 needed to override Turnbull’s veto, she remained steadfast.
"Win, lose or draw, I’m moving it," she said. "We should not look at it as a dead issue."
Despite the political rancor between the majority bloc and the remaining seven – mostly Democrat – senators, Hansen may have a shot at an override. While Sen. Emmett Hansen II, a Democrat and not a Finance Committee member, didn’t say outright that he would support an override attempt, he did sit in on the hearing and commiserated with the hoteliers and tourism-dependent business owners outraged by the governor’s actions.
It is unclear whether Sen. Adlah "Foncie" Donastorg, a committee member and non-aligned senator, would support an override.
Chucky Hansen, who repeated her intent to shake up the government’s approach to tourism, said she would also move to repeal the 2 percent increase of the room tax.
"It seems like everyone is singing the same songs relating to what happened in the past," she said. "This is a new direction and new leadership from this Legislature’s majority."
Such statements were well-received by individuals in the tourism industry who lamented the Tourism Department’s lack of a long-term plan to promote the territory. Wendell Snider, president of the St. Croix Hotel and Tourism Association, quoted Bureau of Economic Research statistics that for every dollar spent on advertising the territory, the government receives $15 in return.
"There has to be a five-year marketing plan," Snider said. "There is none. When there has not been a (Tourism commissioner) in 36 months, how can there be any?"
Chucky Hansen said the $11 million collected annually in hotel occupancy taxes, which by law is supposed to be used only for marketing the territory, should be increased to $14 million, although she didn’t say where the additional funds would come from.
The $11 million, Hansen said, "is simply not competitive with what other jurisdictions are spending."
"If we do not increase the money, we will not have any more business," Hansen said.
Of the $14 million, she said, $2 million should go to advertise St. Croix exclusively and $2 million to promote the territory’s marine industry.
Richard Doumeng, president of the St. Thomas-St. John Hotel and Tourism Association, said that other than covering the expenses incurred by the Tourism Department with General Fund monies, the V.I. government relies entirely on hotel occupancy taxes to promote the Virgin Islands as a tourist destination. In turn, he said the government's lack of a larger investment to attract visitors is keeping the amount collected from hotel room taxes low.
"We as a people don’t spend one red cent promoting the territory," he said. "It’s not that 8 percent is too low. There aren’t enough people coming here to pay it."
Doumeng also agreed with Hansen that St. Croix needed extra help.
"I think St. Croix deserves a special fund to get on the map," he said.

Senate Finance Committee Chairwoman Alicia "Chucky" Hansen vowed Tuesday to undo Gov. Charles Turnbull’s veto of a tourism authority proposal and his increase in the hotel occupancy tax.
Tuesday's committee’s hearing on the state of the V.I. tourism industry had been scheduled for weeks but Turnbull’s veto of a public-private tourism authority and his decision to increase the hotel room tax from 8 percent to 10 percent made the six-hour plus session even more timely.
The tourism industry's distress over the governor’s decisions has not been lost on Hansen, who has vowed "radical" changes to knock the industry out of a decade-long malaise.
And even though Hansen, a member of the Senate’s eight-member majority bloc, is two votes shy of the 10 needed to override Turnbull’s veto, she remained steadfast.
"Win, lose or draw, I’m moving it," she said. "We should not look at it as a dead issue."
Despite the political rancor between the majority bloc and the remaining seven – mostly Democrat – senators, Hansen may have a shot at an override. While Sen. Emmett Hansen II, a Democrat and not a Finance Committee member, didn’t say outright that he would support an override attempt, he did sit in on the hearing and commiserated with the hoteliers and tourism-dependent business owners outraged by the governor’s actions.
It is unclear whether Sen. Adlah "Foncie" Donastorg, a committee member and non-aligned senator, would support an override.
Chucky Hansen, who repeated her intent to shake up the government’s approach to tourism, said she would also move to repeal the 2 percent increase of the room tax.
"It seems like everyone is singing the same songs relating to what happened in the past," she said. "This is a new direction and new leadership from this Legislature’s majority."
Such statements were well-received by individuals in the tourism industry who lamented the Tourism Department’s lack of a long-term plan to promote the territory. Wendell Snider, president of the St. Croix Hotel and Tourism Association, quoted Bureau of Economic Research statistics that for every dollar spent on advertising the territory, the government receives $15 in return.
"There has to be a five-year marketing plan," Snider said. "There is none. When there has not been a (Tourism commissioner) in 36 months, how can there be any?"
Chucky Hansen said the $11 million collected annually in hotel occupancy taxes, which by law is supposed to be used only for marketing the territory, should be increased to $14 million, although she didn’t say where the additional funds would come from.
The $11 million, Hansen said, "is simply not competitive with what other jurisdictions are spending."
"If we do not increase the money, we will not have any more business," Hansen said.
Of the $14 million, she said, $2 million should go to advertise St. Croix exclusively and $2 million to promote the territory’s marine industry.
Richard Doumeng, president of the St. Thomas-St. John Hotel and Tourism Association, said that other than covering the expenses incurred by the Tourism Department with General Fund monies, the V.I. government relies entirely on hotel occupancy taxes to promote the Virgin Islands as a tourist destination. In turn, he said the government's lack of a larger investment to attract visitors is keeping the amount collected from hotel room taxes low.
"We as a people don’t spend one red cent promoting the territory," he said. "It’s not that 8 percent is too low. There aren’t enough people coming here to pay it."
Doumeng also agreed with Hansen that St. Croix needed extra help.
"I think St. Croix deserves a special fund to get on the map," he said.

Senate Finance Committee Chairwoman Alicia "Chucky" Hansen vowed Tuesday to undo Gov. Charles Turnbull’s veto of a tourism authority proposal and his increase in the hotel occupancy tax.
Tuesday's committee’s hearing on the state of the V.I. tourism industry had been scheduled for weeks but Turnbull’s veto of a public-private tourism authority and his decision to increase the hotel room tax from 8 percent to 10 percent made the six-hour plus session even more timely.
The tourism industry's distress over the governor’s decisions has not been lost on Hansen, who has vowed "radical" changes to knock the industry out of a decade-long malaise.
And even though Hansen, a member of the Senate’s eight-member majority bloc, is two votes shy of the 10 needed to override Turnbull’s veto, she remained steadfast.
"Win, lose or draw, I’m moving it," she said. "We should not look at it as a dead issue."
Despite the political rancor between the majority bloc and the remaining seven – mostly Democrat – senators, Hansen may have a shot at an override. While Sen. Emmett Hansen II, a Democrat and not a Finance Committee member, didn’t say outright that he would support an override attempt, he did sit in on the hearing and commiserated with the hoteliers and tourism-dependent business owners outraged by the governor’s actions.
It is unclear whether Sen. Adlah "Foncie" Donastorg, a committee member and non-aligned senator, would support an override.
Chucky Hansen, who repeated her intent to shake up the government’s approach to tourism, said she would also move to repeal the 2 percent increase of the room tax.
"It seems like everyone is singing the same songs relating to what happened in the past," she said. "This is a new direction and new leadership from this Legislature’s majority."
Such statements were well-received by individuals in the tourism industry who lamented the Tourism Department’s lack of a long-term plan to promote the territory. Wendell Snider, president of the St. Croix Hotel and Tourism Association, quoted Bureau of Economic Research statistics that for every dollar spent on advertising the territory, the government receives $15 in return.
"There has to be a five-year marketing plan," Snider said. "There is none. When there has not been a (Tourism commissioner) in 36 months, how can there be any?"
Chucky Hansen said the $11 million collected annually in hotel occupancy taxes, which by law is supposed to be used only for marketing the territory, should be increased to $14 million, although she didn’t say where the additional funds would come from.
The $11 million, Hansen said, "is simply not competitive with what other jurisdictions are spending."
"If we do not increase the money, we will not have any more business," Hansen said.
Of the $14 million, she said, $2 million should go to advertise St. Croix exclusively and $2 million to promote the territory’s marine industry.
Richard Doumeng, president of the St. Thomas-St. John Hotel and Tourism Association, said that other than covering the expenses incurred by the Tourism Department with General Fund monies, the V.I. government relies entirely on hotel occupancy taxes to promote the Virgin Islands as a tourist destination. In turn, he said the government's lack of a larger investment to attract visitors is keeping the amount collected from hotel room taxes low.
"We as a people don’t spend one red cent promoting the territory," he said. "It’s not that 8 percent is too low. There aren’t enough people coming here to pay it."
Doumeng also agreed with Hansen that St. Croix needed extra help.
"I think St. Croix deserves a special fund to get on the map," he said.

A high-ranking official in the administration of Gov. Charles W. Turnbull has tentatively indicated the V.I. government has gone from budget deficit to budget surplus.
Special Assistant to the Governor for Policy Initiatives James O'Bryan Jr. was asked on Tuesday about reports that directives had been issued by fiscal officers of the administration that the surplus revelation be kept secret.
"I can confirm that at the last cabinet meeting on St. John, Finance Commissioner Bernice Turnbull indicated that based on a preliminary review of the government's books, we ended with a $20 million surplus," he said. O'Bryan said that despite the surplus, accounts must still be reconciled and there are still outstanding bills to be paid.
When asked why the information was not to be divulged publicly, O'Bryan said the administration did not want to mislead the public about the true financial situation of the government. Still, he said, "there is no question that the government finished the Fiscal Year 2001 in very good shape."
If indeed there is a budget surplus, it would mean that deficit spending has been reversed for the first time in many years.

Sunday's 19th Annual Ultrasprint will commemorate Black History Month for the benefit of the Special Olympics. Conducted by the St. Thomas Association of Roadrunners (STAR), it will take place at a different time and in a different place from Ultrasprint in recent years. To accommodate the larger field expected, Ultrasprint will start on Veterans' Drive, loop through Frenchtown and finish where it started. The distance will be 1 mile and the race starts promptly at 4:30 p.m. There will also be a ½-mile run for children.
Special Olympics T-shirts will be given to all finishers. Registration will take place starting at 3:00 p.m. on the Waterfront apron across from the Windward Passage Hotel. The fee is $8 with all proceeds going to the Special Olympics.
For additional information, call 777-8183.

James Schleifer, director of marketing for Absolut vodka, will address the Ad Club of the Virgin Islands at its February speakers meetings at noon on Feb. 13 at Chickie's Place in Frenchtown on St. Thomas, and at 6:30 p.m. the following day at the Divi Carina Bay Resort and Casino on St. Croix.
Schleifer has been director of marketing for Absolut vodka at Seagram Americas since 1998. He oversees all national and regional marketing initiatives for Absolut, today the number one imported vodka in the USA with sales of more than 4 million cases annually. In 1999-2000, Mr. Schleifer led the introduction and national rollout of Absolut Mandarin, the most successful spirits launch in Seagram's history. In 2000, he also oversaw the brand's 20th Anniversary advertising and marketing campaign, which celebrated the brand and its milestones since the launch of Absolut in the USA in 1980.

The Green House, Hard Rock Cafe and The Happy Buzzard (formerly Fat Tuesday's) are joining forces to present music by four bands at various times and for various musical tastes Thursday, Feb. 8.
From 6 to 8 p.m. the Sax Cymbals play in the Green House parking lot. From 8 to 10 p.m., the Stevie Legend Band takes over in the same spot. From 9 p.m. "until," Lefty Lucy will play in the Green House and Public Nuisance will do the same in the Hard Rock Cafe. There's no cover; you can buy a $5 wristband that entitles you to a free cocktail and other drink specials at each venue.

James Schleifer, director of marketing for Absolut vodka, will address the Ad Club of the Virgin Islands at its February speakers meetings at noon on Feb. 13 at Chickie's Place in Frenchtown on St. Thomas, and at 6:30 p.m. the following day at the Divi Carina Bay Resort and Casino on St. Croix.
Schleifer has been director of marketing for Absolut vodka at Seagram Americas since 1998. He oversees all national and regional marketing initiatives for Absolut, today the number one imported vodka in the USA with sales of more than 4 million cases annually. In 1999-2000, Mr. Schleifer led the introduction and national rollout of Absolut Mandarin, the most successful spirits launch in Seagram's history. In 2000, he also oversaw the brand's 20th Anniversary advertising and marketing campaign, which celebrated the brand and its milestones since the launch of Absolut in the USA in 1980.

There'll be another two-block party on the waterfront downtown Thursday night, courtesy of the Hard Rock Café, the Green House and The Happy Buzzard.
And this one, a month after the first one, will lead directly into a weekly series of eight lively Thursday nights starting Feb. 15, according to Hard Rock assistant general manager Peter Vossenberg.
This Thursday, four bands will be performing, starting at 6 p.m and ending when the Green House and the Hard Rock call it a night. The Sax Cymbals, in "five-piece trio" format, will serve up jazz on a stage in the Green House parking lot from 6 to 8 p.m. They'll be followed there by the Stevie Legend Band, playing mellow favorites from 8 to 10 p.m.
Meantime, Vossenberg said, Lefty Lucy will play "a little of everything" in the Green House from 9 p.m. until, while Public Nuisance cranks out classic rock inside the Hard Rock at the same time.
There's no cover charge for the indoor music. However, patrons may purchase a $5 wristband that entitles them to a free cocktail at each of the three night spots as well as other drink specials throughout the night.
Sax Cymbals leader Rusty Vellek sees the Thursday night events as an opportunity for folks "to start the weekend early."
Vossenberg says Hard Rock, the Green House and The Happy Buzzard – formerly Fat Tuesday's – decided to work together "to bring more people – hotel guests and local people – back downtown after dark on a regular basis. We decided on Thursday because it's usually between guests' arrival and departure and because it's typically been a slow time downtown."
For the weekly events, they hope to have as many seven "live acts" going, some in passageways and alleys, and some arts and crafts vendors set up, too. They have approached shops in the two-block area from International Plaza to Tommy Hilfiger about staying open until 8 p.m. on those evenings. "It's on a volunteer basis, but we're hoping they will take part," Vossenberg said. "The area is well lighted and we'll have it well secured."
He said the effort is separate from the St. Thomas-St. John Chamber of Commerce Destination Downtown Committee Friday night events, such as "Christmas in July" and "Miracle on Main Street." "Those are great," he said, "but they only happen once or twice a year."