The Virgin Islands government was warned about some of the sewage problems decried at Friday's Senate hearing way back in February 1998, when a federal audit of system user fees was released.
"We found that the government did not adequately administer the sewage system user-fee program," the Interior Department's then-acting Inspector General Robert Williams wrote in the audit.
The report, which the territory has only partially responded to, found the V.I. Public Works Department did not always assess fees that reflected the cost of operating the sewage system, fees were not accurately assessed or accounted for and delinquent users were not aggressively pursued.
The audit found the government was owed $349,545 in delinquent fees, and billing errors totaled $147,667. Auditors said the government could raise an additional $400,000 if user fees were increased by $25, as was recommended by an Army Corps of Engineers market feasibility study in 1995.
The user fees are collected as part of the real property tax bill assessed to residents who are connected to the sewage system.
The fee system was implemented in 1988 as a condition of U.S. Environmental Protection Agency grants given to the territory to construct wastewater treatment facilities. DPW, however, has employed the same fee schedule — $50 per unit — since its inception.
"Public Works internal policy documents state the $50 fee was based on operating costs during fiscal years 1986 and 1987, but Public Works officials did not provide any specific reasons why the recommended fee increase has not been implemented," Williams wrote. "We determined that the $25 increase in the annual per-unit user fee would generate a 50 percent increase in annual revenues available for the operation and upgrade of the sewage system."
DPW is responsible for operating the sewage system, but it shares the billing and collection responsibilities with the Office of the Tax Assessor and the Finance Department.
When fees were collected, Finance did not always ensure they were properly accounted for, the audit found. User-fee revenues were supposed to be deposited into either the Sewer Fund or the Sewer Waste Water Fund.
In fiscal year 1994, $658,055 was collected but only $39,089 was recorded as revenues in either of the funds. In fiscal year 1996, collections totaled $301,368, but no revenues were recorded in the funds.
The audit further found that DPW and the tax assessor did not coordinate their activities to ensure billing accuracy. The audit found DPW maintained a master list of system users, but did not submit it to the Tax Assessor's Office.
The audit also found several billing inaccuracies. The bill for a business facility with 474 "billing" units was assessed $40,000 less than it should have been and a government building was under-billed by $60,000.
DPW also did not consistently inspect new buildings or renovation projects to identify if billing changes were necessary, nor did its records show if fees had been collected when new users applied for and were connected to the system.
Then Gov. Roy L. Schneider concurred with all eight of the inspector general's recommendations, including revising the fee schedule, ensuring billing accuracy, standardizing applications for connection, improving coordination with the tax assessor, maintaining more accurate accounts and more aggressively pursuing delinquent ratepayers.
According to the audit, however, only three of the recommendations have been sufficiently implemented; these include Schneider directing the commissioner of Finance to do three things: more aggressively enforce fee collection, consolidate the waste funds and deposit sewage fees daily.
Concerning the other recommendations, which the inspector general still considers unresolved, Schneider wrote that procedures were being developed.
The sewage user-fee audit is just one of more than 30 V.I. audits with recommendations that have not been implemented. These lingering audits were identified in the Interior Department Inspector General's Semiannual Report, delivered to the U.S. Congress in April.
Earlier this week, a Government House spokesperson said Gov. Charles Turnbull had directed Cabinet members to use audits to shape policies and procedures in their departments.
