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HomeNewsArchives$7 Million in Federal Grants Still Unused by Public Works

$7 Million in Federal Grants Still Unused by Public Works

June 20, 2005 — While sources of funding are in high demand across the territory for various capital projects, the Department of Public Works has been sitting on approximately $7 million in federal grant aid, according to an audit report issued by the Office of the Inspector General.
Issued by the U.S. Department of the Interior during the period from 1984-2001, the funds were awarded to fix solid waste and wastewater systems violations but have remained unused due to breakdowns in communication and fund mismanagement. Thankfully, according to Inspector General Steven van Beverhoudt, those funds are still available for use.
According to the report, three grants, totaling $11.4 million, were to be used by Public Works to: 1) repair, maintain, and operate the sewage disposal system in the Virgin Islands; 2) manage public landfill sites; and 3) administer/enforce laws covering the use of the sewage disposal system.
According to the report issued by the Inspector General's Office, only $4 million of this amount has been spent, and concerns have arisen as to the appropriate spending of these funds for procurement projects, salary charges, and the purchasing of equipment.
While the Inspector General's Office hoped to review money used to partially fund ten contracts—totaling $54.9 million—for waste projects, they were unable to determine whether two of these organizations were able to meet proper procurement requirements. Evidence of the basis for selecting these contractors was either incomplete or unavailable during the audit process, the report said.
Projects intended for the use of these funds are: scrap metal processing, Anguilla landfill studies, architectural and engineering plans for new wastewater treatment plants, and maintenance of existing treatment plants.
Salary costs of $4,401 were another discrepancy noticed by the IG's Office, where compensation requested by Public Works for employees did not follow stipulations outlined by a certain grant.
The IG's report stated that the Public Works Commissioner acknowledged the overpayment and stated that an appropriate adjustment would be made to the Office of Insular Affairs.
While Public Works also spent $1 million in order to purchase 99 items of equipment, four items were missing during the audit inspection. As the Department of Property and Procurement is obligated to conduct a complete inventory of all capitalized equipment, the IG's Office concluded that this requirement was not fulfilled.
In response, the Public Works Commissioner indicated that two of these items were under the $5,000 "capitalization threshold" and that they had been acquired prior to the updating of property capitalization guidelines.
In order to address these issues, the U.S. Department of the Interior proposed general recommendations to the V.I. government, including:
1) the institution of adequate controls over payroll charges before requesting reimbursement from grant funds;
2) a system to ensure that requests and deposits are accurately and promptly processed, submitted, and recorded; and
3) following appropriate procurement procedures when using grant funds.
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