Years Later, Alric Simmonds’ Theft of Fed Dollars Still Hurting LEPC

A variety of federal grant funding for crime victims and others is still being partially withheld from the territory, years after a 2010 audit found a serious lack of financial controls over the funds, Law Enforcement Planning Commissioner Executive Director Franz Christian told the Legislature on Tuesday when the LEPC, Property and Procurement, and the V.I. National Guard Office of the Adjutant General presented their budgets to the Finance Committee.

With LEPC, the 2010 federal audit found insufficient financial controls over spending of 40 grants between 2005 and 2010, totaling more than $18 million. The auditors found those deficiencies enabled former government aide Alric Simmonds to embezzle at least $1.2 million from a government bank account. Simmonds pleaded guilty and in 2008 was sentenced to eight years in prison.

Meanwhile, seven years later, the territory is still working with the U.S. Department of Justice to clear up its remaining concerns.

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"Although we have had a myriad of challenges primarily because of the audit finding of 2010, we are overcoming them. Even though our recently awarded grants are being withheld, we are still releasing grant funds to our government agency partners and nonprofit organizations and faith-based entities," Christian told the Finance Committee during budget hearings Tuesday.

"I can also convey to you that my staff is in the process of closing out the few remaining audit findings that would then enable the release of the holds on our grant monies," he said. Christian said the LEPC "has been able to satisfy approximately 80 percent of the 25 audit recommendations and the corresponding subsections with the assistance of the Department of Finance."

Last year, then-LEPC director Victor Browne told the Finance Committee that seven of the 25 recommendations were still to be implemented. (See Related Links below)

But they are awarding 2011 and 2012 funds to subgrantees "due to prior approval requests," he said.

Sen. Terrence "Positive" Nelson asked what is needed now to expend the federal grant funding.

Christian said funding is available now, but not at the discretion of LEPC. "We can access the grants, senator, we just have to get special approval from the Department of Justice to expend the funds," Christian said. Affected are about $5 million in grant funds.

The LEPC is designated by the governor of the Virgin Islands as the State Administering Agency, which means it is the liaison with the U.S. Department of Justice and the Office of Justice Programs.

The commission currently manages the Justice Assistance Grant, Juvenile Justice and Delinquency Prevention Grants, Victims of Crime Assistance Grant Violence Against Women Grant, Residential Substance Abuse Treatment Grant and enforcement of the underage drinking laws. The Justice Assistance Grant and Violence Against Women Grant comprise the bulk of the withheld funds.

Christian presented the small agency’s budget of $587,000, with $321,000 of that for wages and salaries and another $143,000 for benefits and Social Security and Medicare taxes. Another $92,000 is budgeted for rent and other services and charges, and $30,000 for utilities.

V.I. National Guard Adjutant General nominee Col. Deborah Howell presented the Office of the Adjutant General’s Fiscal Year 2016 operating budget of $6.39 million.

That local funding includes a General Fund appropriation of $1.23 million, a small reduction from the year before. Of that, $385,000 is for wages and salaries; $158,000 is for Social Security and Medicare taxes and fringe benefits; utilities are $460,000; other services and charges is $183,000, with repair and maintenance accounting for most of that. Capital outlays are $19,000 and $40,000 is for supplies.

OTAG expects another $5.16 million in federal funding for the running of the office.

The V.I. National Guard as a whole expects about $47.6 million in federal funding for the upcoming year, Deputy U.S. Property and Fiscal Officer Lt. Col. Terrence Smith told the committee.

Acting Property and Procurement Commissioner Randolph Bennett presented that agency’s proposed FY16 General Fund budget of $3.2 million; about $300,000 lower than the 2015 appropriation. The agency also expects about $7.6 million in revenues, mostly from the funds managed by the department, including the Business and Commercial Account, Central Motor Pool Fund, Central Warehouse Revolving Fund, the Gasoline Coupon Program, Printing Production Fund and the General Fund.

Among its responsibilities, Property and Procurement handles the renting of government property to private businesses and the government’s rental of private properties. It also oversees government property if it is not being used.

No votes were taken at the information gathering budget hearing.

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