More than $3.3 million in spending by the Board of Education came under question in a newly released report from the Virgin Islands Office of the Inspector General. The audit report containing the details made headlines late last year when it was leaked while still in the draft stage.
The review by board officials is included in the final report – released March 6 – includes a response by the education board. In that response, Board Chairwoman Arah Lockhart disputed some of the criticism leveled by Inspector General Steven Van Beverhoudt.
Lockhart said the education board would comply with the inspector general’s recommendations, but pointed to interpretations of the law, executive orders and regulations that do not apply to the board.
In his transmittal letter to Gov. Albert Bryan Jr. – also not included with the draft report – Van Beverhoudt said auditors found fault with the way the education board handled contracts and how it exercised financial controls. Auditors also cited overpayments to a board employee who came to serve after retiring from a government position.
There were also unauthorized contributions made for another employee to a pension fund outside of the Government Employees Retirement System. Over a 10-year period, those payments totaled $141,853.
The report asked how stipends paid to board members were justified, and what became of paperwork needed to document to show the link between official acts taken by the board and those payments.
“Our audit found that the board was not in compliance with various statutes of the Virgin Islands Code and executive orders, with regard to retirement matters, financial controls and contract administration,” Van Beverhoudt said.
Lockhart expressed concern that those findings might hamper the board’s ability to function.
“Because of the implications of some of the findings and the negative impact they could have on the board’s ability to function effectively, we believe it is appropriate to express where we differ with your findings,” the chairwoman said.
The Education Board provides a level of oversight over the public school system and sets policy for some education related programs. It also administers millions of dollars in college scholarships yearly for students attending public school.
Much of the work takes place at the committee level, the chairwoman said. Board members attending committee meetings receive a stipend. When the board meets as a board in formal session, they also receive a stipend, Lockhart said, but at a higher rate.
Auditors said the Board of Education overpaid stipends by $9,925 in 2016. An additional $2,700 in stipends was paid to board members “who were already being paid by their government jobs.”
That reference might include Lockhart, who had held top positions at the Labor Department throughout her tenure with the board.
But in the reply to the auditors, the chairwoman said there is nothing in the rules prohibiting board members to receive stipends while they were on official leave from those government jobs. And while lawmakers passed bills forbidding members of some boards from collecting stipends while holding government jobs.
That was the case for some boards, she said. The Legislature said board members serving on Waste Management and Port Authority – and others – could not collect stipends while holding government jobs.
That was never the case for the Board of Education, she said. But Lockhart agreed with the finding on payment of stipends without supporting documentation.
“The board for the most part agrees with this finding,” she said, adding that the matter could be fixed by implementing policies and procedures. However, Lockhart said, the inspector general had to obtain an opinion from the attorney general to reach that conclusion.
Two conflicting statutes in the V.I. Code required clarification, she said.
The chairwoman admitted the board had too much work for the retiree who should have had their compensation limited to 600 hours. In defense of the action, Lockhart said the board and the employee in question notified GERS about overpayments.
But the board and auditors differed sharply on paying into a retirement fund outside of GERS.
Van Beverhoudt, in his letter to the governor, said the funds were taken from a source set aside for payments to GERS. The board chairwoman pointed to correspondence between the board and GERS director Austin Nibbs on the matter.
In a letter written to the board, Nibbs acknowledged the employee met qualifications to opt out of making payments to the government pension fund, the chairwoman said.