The Virgin Islands Agriculture Department didn’t receive the $4.125 million it was owed by law over a six-year period, according to an Inspector General’s audit released Wednesday.
The Inspector General’s report found some personnel were unaware of procedures for transferring money from one agency to another. In other instances, the reason for the underfunding was not clear.
The Agriculture Department is supposed to receive at least $1 million from the Tourism Advertising Revolving Fund by June 30 each year, as well as contributions from the General Fund, in addition to the revenue it generates from the sale of agricultural products, rentals and leases, and other sources.
But from 2016 to 2018 it received no General Fund appropriations — a loss of $1.5 million — and only partial General Fund appropriations in 2021. The Tourism Advertisement Revolving Fund shorted the Agriculture Department $2 million from 2016 to 2021, according to the audit.
Agriculture officials failed to submit written requests to the Office of Management and Budget for funds to be released, according to the report.
“OMB officials informed us that the allotment did not occur because Agriculture officials did not submit a written request to OMB for the funding, as required. Also, OMB officials stated that they would not release funds without a written request from the recipient department. In response to our inquiry, the agriculture official responsible for this task told us they were unaware of the procedure for drawing down the funds. As a result, Agriculture lost its Revolving Fund’s $500,000 allotment for the Fiscal Year 2020,” according to the report.
Whether some written requests were made by the Agriculture Department and received by OMB seemed to depend on who was asked, according to the report.
“In Fiscal Year 2020, Agriculture requested the $1 million allotment in two parts, $500,000 each. Agriculture provided us with their funding request letters to OMB dated January 21, 2020, and June 15, 2020. Our inspection found that OMB acknowledged receipt of the January 21, 2020, letter for the initial $500,000. However, there is no evidence that OMB received the June 15, 2020, request letter,” according to the report.
OMB officials did not address why it underfunded Agriculture in 2017 but said instability within the Tourism Advertising Revolving Fund in 2018 led to underpayment.
“We asked OMB why funding was short of the required annual contribution. OMB did not specifically address the $500,000 funding shortfall for Fiscal Year 2017. However, for Fiscal Year 2018, OMB provided a memorandum dated March 6, 2018, in which the Acting Director of OMB informed the then-commissioner of Agriculture that the Fiscal Year 2018 funding reduction was due to the instability of the Tourism Fund,” according to the report.
In another instance, Agriculture officials requested their $1 million 2021 allotments in two $500,000 parts — one in January and one in August. The second request, however, came well after the June 30 deadline, the report outlines.
“ … OMB was under no obligation to honor this late request,” the Inspector General wrote.
Money owed from the Horse Racetrack Casino Revenue Fund didn’t make its way to Agriculture as mandated by law from 2016 to 2021 because horse racing TRAXCO company shut down operations in 2016 on St. Croix and 2017 on St. Thomas.
The Inspector General asked Agriculture Department personnel about the impact of the underfunding.
“One official stated, ‘Agriculture is currently in dire need of those funds to purchase heavy equipment [needed] to provide services to our farmers and perform various repairs on our buildings,’” according to the report.
Agriculture Department officials responded to the audit saying they agreed with the Inspector General’s recommendations: that they make relevant employees aware of the funding mandates and procedures for procuring the funds and that they make requests on time, according to the report.
