July 9, 2007 — A budget cut of about $180,400 for fiscal year 2008 will make it difficult to expand services and hire personnel for a new office on St. Croix, Inspector General Steven van Beverhoudt told senators during the first round of budget hearings Monday.
Van Beverhoudt, whose agency has repeatedly experienced funding cuts over the years, explained that he had originally been given a budget ceiling of approximately $1.9 million by the Office of Management and Budget. However, the figure has been chipped down to nearly $1.8 million as OMB has tried to reduce the amount of funding earmarked for vacancies within the departments and agencies, he said.
The additional funds would have covered the salaries of new employees intended for the St. Croix office, a project van Beverhoudt has had on his wish list for at least the past three years. If senators decide to stick with the proposed budget figure during the markup process, then the positions will not be filled until late 2008, he said.
The inspector general intends to have a fully functioning unit on St. Croix by the end of FY 2008. Negotiations for a space at the Lagoon Street Complex are ongoing with the V.I. Housing Finance Authority, and should be complete by Aug. 1, van Beverhoudt said.
While senators had few questions about the proposed budget, many raised concerns about whether the agency's ties to the executive branch — in particular, the fact that the governor appoints the territory's inspector general — pose a conflict of interest that prevent audits from being conducted on various government entities. As in previous years' budget hearings, van Beverhoudt suggested that the inspector general be appointed instead by a three-member panel consisting of the governor, Senate president and chief justice of the V.I. Supreme Court.
"That nominee would then go before the Senate for confirmation," he added. "That way all three branches get to participate in the process, instead of just one person. And that will help us become a more independent entity of the government."
Despite the repeated concerns, including a lack of staff and funding, the audit process could be improved by increased cooperation from the governor, along with the upcoming implementation of the new enterprise-resource planning system, van Beverhoudt said.
While departments and agencies often do not act on recommendations included in audit reports released by the Office of the Inspector General, according to senators, the new administration has displayed a "keen interest" in reducing government deficiencies van Beverhoudt said.
"I have been the inspector general for over 18 years, now serving under a fourth governor, and I would be remiss if I did not publicly compliment Gov. deJongh for showing his interest in the operations of the V.I. Inspector General's Office," he said. "In the first six months of the deJongh administration, I have met and consulted with the governor more than I have met some of the other chief executives during their entire terms in office."
The new administration will soon sign off on a new pay plan for the agency, which would help attract more qualified people, van Beverhoudt added. While government salaries are generally set by the Division of Personnel and sometimes altered through the collective-bargaining process, a bill recently signed into law by the governor allows van Beverhoudt to regulate his employees' wages. The bill, sponsored by Sen. Terrence "Positive" Nelson, also allows the inspector general to hire and fire his own employees — an authority van Beverhoudt has requested for several years.
"The territory has come a long way in being more accountable and cost effective," van Beverhoudt said. "And while we still have a ways to go, I believe these things represent another step in the right direction."
After the meeting, Nelson said he would submit legislation to restructure the Office of the Inspector General, making it a more independent government agency.
Present during Monday's meeting were Sens. Liston Davis, Carlton "Ital" Dowe, Juan Figueroa-Serville, Louis P. Hill, Neville James, Nelson and James Weber III.
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