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<\/a>Virgin Islands Inspector General Steven van Beverhoudt.<\/p><\/div>\n
Although great strides were made in protecting the independence of the OVIIG, areas that potentially compromise this independence remain. These areas are (i) the location of the OVIIG within the Government\u2019s structure, (ii) the manner in which the OVIIG\u2019s budget is funded, and (iii) the reporting of violations of law.<\/p>\n
Title 3 Chapter 40 Section 1203(e) of the Virgin Islands Code (Code) requires the OVIIG to comply with standards established by the Government Accountability Office of the United States (GAO) and the American Institute of Certified Public Accountants (AICPA).<\/p>\n
The Government Auditing Standards<\/em> issued by GAO discusses the issue of independence in their first General Standard. It states; \u201cIn all matters relating to the audit work, the audit organization and the individual auditor, whether government or public, must be independent.\u201d <\/em>It further states that; \u201cThe ability of audit organizations in government entities to perform work and report the results objectively can be affected by placement within government and the structure of the government entity being audited.<\/em><\/p>\n Bill 31-0014 basically takes Title 3, Chapter 40 of the Code and moves it to Title 33. It further addresses the issue of budget funding, control, and the investigation and reporting of violations of local and Federal laws.<\/p>\n Location within the Government\u2019s Structure<\/span><\/strong><\/p>\n The Territory of Guam and the Commonwealth of the Northern Mariana Islands (CNMI) are the two Pacific territories that most closely resemble the Virgin Islands in population, government structure, and advancement as it relates to local audit and investigative activities.<\/p>\n Guam\u2019s Organic Act authorizes the Guam Government to create a Public Auditor\u2019s Office independent of the three branches of their government. The Public Auditor of the CNMI is established by their Constitution as an independent agency of the Commonwealth Government. In the 50 states, most Public Auditor\u2019s Offices (most of which are known as the Auditor General\u2019s Office) are either a part of the Legislative Branch or are independent offices with the head an elected position.<\/p>\n Under the current structure, the OVIIG\u2019s enabling legislation places it under Title 3 of the Code, the Executive Branch. A 2002 Letter of Advice issued by then Attorney General Iver Stridiron basically stated that the OVIIG, although \u201c\u2026 an independent agency\u2026is situated structurally within the executive branch\u2026\u201d and is \u201c\u2026 subject to the usual statutory obligations of all executive government agencies.\u201d<\/p>\n Bill 31-0014 removes the OVIIG from Title 3 and places it under Title 33 Subtitle 3 (Finance) of the Code under a new Chapter 119. This should give the OVIIG the level of administrative and fiscal independence as the other semiautonomous entities like the Water and Power Authority and the Port Authority.<\/p>\n Opponents to this section of the bill claim that: it sets up a super agency beholden to no one; the OVIIG will have police powers and even semi-prosecutorial powers; it will create a fourth branch of Government; no other semiautonomous agency has unfettered independence; and, all semi-autonomous agencies report to a board.<\/p>\n In response to these assertions, I maintain that OVIIG would not become a super agency. It will be answerable to the Legislature by the annual budget process and as requested by the Legislature whenever and as often as they desire to have a legislative hearing or meeting. The Legislature has the ability to establish a line item budget.<\/p>\n Current law already gives the OVIIG law enforcement powers and subpoena powers as is done by almost all Federal OIG and other state OIG offices. The law does not now nor does Bill 31-0014 give the OVIIG any type of prosecutorial powers, those powers rest with the V. I. Attorney General and the United States Attorney.<\/p>\n The OVIIG would not be the fourth branch of Government it would be a semiautonomous entity that reports its findings to the three branches of the Government as appropriate and to the Legislature at least annually on how funds are spent. The OVIIG is not like any other department or agency of the Executive Branch and should not be compared to one. It should be the independent \u201cwatch-dog\u201d of the three branches of the Government and the instrumentalities, reporting fraud, waste and abuse to each as required.<\/p>\n The Public Auditors of Guam and the CNMI are independent entities outside of the three branches of the Guam and CNMI governments as set out in their Organic Act and Constitution respectively. This is where the V. I. should be leaning toward.<\/p>\n The legislative body would act as the \u201cboard\u201d for the OVIIG, as it would report to this body at least on an annual basis or as often as requested by the Legislature. In addition, there is a mechanism to remove the V. I. Inspector General for neglect of duty or malfeasance in office.<\/p>\n There are about 19 autonomous and semiautonomous entities in the Virgin Islands, all of which are independent from the control of the Office of Management and Budget (OMB); even those that receive local funding from the central Government. As an example, when the 8% salary cut was put into effect, these entities were not automatically affected. The proposed Bill gives the OVIIG that fiscal independence that was intended by the Legislature in 1999 by Act 6333, but is now questioned by the 2002 Attorney General Letter of Advice.<\/p>\n It is my opinion that ultimately the Legislature should petition the United States Congress to amend the Virgin Islands Organic Act to create an independent OVIIG similar to Guam.<\/p>\n The Budget Issue<\/span><\/strong><\/p>\n In Guam, 1 G.C.A. \u00a7 1911 (Repealed), established the Public Auditor\u2019s Office budget at .25% of the budget for the Government of Guam. In correspondence with the current Public Auditor, it was indicated that the provision was repealed because the Lieutenant Governor did not want any agency with a set aside budget. They do have more flexibility than OVIIG however, in that their budget is submitted directly to their Legislature and not through the executive budget office. Unlike the OVIIG whose budget request must conform to the budget ceiling restrictions established and controlled by the OMB, again contrary to the intent of the Act 6333. I must note that the restrictive nature of the fiscal constraints has negatively impacted our ability to conduct several audits and investigations due to limited staff.<\/p>\n For the CNMI, their constitution guarantees a budget of $500,000, and requires the Secretary of Finance to withhold 1% of all appropriations to fund the Public Auditor\u2019s Office. The funds are deposited into a special account established specifically for the Public Auditor.<\/p>\n Is it a coincidence that in Fiscal Year 2015 when this legislation was making its way through the 30th<\/sup> Legislature, for the first time in 25 years of budget presentations, the previous administration decided to budget the OVIIG as an independent agency? This was the first time that the budget was allotted in its entirety in accordance with Act 6333.<\/p>\n Recently, OMB submitted a 2016 Budget ceiling of $1.6 million, a 20% cut of $400,000 from the $2 million 2015 Budget. An appeal was made to Governor Mapp and fortunately, he agreed with the need to maintain our full funding. What would the consequences be if Governor Mapp did not agree to not cut the OVIIG Budget?<\/p>\n Bill 31-0014 in subsection 3506 establishes the annual budget at \u201c\u2026one-half of one percent of the overall Budget of the Government, but not less than $3,000,000.\u201d It further provides that any unused funds be returned to the General Fund for the Legislature to appropriate.<\/p>\n Again opponents claim that: Bill 31-0014 establishes a budget that cannot be reduced, while, appropriations are set\u00a0by an explicit act of the Legislature subject to the fiscal discipline; and, the proposed OVIIG budget is not based on needs.<\/p>\n In reality, the law as it stands now requires that the OVIIG\u2019s funds be allotted in the entirety at the beginning of the fiscal year. OMB cannot reduce the appropriation once signed into law. The Legislature from the 1999 Act 6333 intended for the OVIIG to be fully funded, and if cuts are needed, they are to be taken from other departments and agencies.<\/p>\n Although the minimum appropriation will be based on a percentage, it still will be appropriated by an explicit act of the Legislature. The minimum budget was established to protect the independence and ability of the OVIIG to have available the necessary funds to meet its responsibilities without the threat of having funds reduced. Because of the small budget, over the years consistent budget cuts have prevented the OVIIG from hiring the necessary staff to meet its mandate. The CNMI has a minimum budget and requires a budget of 1% of all appropriations.\u00a0 In addition, their funds are to be deposited into a separate account established strictly for their own use.<\/p>\n The Bill provides that if the OVIIG does not need all of the available funds in its annual budget proposal, the funds would be available for the Legislature to appropriate as desired.<\/p>\n Reporting of Violations of the Law<\/span><\/strong><\/p>\n Currently, Title 3 Section 1203(f), (g) and (h) require the V. I. Inspector General to report suspected violations of law to the Attorney General. The proposed legislation adds the United States Attorney after Attorney General wherever it appears in the language. This would give the V. I. Inspector General the ability to report matters to the United States Attorney when possible violations of Federal law are uncovered.<\/p>\n There was no opposition to this section of the proposed legislation.<\/p>\n In conclusion, I fully support Bill 31-0014, assuming it does what it intends to do. It can finally give the OVIIG the ability and resources to better meet the enormous mandate, responsibilities, and many requests for audit. It can also help us provide Government entities with the assistance, through audits and inspections, to operate effectively and efficiently.<\/p>\n None of the concepts in this bill are new. Our fellow territories in the Pacific saw the need for an independent and adequately funded Public Auditor. With the constant cry of corruption, misuse and abuse of Government funds, a strong and independent audit presence is imperative. The \u201cball rests in the court\u201d of the Virgin Islands Legislature. It is the \u201cTime to Build\u201d.<\/p>\n <\/p>\n Submitted by:<\/em><\/p>\n Steven van Beverhoudt, who is serving as the Virgin Islands Inspector General for more than 26 years.<\/em><\/p>\n <\/p>\n The views and opinions expressed are solely those of the author, and may not\u00a0necessarily reflect the views and opinions\u00a0of the staff and management of the VI Consortium.<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":" On Wednesday, April 15, 2015 Senator Clifford Graham\u2019s Bill 31-0014, an Act amending Title 33 of the Virgin Islands Code, by adding Chapter 119 to re-establish the Office of the Virgin Islands Inspector General (OVIIG) as a semiautonomous agency of the Virgin Islands Government (Government), was discussed at the meeting of the Committee on Government […]<\/p>\n","protected":false},"author":3,"featured_media":21113,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[228,11,191,4,8,147],"tags":[1165,1713],"yoast_head":"\n