Inspector General's audit reports mismanagement of Agriculture Department programs on St. Croix
Published: September 20, 2013
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ST. CROIX - A V.I. Inspector General's audit of two of the V.I. Agriculture Department's programs on St. Croix found ineffective management, improperly executed lease agreements, inadequate monitoring and slow and inconsistent billing for services, among other issues.
"I am pleased with the review that the Inspector General's Office did because they were very thorough, very professional," said Agriculture Commissioner Louis Petersen Jr. "Naturally, it pointed out some areas we've got to make improvements on. We're all in favor of making the improvements as an agency."
The department intends to be a good steward of the government property and lands it has jurisdiction over, Petersen said. Before the audit began, the Agriculture Department already had started to work on some changes to address some of the issues the audit turned up, he said.
The recent audit was of Agriculture's Land Leasing and Land Preparation programs on St. Croix, and covered Fiscal Years 2008 and 2009.
The department concurred with all nine of the Inspector General's recommendations.
V.I. Inspector General Steven van Beverhoudt said in the report - issued in the form of a letter to Gov. John deJongh Jr. and Senate President Shawn-Michael Malone - that Petersen's responses to the recommendations in the report "are sufficient for us to consider them resolved."
The Inspector General's Office will follow-up on implementation of the corrective actions in the future, according to the letter.
Inspectors found that the Agriculture Department did not manage the Land Leasing and Land Preparation programs effectively or in accordance with the law.
According to the audit report, the department has not adequately formalized policies and procedures for administering the programs and failed to follow the requirements in V.I. Code for leasing public lands and the annual reporting of harvest and livestock statistics.
Auditors found that not all of the Agriculture Department's policies and procedures for the programs had been documented in writing, and did not find any written internal guidelines that addressed the steps used by the department for monitoring land-use compliance.
Improperly leased land
Inspectors found that Agriculture leased public lands outside of the provisions of V.I. Code, by executing some lease agreements without involving and obtaining written approval on the agreements from the V.I. Property and Procurement Department, the governor or the V.I. Legislature. The leases also were not approved for legal sufficiency by the V.I. Justice Department.
Agriculture leased land on short-term one-year agreements or long-term 20-year agreements.
According to the report, the short-term agreements were approved solely by the Agriculture Department, which violates the law.
The format for the short-term permits developed and changed over time, from an abbreviated version of the long-term agreement to a form dubbed a "temporary land use permit." Eventually, the department allowed some farmers to occupy and set up farms on public land based on one-page letters signed by the commissioner.
According to the audit, 64 percent of the leases or occupancies active as of FY 2010 were based on short-term agreements or letters and had not been processed through the required approval chain.
Agriculture has stopped issuing temporary permits.
Auditors found that Agriculture did not properly monitor the use of land it leased or land that it cleared.
Agriculture offered subsidized bulldozing services for farmers during the audit period for $40 per hour, compared with private companies that offered bulldozing services at $120 to $250 per hour, according to the report.
When Agriculture clears land, farmers are required to engage in approved farming activities for at least a year, but according to the report, Agriculture did not monitor the private land it cleared to ensure that happened.
Auditors also noted the lack of a paper trail documenting follow-up assessments in addressing non-compliance and violations.
Inspectors also visited 22 properties leased to farmers that had been issued deficiency notices in previous years to see whether Agriculture had effectively monitored for corrective actions.
Nine of the 22 properties "appeared to show little evidence of meaningful commercial agricultural activity," the report says.
Billing and collecting
Auditors found that Agriculture's billing practices were "inconsistent and untimely," and that policies were not always followed.
In looking at a sampling of job orders and invoices, auditors found $11,700 in charges for which required deposits were not collected from farmers.
The report also found that Agriculture did not effectively pursue collection on outstanding balances for land leases and land preparation services.
Inspectors found that as of Sept. 30, 2010, there were 323 accounts totaling $89,497, that were delinquent 31 or more days. Additionally, 90 percent of those were in arrears more than 90 days.
The audit found that Agriculture's efforts to collect the outstanding balances "were sporadic and unsystematic."
Petersen said some of the issues are related to limited resources, and that Agriculture is trying to do some cross-training with staff, so that more people can pitch in to help in multiple areas as needed.
"It's a strain on staff, but it's the only way really to comply," he said.