At elected leaders’ discretion, the government awarded nearly $23 million in assistance grants between January 2019 and May 2022 without adequate accountability or transparency, including more than $200,000 to one senior public officer and their immediate family members, according to a scathing report by Auditor General Sonia Webster.
Nearly half of the funds were awarded at the discretion of former Premier Andrew Fahie, who dramatically increased the grant allocations under his control shortly after coming to power in the 2019 general election, Ms. Webster found.
“The evidence strongly suggests that discretionary spending … tends to be used for political rather than welfare-optimising causes,” Ms. Webster wrote in her report, a redacted version of which was made public when it was tabled last Thursday in the House of Assembly. “These assistance grants programmes as operated within the government of the Virgin Islands lacked basic [tenets] of good governance such as accountability, equity and transparency.”
Elected leaders no longer have discretion over such spending: On the recommendation of the recent Commission of Inquiry, all assistance grant programmes were transferred to the Social Development Department last year.
But on Friday, Governor John Rankin said that he would forward Ms. Webster’s report to the Attorney General’s Chambers to assess whether the government should pursue recovery of any of the funds spent during the period in question.
“I will also ask the director of public prosecutions and the police to assess if any offences were committed,” Mr. Rankin added.
Though the governor assured the public that the audit report “in no way criticised those who are deserving of assistance and legitimately asked for support,” he said some of its findings “are deeply concerning.”
“The funds were for the most part not governed by any financial rules or eligibility criteria and were hence not consistently distributed on the basis of need,” he said. “All of the programmes were absent of documented objectives, and the audit highlights that individuals ‘within the orbit of the political arena may have received preferential treatment in the awarding of assistance.’”
Four similar programmes
The report reviews assistance grants awarded at the discretion of elected officials under separate programmes administered through four agencies: the Premier’s Office; the Ministry of Communications and Works; the Ministry of Education, Culture and Youth Affairs; and the House of Assembly.
Grants awarded at the premier’s discretion under the Premier’s Office programme accounted for 47 percent of the total, or about $10.7 million, the report notes.
The HOA programme — under which grants were awarded at the discretion of the 13 HOA members — spent about $9 million (39 percent). The ECYA Ministry programme spent just over $2.5 million (11 percent), while the CW Ministry spent about $707,000 (three percent) — each at the discretion of their respective ministers, according to the auditor general.
Areas of concern
The report flags several areas of concern, including instances where individual applicants received more than $50,000 in a single payment.
Other issues included a lack of focus or limitation on spending amounts; the absence of a clearly documented policy or programme objectives; and a lack of financial rules or instructions approved by the government or handed down by administrative bodies, according to the report.
In her review of the Premier’s Office programme, Ms. Webster noted that the grant spending dramatically increased the year Mr. Fahie took office in early 2019.
Spending on the office’s grants between 2016 and 2018 was less than $100,000 each year, but it jumped to more than $2.4 million in 2019 and to nearly $4.9 million in 2020 before dropping to about $3.1 million in 2021.
“Upon inquiry with the Ministry of Finance as to the reason for the significant increases in budgetary allocation for the programme, we were informed that the increase was made on the basis of direct request by [Mr. Fahie], but [the ministry] could not provide a clear basis for the request for increase in budgetary allocation,” the report states.
“The significant increases in budgetary allotments and expenditure without adequate justification as required by the budget process were found to be an abuse of process.”
District One got more
The report also found that the Premier’s Office grants were not evenly distributed across electoral districts.
Mr. Fahie’s First District received far more than any other, taking in more than $3 million (about 30 percent of the total). The next-highest districts — Five and Six — received less than $1.1 million each, with the lowest — Nine — receiving about $367,000.
“Given that the premier [was] also the First District representative, the disproportionate distribution of funds under this programme can be seen as politically motivated rather than welfare optimising,” Ms. Webster wrote.
All told, the Premier’s Office programme gave out 1,064 disbursements over three years, 432 of which exceeded $10,000, according to the report.
Transactions categorised as “educational assistance” totalled $2,694,191. Nearly $800,000 of that funding was awarded “without any documented evidence that the applicants were actually enrolled in any educational institution,” the report notes.
The office also awarded support to farmers and fishers. As part of it, grants totalling $76,650 were awarded to three First District residents who also received a total of $49,000 more under the separate Covid-19 Farmers and Fishers Grants Programme, the auditor general found.
The report also states that the Premier’s Office lacked documentation for most of the grants; awarded outsize scholarships outside of the Virgin Islands Scholarship Programme; presented awards to individuals who also benefitted from other grant programmes; and awarded business grants to recipients who didn’t provide business plans or other documentation.
The report was similarly critical of the more than $9 million in grants awarded at the discretion of elected leaders under the HOA programme
These grants, Ms. Webster found, covered a broad range of requests including assistance with rent, education, a radio programme sponsorship, gift certificates, medical expenses, business support, credit card payments and more.
The report also notes that the HOA programme did not have “clear objectives” or eligibility requirements that considered the socioeconomic status of applicants.
In some instances, HOA members used grants to engage consultants to provide marketing, public relations and communication services at significant costs, the report states.
In one case, an HOA member spent about $75,000 between July 2019 and April 2022 for consulting services carried out by an employee of the government, according to the auditor general.
Ms. Webster also found that District Four representative Mark Vanterpool authorised the disbursement of $90,789 to K-Mark Food Market, an entity in which he is a principle owner.
Additionally, she flagged “monetary gifts” ranging from $300 to $6,000 awarded during the Christmas season, totalling more than $300,000.
Out of a sample of 250 applications, only ten percent were deemed to be adequately supported by sufficient information and documentation, she added.
ECYA Ministry programme
In reviewing the ECYA Ministry programme, the auditor general found that the process for awarding the nearly $2.7 million in assistance grants did not consider the territory’s national educational needs and that there were “no criteria to guide awards.”
She also noted that grants were administered without analysis of financial and other implications. In 32 cases, the report states, ministry grant recipients also received awards from the VI Scholarship Programme.
“Beyond budgetary monitoring, the [ministry’s] assistance grants programme lacked adequate monitoring to give assurance that the funds disbursed were used for the intended purpose,” the report adds. “Monitoring activities were also lacking in the awarding of grants as several instances were identified where the same applicant received multiple successive awards.”
CW Ministry programme
The report also reviewed the CW Ministry programme.
Of about $707,000 in that programme’s grants, more than $220,000 (31 percent) was spent in District Five, which is represented by Deputy Premier and CW Minister Kye Rymer. The other districts received less than $100,000.
Additionally, grants were directed to execute minor district works such as bush trimming and park maintenance in order to offer employment to individuals, even though the ministry executes programmes that perform the same work, the auditor found. These grants totalled $185,247 across eight districts.
“Little to no due diligence was conducted by the ministry to inform the decision-making process,” the report adds. “No assessment was conducted to determine whether a need existed, and no evaluation was done to assess the merit of each application, as no criterion was used by which applications could be assessed.”
In the HOA last Thursday, some HOA members agreed with the gist of the auditor general’s recommendations, but several of them pushed back against her findings and insisted that the grants helped individuals who were in immediate need.
“A lot of times, individuals don’t understand the pressures to help individuals and the type of needs and concerns that are out there in the public,” said Premier Dr. Natalio “Sowande” Wheatley. “If you are not elected, you will never understand the depths of the needs in our society.”
Over the course of four hours, 10 members of the HOA shared their personal experiences surrounding assistance grants, and they gave opinions on how the funding should be administered in the future.
Dr. Wheatley recommended strengthening programmes that will help society collectively, acknowledging that government has “fallen down” in this area in recent years.
He also backed the former system of awarding grants at elected leaders’ discretion, though he said only one ministry should facilitate the process and that each elected representative should be required to account for each grant they award.
“We are going through a reform process, and in this reform process we must look at ourselves and take measures to improve on those weaknesses,” he said. “We didn’t have appropriate measures in place to be able to defend against abuse, so having it administered from one ministry will allow a greater degree of control and a greater degree of scrutiny to ensure that abuses do not occur.”
Opposition Leader Julian Fraser said he didn’t mind the grants being “taken away” from elected representatives last year, but he added that he had a problem with that money “not being channelled in a direction that people can benefit from.”
“The notion that we were getting political favours [from these grants] is a farce,” he said.“You can’t buy anybody’s vote. You’re not sure what they’re doing when they go behind that curtain.”
The copy of the report released to the public last week redacted the names of grant recipients, but an unredacted version was leaked to the public in early March, resulting in outcry from politicians and the governor.
During last Thursday’s HOA meeting, the premier harshly criticised the leak of the unredacted report prior to its official publication.
The report is dated Dec. 30.
ASSISTANCE GRANTS BY THE NUMBERS
The below figures show a breakdown of the assistance grants awarded at elected leaders’ discretion through four separate programmes between January 2019 and May 2022.
- Premier’s Office: $10,717,262
- House of Assembly members: $9,013,541
- Education and Culture Ministry: $2,501,394
- Communication and Works Ministry: $707,134