[Survey Report on the Special Supplemental Food Program for Women, Infants and Children, Department of Health, Government of the Virgin Islands]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 97-I-590

Title: Survey Report on the Special Supplemental Food Program for
       Women, Infants and Children, Department of Health, Government
       of the Virgin Islands 

U.S. Department of the Interior
Oflice of Inspector General

SURVEY REPORT

SPECIAL SUPPLEMENTAL FOOD PROGRAM FOR
   WOMEN, INFANTS AND CHILDREN,
    DEPARTMENT OF HEALTH,
  GOVERNMENT OF THE VIRGIN ISLANDS

REPORT NO. 97-I-590
MARCH 1997

 


V-IN-VIS-005-95

United States Department of the Interior

OFFICE OF INSPECTOR GENERAL
   Washington, D.C. 20240

MAR 2 4 1997

SURVEY REPORT

Honorable Roy L. Schneider
Governor of the Virgin Islands
No. 21 Kongens Gade
Charlotte Amalie, Virgin Islands 00802

Subject: Survey Report on the Special Supplemental Food Program for Women, Infants
   and Children, Department of Health, Government of the Virgin Islands
    (No. 97-I-590)

Dear Governor Schneider:

This report presents the results of our survey of the Special Supplemental Food Program
for Women, Infants and Children administered by the Department of Health, Government
of the Virgin Islands. The objective of the review was to determine whether: (1) the
Department of Health complied with grant terms and applicable laws and regulations and
(2) procedures were adequate to ensure that only eligible applicants received assistance.

Although our review was completed prior to Hurricane Marilyn in September 1995, we
delayed issuance of the report because we believed that the Government would not be in
a position to respond during the immediate hurricane recovery period. In addition, we
focused on and gave priority to performing several hurricane-related reviews for the
Federal Emergency Management Agency. Nonetheless, based on our reevaluation of the
survey findings and recommendations, we believe that, although some of the specific
examples cited in the findings may now not be current, the issues and the
recommendations presented in this report are still valid. The recommendations, if
implemented, should result in long-term improvements in the operations of the Special
Supplemental Food Program for Women, Infants and Children.

BACKGROUND

The Special Supplemental Food Program for Women, Infants and Children, referred to as
the WIC Program, was established in September 1972 by Public Law 92-433, an
amendment to the Child Nutrition Act of 1966. The purpose of the WIC Program is to
provide supplemental foods and nutrition education to eligible persons through local
agencies. According to the Code of Federal Regulations (7 CFR 246. l), "The Program
shall serve as an adjunct to good health care during critical times of growth and

 
development, in order to prevent the occurrence of health problems, including drug and
other harmful substance abuse, and to improve the health status of these persons."
Supplemental foods, access to health care, and nutrition counseling are authorized and are
to be provided to eligible women who are pregnant, lactating, or up to 6 months
postpartum; to infants; and to children up to age 5. Criteria for program eligibility include
not having sufficient income to meet nutritional needs and being at special risk with
respect to physical and mental health because of inadequate nutrition or health care or
both. Because the Program is funded by a fixed-dollar grant from the U.S. Department
of Agriculture, the Program has a specific priority ranking system that mandates services
first to pregnant women, lactating women, and infants and then to children and postpartum
women. Medical problems are also ranked before dietary problems.

In the Virgin Islands, the WIC Program is administered by the Department of Health
under an agreement with the U.S. Department of Agriculture's Food and Consumer
Service. The Program was implemented in the Virgin Islands in March 1974 and is 100
percent Federally funded by the U.S. Department of Agriculture. In the Virgin Islands,
the Program uses a predominantly automated system at seven clinic sites throughout the

authorized food package at 16 participating food vendors. During fiscal years 1994 and
1995, the Program had an average of 7,693 participants each month. Grant authorizations
for fiscal years 1994 and 1995 totaled $11.7 million: $8.7 million for food costs and $3
million for administrative costs.

SCOPE OF SURVEY

The scope of the survey included a review of WIC Program operations, primarily on St.
Thomas, for fiscal year 1994 and the first two quarters of fiscal year 1995. The survey
was conducted from May through August 1995 at the Departments of Health and Finance.

Our survey was made in accordance with the "Government Auditing Standards, " issued
by the Comptroller General of the United States. Accordingly, we included such tests of
records and other auditing procedures that were considered necessary under the
circumstances.

As part of our review, we evaluated the WIC Program's system of internal controls related
to Program administration, the eligibility and certification of Program participants, and
Federal grant drawdowns. Weaknesses identified during the review are discussed in the
Results of Survey section of this report. Our recommendations, if implemented, should
improve the internal controls in these areas.

coupon, or other document which is used by a participant to obtain supplemental foods. "

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PRIOR REPORTS

The Office of Inspector General has not performed any prior audits of the WIC Program.
However, from 1989 to 1994, the U.S. Department of Agriculture's Office of Inspector
General and Food and Nutrition Service (now the Food and Consumer Service) performed
several reviews as follows:

     -  In April 1989, the U.S. Department of Agriculture's Office of Inspector General
issued the report "Survey of the Special Supplemental Food Program for Women, Infants
and Children in the U.S. Virgin Islands, " The report stated that the WIC Program needed
to strengthen its management of and controls over Program operations. Weaknesses were
identified in the following areas: (1) the one-to-one reconciliation of food instruments; (2)
vendor authorization and monitoring; (3) Program integrity; (4) financial management
operations; (5) procurement of WIC services; (6) certification operations; and (7) general
internal controls.

     -  In June 1991, the U.S. Department of Agriculture's Food and Nutrition Service
issued a report on its financial review of food and administrative costs for the Virgin
Islands WIC Program. The report stated that the Program needed to improve its ability
to: (1) manage its food fund cash flow; (2) routinely determine the status of administrative
outlays; (3) submit Federal reports in a timely manner; and (4) increase the WIC monthly
participation level.

     -  From November 1991 to December 1994, the U.S. Department of Agriculture's
Food and Nutrition Service issued four State Technical Assistance Review reports.  The
November 1991 report stated that the Virgin Islands WIC Program devoted an extensive
amount of time to vendor monitoring but did not spend an appropriate amount of time on
other vendor management functions. The January 1993 report stated that the Program
needed to monitor participation levels, expenditures, and rebates on a monthly basis and
to make adjustments to budgeted data in order to reach as many potentially eligible
participants as possible. The December 1993 report stated that the Program developed
appropriate policies and procedures in nutrition services. The December 1994 report
stated that the Program developed appropriate policies and procedures for the areas
reviewed and that the vendor management section had significantly improved its
operations.

RESULTS OF SURVEY

The Virgin Islands Department of Health has administered the WIC Program in an
effective manner and in compliance with grant terms and applicable laws and regulations.
Over the past 5 years, WIC Program personnel have worked closely with representatives
of the U.S. Department of Agriculture's Food and Consumer Service to bring the Program
into compliance with Federal regulations. As a result, Federal financial reports have been
submitted in a timely manner, studies to support the time that workers allocate to nutrition
education activities and breastfeeding support activities have been developed, a computer

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system has been implemented, and Program participation is approaching the maximum
level. However, we believe that Program administration could be even more effective if
the Department of Health would: (1) ensure that administrative funds are expended in
accordance with established criteria and are used exclusively for WIC Program activities;
(2) require Program personnel to query applicants and to document the results of income
contributions from persons outside the household; (3) require a competent professional
authority2 to review and approve the nutritional risk assessment and food package
determination at the time of certification; and (4) update the drawdown process for the
food portion of the grant funds.

Program Administration

During fiscal year 1994 and the first two quarters of fiscal year 1995, the WIC Program
used $2.2 million in Program administration funds: $1.6 million for salaries, fringe
benefits, and indirect costs and $560,000 for equipment, supplies, professional services,
travel, and utilities.

We found that, on an overall basis, administration funds were used in accordance with
grant terms and applicable laws and regulations. However, we identified minor internal
control weaknesses related to the funding of Program personnel, the procurement of
equipment, and the execution of contract amendments.

The Code of Federal Regulations (7 CFR 246.14) defines allowable costs as those costs
"necessary to the fulfillment of Program objectives. " The Code (7 CFR 3016.36) further
states that "all procurement transactions will be conducted in a manner providing full and
open competition. " The lack of compliance by Program personnel with these regulations
resulted in deficiencies in the expenditure of administration funds. Funds totaling $29,900
that were for the WIC Program were paid to an employee who also performed duties for
other units of the Department of Health; five equipment purchases, totaling $110,000,
were made by the WIC Program without the benefit of competition; unallowable
entertainment expenses totaling $2,600 were incurred; and contract amendments for the
company that provides administrative processing services of the food instruments were not
executed in a timely manner.

  WIC Program Personnel.  Based on our review of the personnel listing for the
Program's St. Thomas employees, we found that a carpenter performed maintenance
functions for the Department of Health but received full salary payments of $29,900 from
Federal funds designated for the WIC Program.  The carpenter received the salary
payments during fiscal year 1994 and the first two quarters of fiscal year 1995. We
classified this amount as a cost exception, since the employee performed maintenance
functions for the Department of Health and not exclusively for the WIC Program.

*As defined in the Code of Federal Regulations (7 CFR 246.2), a "competent professional authority" is a
physician, nutritionist, dietitian, registered nurse, physician's assistant, or a local medically trained health
official authorized to determine nutritional risk and prescribe supplemental foods.

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At our March 5, 1996, exit conference on the preliminary draft of this report, the Director
of the WIC Program said that the carpenter was transferred from the Department of
Health's Maintenance Division to the WIC Program to assist in the renovation of the state
agency and clinic buildings. When the carpenter's services were no longer needed on a
full-time basis, the Program requested that the carpenter be transferred back to the
Maintenance Division. However, the Maintenance Division did not have a budgeted
position for a carpenter at that time. Therefore, the carpenter remained on the Program
payroll pending identification of local funds but performed work for the Department of
Health. According to the Program's Office Manager, the employee was transferred to the
Department of Health for payroll purposes after the pay period ending July 22, 1995. We
believe that the portion of the carpenter's salary related to work that did not directly
benefit the WIC Program should be reimbursed to the WIC Program by the Department
of Health.

  Equipment Purchases.  The WIC Program incurred costs of approximately
$135,000 for equipment purchased during fiscal year 1994 and the first two quarters of
fiscal year 1995. Of this amount, we questioned the justification for five equipment
purchases, totaling about $110,000, as follows:

     -  A December 1993 purchase of $8,987 for computer terminals, keyboards, and
printers for Program clinics was made on the open market without any justification clause,
as required by the Virgin Islands Code.  According to the WIC Program's Office
Manager, the purchase was made to replace items that were no longer repairable, and the
particular vendor was used so that the new equipment would be compatible with existing
equipment. Although the open market purchase appears to have been justified, the
appropriate citation (Title 3 1, Section 239(a)(9), of the Virgin Islands Code) should have
been included in the purchase documents.

     -  A February 1994 open market purchase totaling $41,621 for office furniture and
equipment for the Mid-Island Clinic on St. Croix was justified on the basis of Title 31,
Section 239(a)(9), of the Virgin Islands Code. This citation allows open market purchases
that are "for equipment that is technical whose standardization and interchangeability of
whose parts are necessary in the public interest. " In our opinion, this justification was not
valid because the purchase was primarily for office furniture and equipment that was not
technical or that was not procured as additions to existing pieces.

  - Another February 1994 open market purchase totaling $11,781 for office
furniture for the main WIC Program office at the Knud Hansen Complex on St. Thomas
was justified on the basis of Title 31, Section 239(a)(6), of the Virgin Islands Code.  This
citation allows open market purchases for "medicine or medical, hospital, laboratory,
surgical equipment and supplies. " In our opinion, this justification did not apply to the
purchase of the office equipment.

     -  An August 1994 open market purchase totaling $23,977 for office furniture to
equip the Frederiksted Clinic was justified on the basis of Title 3 1, Section 239(a)(8), of

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the Virgin Islands Code. This citation allows open market purchases for "services for
which it is impracticable to obtain competition. " In our opinion, this justification was not
valid because other vendors, both on- and off-island, could have been found to provide
price quotations.

     -  An August 1994 purchase of $23,900 for a four-wheel-drive vehicle for use on
St. Croix was based on telephonic quotations obtained by WIC Program personnel from
two car dealers on St. Croix. Criteria contained in Title 31 of the Virgin Islands Code,
however, state that the Commissioner of Property and Procurement, not individual
agencies, will purchase all supplies and equipment and that purchases in excess of $5,000
will be based on written contracts or purchase orders.

In each of the cases cited, except for the purchase of the computer equipment, there was
no assurance that the WIC Program received the most favorable prices, terms, and
conditions because the purchases were made on the open market without valid justification.

  Catering Services. In July 1994, the WIC Program contracted with a catering
service to provide, for a total cost of $2,600, appetizers and punch for 400 people
attending the opening of the Mid-Island Clinic on St. Croix and the 20th anniversary of
the WIC Program in the Virgin Islands. Both events were to be celebrated jointly in
September 1994. We took exception to the $2,600 because U.S. Office of Management
and Budget Circular A-87, "Cost Principles for State and Local Governments," prohibits
the costs of social activities and any costs associated with such activities from being
charged to Federal grants.

At our March 5, 1996, exit conference, the Director of the WIC Program stated that the
open house was part of an extensive outreach program to maximize participation in the
WIC Program and that providing food was essential to the success of the outreach
program. However, we continue to believe that the catering service costs are unallowable
in accordance with Circular A-87. Therefore, these costs should have been paid from
local funds.

  Contract Execution Process. In fiscal year 1993, the Virgin Islands Department
of Health awarded a l-year contract to a company that processes food instruments to
obtain administrative processing services for WIC food instruments; to issue, review,
validate, pay, and/or reject all food instruments; and to provide monthly reports of all
Program activity.  The Government of the Virgin Islands, however, did not execute
contract extensions with this company in a timely manner.  This occurred because of a
lack of communication between personnel in the WIC Program, the Department of
Property and Procurement, and the Department of Justice. As a result, the contract
extension for fiscal year 1994 was not signed until August 26, 1994, 1 month before the
end of the fiscal year, and the contract extension for fiscal years 1995 and 1996 was not
signed until July 11, 1995, 1 112 months before the end of fiscal year 1995.

 
Although the Department of Property and Procurement prohibits contractors from
commencing operations before their contracts are fully executed, the company continued
to perform integral services during fiscal years 1994 and 1995 without signed contract
extensions. The WIC Program did not submit payment vouchers for fiscal years 1994 and
1995 until the contract extensions were signed. Our review of the company's contract file
showed that the company billed the WIC Program for fiscal years 1994 and 1995 on a
monthly basis before the contract extensions were signed. For example, the company
billed the WIC Program $29,966 for the period of October 1993 to July 1994, but the
fiscal year 1994 contract was not signed until August 26, 1994. Similarly, the company
billed the WIC Program $17,195 for the period of October 1994 to March 1995, but the
fiscal year 1995 contract was not signed until July 11, 1995. WIC Program personnel said
that delays in signing the contract extensions occurred at the Department of Justice and
that they did not know the reasons for the delays. In support of the statement, the WIC
Program's Office Manager provided us with a list of 20 telephone calls made to the
Department of Justice and the Governor's office from December 1993 through July 1994
concerning the fiscal year 1994 contract extension. We believe that this is an indication
of efforts by Program personnel to determine the status of the contract extension.

Verification of Participant Income

The WIC Program did not document whether participants had regular income contributions
from sources outside of their household unit. The WIC Program's Policy and Procedure
Manual section on certification and eligibility focused the verification of income on
household members. There was no reference to routine monetary contributions from
persons outside of the household. In contrast, the Code of Federal Regulations (7 CFR
246.7) contains 12 income sources, including alimony or child support payments and
regular contributions from persons not living in the household, in its definition of
" income. " We found that only one nutrition aide at the St. Thomas Hospital routinely
inquired about and documented income sources from outside of the applicant's household
unit.

In order to conform to the Code, we believe that the WIC Program's Policy and Procedure
Manual should be updated to require that the nutrition aides query applicants about income
contributions from sources outside of the household and document the results of the
inquiries.

Nutritional Risk and Food Package Determination

The WIC Program's nutrition aides documented applicant information for Program
acceptance, determined nutritional risk for low-risk applicants, and often prescribed the
supplemental food package. 3 The Code of Federal Regulations (7 CFR 246.2) states that

3As defined in the Code of Federal Regulations (7 CFR 246.2), "supplemental foods" are those foods
containing nutrients determined to be beneficial for pregnant, breastfeeding, and postpartum women and for
infants and children.

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a competent professional authority is the individual authorized to determine nutritional risk
and prescribe the supplemental food package.  However, even though they were not
classified as competent professional authorities, nutrition aides performed these tasks
because the WIC Program did not have an adequate number of nutritionists for full-time
on-site representation at each WIC Program clinic.

The WIC Program maintained seven clinic sites throughout the Virgin Islands, three each
on St. Croix and St. Thomas and one on St. John. On St. Croix, the Charles Harwood
Clinic's nutritionist was also the public health nutritionist and breastfeeding coordinator.
At the time of our review, the Frederiksted and Mid-Island Clinics had vacancies for
nutritionists, and the WIC Program's Office Manager said that it was anticipated that one
nutritionist would be hired to cover both locations. The St. Thomas Hospital Clinic's
nutritionist was also the senior public health nutritionist; the East End Clinic's nutritionist
was also the nutritionist for the St. John Clinic; and, at the time of our review, the Knud
Hansen Clinic's nutritionist position was vacant. According to the WIC Program's Office
Manager, it was anticipated that a part-time nutritionist would be hired to fill this vacancy.
Because there was an insufficient number of nutritionists to provide full-time on-site
representation at each clinic, participant files were not always reviewed by a nutritionist,
and there was no assurance that Program participants were properly evaluated as to
nutritional risk or that the prescribed supplemental food packages were appropriate. In
order to strengthen internal controls, we believe that the nutritional risk and food package
determinations should be reviewed and approved by a competent professional authority at
the time of the certification for eligibility.

Federal Grant Drawdowns

The WIC Program requested drawdowns from the U.S. Treasury for food costs and
administrative costs through the Virgin Islands Department of Finance.  The Cash
Management Improvement Act requires Federal funds to be drawn down on an as-needed
basis and the time between the transfer of funds and the disbursement of funds to be
minimized. However, the banks involved in the transfer process were in different
geographic locations, and the transfers were not coordinated between WIC Program
personnel, the Department of Finance, and the banks. Because of the lack of coordination,
during the first two quarters of fiscal year 1995, funds for food costs were not available
timely. As a result, the WIC Program incurred penalties of $614 for 28 overdrafts totaling
$908,000.

To obtain funds for food costs, the U.S. Treasury electronically transfers the drawdowns
for food costs and administration costs to the San Juan branch of Banco Popular de Puerto
Rico. The following day, the funds are recognized by Banco Popular's St. Thomas
branch. The WIC Program, through the Department of Finance, transfers the portion of
the funds related to food costs to the St. Thomas branch of Chase Manhattan Bank, which
in turn electronically transfers these funds to the First Tennessee Bank in Minnesota, the
stateside bank of the company that processes the Program's food instruments.

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Because of the delays in transferring the portion of the funds related to food costs to the
stateside bank of the company that processes the food instruments, the WIC Program made
three requests to the Department of Finance from October 1993 to February 1995 to
change the drawdown process. In effect, the WIC Program sought to remove Chase
Manhattan Bank from the drawdown process and to open a checking account at Banco
Popular's St. Thomas branch for the portion of the funds related to food costs.  These
changes would have allowed the WIC Program to manage grant drawdowns more
efficiently and to comply with the Cash Management Improvement Act. However, the
Department did not respond to these requests.

Recommendations

We recommend that the Governor of the Virgin Islands:

  1. Direct the WIC Program to provide documentation regarding the $29,900 in
questioned salary expenses and the $2,600 in questioned entertainment expenses to the
U.S. Department of Agriculture for final determination concerning the allowability of
these costs.

   2. Direct the WIC Program and the Department of Property and Procurement to
purchase equipment items in excess of $5,000 in accordance with Title 3 1, Chapter 23,
of the Virgin Islands Code.

   3. Direct the Department of Justice to establish procedures to ensure that contracts
and contract amendments for the WIC Program and other Governmental programs are
reviewed and processed in a timely manner.

   4. Direct the WIC Program to update its Policy and Procedure Manual to require
that nutrition aides query applicants about recurring monetary contributions from sources
outside the immediate household unit and document this information in the applicants' file.

  5. Direct the WIC Program to require that a competent professional authority
review and document approval of the nutritional risk assessments and food package
determinations made by nutrition aides at the time of applicants' certification.

   6. Direct the Department of Finance to remove Chase Manhattan Bank from the
drawdown process for the WIC Program's food funds and to open a checking account at
the St. Thomas branch of Banco Popular de Puerto Rico for the portion of the grant funds
related to food.

Governor of the Virgin Islands Response and Office of Inspector General

Reply

The August 14, 1996, response (Appendix 2) to the draft report from the Governor of the
Virgin Islands expressed nonconcurrence with Recommendation 1 and concurrence with

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Recommendations 2, 3, 4, and 6.  The response did not indicate concurrence or
nonconcurrence with Recommendation 5.  Based on the response, we consider
Recommendations 1 and 5 unresolved.  Also based on the response, we consider
Recommendations 2, 3, 4, and 6 resolved but not implemented and request additional
information for these recommendations (see Appendix 3).

General Comments on Response

The Governor's August 14, 1996, response to the draft report was essentially the same
response that the Department of Health provided to us at the March 5, 1996, exit
conference to discuss a preliminary version of this report.  As a result of the exit
conference and the initial response, we made revisions to the report. As such, some
finding sections and recommendations quoted in the Governor's response differ from the
ones actually contained in the issued draft report. We will address such discrepancies in
the detailed discussions of the Governor's response that follow.

Recommendation 1. Nonconcurrence,

  Governor of the Virgin Islands Response.  The response expressed
nonconcurrence and provided justifications for the $29,900 in questioned salary expenses
and the $2,600 in questioned entertainment expenses.

  Office of Inspector General Reply.  Although the response explains the
circumstances concerning the assignment of the carpenter to the WIC Program and states
that, during the same period, a Maintenance Division custodial worker was assigned full-
time to the WIC Program, we continue to believe that the portion of the carpenter's
$29,900 salary related to work performed for non-WIC programs is unallowable.  The
unallowable amount may be eligible for offset against the portion of the custodial worker's
$26,520 salary that is related to services performed by the worker for the WIC Program.
In the preliminary draft report, we recommended that the amount of unallowable costs be
refunded to the U.S. Department of Agriculture. However, because the U.S. Department
of Agriculture has the responsibility for determining allowability under its grant programs,
we revised the recommendation to state that the WIC Program should provide
documentation regarding the questioned costs to the U.S. Department of Agriculture for
final determination as to allowability.

With regard to the $2,600 in questioned expenses related to providing food and beverages
at WIC outreach programs, we continue to believe that those costs are unallowable in
accordance with Circular A-87. We believe that if the WIC Program wanted to provide
food and beverages to participants at outreach activities, the cost of those items should
have been paid from local funds.  In the final analysis, the determination as to the
allowability of the questioned costs is the responsibility of the grantor agency, the U.S.
Department of Agriculture. Therefore, we believe that the recommendation as revised is
still valid and consider it unresolved (see Appendix 3).

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E

Recommendation 2. Concurrence.

  Governor of the Virgin Islands Response. The response stated that the WIC
Program Director had previously advised Program staff, through a directive, that
"purchases in excess of $5,000 must be in accordance with applicable laws and regulations
as outlined in Title 31, Chapter 23 of the Virgin Islands Code." The response further
stated that the erroneous justification clauses discussed in the finding were inserted on the
invoices by the Department of Property and Procurement, not the WIC Program;
a 4-wheel-drive vehicle for the WIC Program was not purchased solely on the basis of
telephonic quotations; and all of the purchases in question were made, received, and
distributed by the Department of Property and Procurement.

  Office of Inspector General Reply. Although the response stated that the Program
Director had "previously advised" WIC staff of the procurement requirements, those
requirements were not always complied with.  Regarding the erroneous clauses, our
recommendation was addressed to both the WIC Program and the Department of Property
and Procurement in recognition of the agencies' joint responsibility for ensuring that
procurement activities are executed in accordance with applicable laws and regulations.
Regarding the vehicle, in a letter dated August 8, 1994, the Director of the WIC Program
requested the U.S. Department of Agriculture's approval of the purchase of the 4-wheel-
drive vehicle, stating that "we contacted several car dealerships requesting telephonic
bids, " that "only two responses were received, " and that "this information has been
provided to the Department of Property and Procurement." An attachment to the
Governor's response contained written price quotations provided to the WIC Program by
two car dealerships, apparently in confirmation of the telephonic quotations. This
documentation indicates that the WIC Program solicited the price quotations, made initial
arrangements with the car dealerships, and then submitted the procurement transaction to
the Department of Property and Procurement for approval and processing.  We believe
that these functions should be performed by personnel in the Department of Property and
Procurement to ensure that procurements are not directed by Program personnel to specific
vendors. However, based on information provided in the response, we consider the
recommendation resolved, but a copy of the directive issued by the WIC Program Director
is requested for us to classify the recommendation as implemented (see Appendix 3).

Recommendation 3. Concurrence.

  Governor of the Virgin Islands Response. The response stated that copies of the
amendment were sent to the contractor on July 30, 1993, in accordance with a 60-day
notification provision of the contract. In addition, according to the response, the WIC
Program staff made numerous calls, averaging one per week in some months, to the Virgin
Islands Department of Justice to follow up on the status of contract amendments.  The
response acknowledged that internal control weaknesses existed but stated that
Governmental agencies had taken steps to address the untimely processing of contract
amendments.

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  Office of Inspector General Reply. We believe that the reference in the response
to the contract amendment that was sent to the contractor on July 30, 1993, refers to an
unsigned copy of the proposed amendment. We have a copy of the fiscal year 1994
amendment that was not approved by the Governor until August 24, 1994, 1 month before
the end of fiscal year 1994. The information on follow-up calls made by the WIC
Program staff had been provided to us at the March 5, 1996, exit conference, and we
incorporated that information into the draft report and revised the recommendation
accordingly. We consider the recommendation resolved, but a copy of the directive issued
to formalize contract follow-up procedures is requested for us to classify the
recommendation as implemented (see Appendix 3).

Recommendation 4. Concurrence.

  Governor of the Virgin Islands Response. The response stated that the WIC
Program staff will revise Policy 2.04, "Income Eligibility Requirements," to include the
Code of Federal Regulations definition of "income." The response also stated that
"applicants are queried as to `gross household income"' and that "the signature of the WIC
staff member serves as an assurance that income was verified." Further, the response
stated that there were "serious concerns" regarding the statement in a preliminary draft of
our report regarding applicants whose applications were denied at the St. Thomas Hospital
and that an ADP system is in place to prevent such occurrences. In addition, the response
noted, "There will always be times when staff must use their judgment in determining
eligibility within the framework of these guidelines. "

  Office of Inspector General Reply. Although WIC Program personnel routinely
queried applicants as to their household income, income sources outside the immediate
household were not always taken into consideration because the definition of "income" in
the WIC Program Policy and Procedure Manual did not correspond with the definition
contained in the Code of Federal Regulations. We recognize that there may be times when
staff need to use their judgment when determining eligibility, but this latitude should be
exercised after all sources of income have been verified and documented. Regarding the
statement about denied applicants, we deleted this statement from the final report based
on the additional information provided. Based on information provided in the response,
we consider the recommendation resolved, but a copy of revised Policy 2.04 is requested
for us to classify the recommendation as implemented (see Appendix 3).

Recommendation 5. Concurrence or nonconcurrence not indicated.

  Government of the Virgin Islands Response. The response quoted a portion of
Section 2 of the WIC Program Policy and Procedure Manual, which defines a "Competent
Professional Authority" for nutrition determination purposes. The response also stated that
the Manual:

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. . . includes a "locally" medically trained health official as a "Competent
Professional Authority." . . . Our staff has been trained to certify and assign a
food package to our low risk applicants;

Also an Anthropometric Manual, Clinic Manual, Lesson Plan Manual are but
a few teaching aides prepared for their guidance. . . .

Training of our Nutrition Aides is an on-going process. A two-day training in
Nutrition Counseling and Breast-feeding Promotion has been scheduled for
March 14-15, 1996.

The response further stated that the Government's "ADP system is also programmed so that
only a Nutritionist can customize a food package." Finally, the response detailed the
circumstances related to the Department's difficulty in recruiting nutritionists.

  Office of Inspector General Reply.  Although we acknowledge that the
Department's nutrition aides have received some on-the-job training on nutrition-related
subjects, we do not believe that the level of training received by the nutrition aides meets the
requirements of Title 7, Section 246.2, of the Code of Federal Regulations to be considered
a "Competent Professional Authority" authorized to "determine nutritional risk and prescribe
supplemental foods." As stated in the Code, Competent Professional Authorities include:

Physicians, nutritionists (bachelor's or master's degree in Nutritional Sciences,
Community Nutrition, Clinical Nutrition, Dietetics, Public Health Nutrition or
Home Economics with emphasis in Nutrition), dietitians, registered nurses,
physician's assistants (certified by the National Committee on Certification of
Physician's Assistants or certified by the State medical certifying authority), or
State or local medically trained health officials.

The Code further requires these individuals to have a high level of formal medical training,
including a bachelor's or a master's degree or certification by a state medical board. Based
on these requirements, we do not believe that 2 days of training are sufficient to attain the
level of medical training required by the Code. Additionally, we believe that the phrase
"State or local medically trained health officials" refers to "locally medicallv trained health
officials" rather than to "State or local [government] medicallv trained health officials," as
indicated in the response. (Emphasis added.)

Further, the response acknowledges that the Department does not have sufficient nutritionists
and has had difficulty in recruiting qualified individuals to fill those positions. Until the
Department can hire additional nutritionists, we believe that the Department should require
that supplemental food package determinations made by its nutrition aides be reviewed and
approved by a properly trained nutritionist (see Appendix 3).

13

 
Recommendation 6. Concurrence.

  Government of the Virgin Islands Response. The response stated that WIC
Program staff had drafted a request for proposals for local banking services and that a
copy of the request for proposals was submitted to the U.S. Department of Agriculture for
review and comment before it was transmitted to the Department of Property and
Procurement for issuance. In addition, WIC staff developed an interim policy to ensure
that funds are drawn in a timely manner in an attempt to eliminate the occurrence of
overdrafts and charges.

  Office of Inspector General Reply. Based on the information provided in the
response, we consider the recommendation resolved, but documentation showing that local
banking services have been acquired for the processing of drawdowns related to food
instruments is requested for us to consider the recommendation implemented (see
Appendix 3).

The Inspector General Act, U.S. Public Law 95-452, Section 5(a)(3), as amended,
requires semiannual reporting to the U.S. Congress on all audit reports issued, the
monetary impact of audit findings (Appendix l), actions taken to implement audit
recommendations, and identification of each significant recommendation on which
corrective action has not been taken.

In view of the above, please provide a response, as required by Public Law 97-357, to this
report by May 23, 1997, to our Caribbean Regional Office, Federal Building - Room 207,
Charlotte Amalie, Virgin Islands 00802. The response should provide the information
requested in Appendix 3.

We appreciate the assistance of Department of Health personnel in the conduct of our
audit.

Inspector General

14

 
APPENDIX 1

CLASSIFICATION OF MONETARY AMOUNTS

Finding Area

Questioned
Costs

Program Administration

WIC Program Personnel

$29,900

Catering Services                    2.600

Total

$32.500

15

 
THE UNITED STATES VIRGIN ISLANDS

OFFICE OF THE GOVERNOR
  GOVERNMENT HOUSE
Charlotte Amalie. V.I. 00802
  809-774-0001

August 14,1996

Ms. Wilma A. Lewis, Esquire
Inspector General
United States Department of the Interior
Office of Inspector General
1550 Wilson Boulevard
Arlington, VA 22209

APPENDIX 2
Page 1 of 14

'1

Re:

Audit Report - Special Supplemental Nutrition Program
for Women, Infants and Children, Department of Health,
Government of the Virgin Islands (No. V-IN-VIS-005-95)

Dear Ms. Lewis:

  We have thoroughly reviewed your Draft Report No. V-IN-VIS-005-95, on the Special
Supplemental Nutrition Program for Women, Infants and Children, Department of Health,
Government of the Virgin Islands and submit the following responses prepared by Department heads
responsible for those areas:

I.   INTRODUCTION

  The stated objective of the review of the Special Supplemental Nutrition Program for
Women, Infants and Children administered by the Department of Health was to determine whether:

1.

The Department of Health complied with grant terms and applicable laws and
regulations; and

3 -.  Procedures were adequate to ensure that only eligible applicants received
  assistance.

16

 
APPENDIX 2
Page 2 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

  During fiscal year 1994 and the first two quarters of fiscal year 1995, the Program's average
monthly participation was:

Women     1,176
Infants      1,561
Children     4.783

Total

7,520

(See Attachment No. 1 for actual participation for fiscal year 1994 and fiscal year 1995)

  Grant authorization for fiscal years 1994 and 1995 totaled $11.7 million. These amounts
provided $8.7 million for food costs and $3 million for administrative costs. In addition, the WIC
Program also received lnfant Formula Rebates of $1,958,750 for fiscal years 1994 and 1995. This
was quite an accomplishment for the program.

II.  RESULTS OF SURVEY

  The Department of Health administered the WIC Program in an effective manner and in
compliance with grant terms and applicable laws and regulations. Over the last 5 years, the WIC
Program has worked closely with representatives of the U.S. Department of Agriculture's Food and
Consumer Service to bring the Program into compliance with Federal regulations. As a result,
Federal financial reports have been submitted in a timely manner, time studies to support nutrition
education activities and breast-feeding support activities have been developed, a computer system
has been implemented. and Program participation is approaching the maximum level. However, our
review showed that Program administration over an already successful Program could be further
improved by the following: (1) ensuring that administrative funds are expended in accordance with
established criteria and used exclusively for WIC Program activities; (2) requiring Program
personnel to query applicants and document the results for income contributions from persons
outside the household; (3) requiring a Competent Professional Authority to review and approve the
nutritional risk assessment and food package determination at the time of certification; and (4)
updating the drawdown process for the food portion of the grant funds.

III.  PRIOR AUDIT COVERAGE

  The Office of Inspector General has not performed any prior audits of the WIC Program.
However, the United States Department of Agriculture - Food and Consumer Service - Middle
Atlantic Region and Caribbean Area Office conducted reviews during the period 1989 to 1994.

2

17

 
APPENDIX 2
Page 3 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

Results of these reviews are:

   April 1989 - the U.S. Department of Agriculture's Office of Inspector General issued the
report "Survey of the Special Supplemental *Nutrition Program for Women, Infants and Children
in the U.S. Virgin Islands". The report concluded that the WIC Program needed to strengthen its
management of and controls over Program operations. Weaknesses were identified in the following
areas: (1) the one-to-one reconciliation of food instruments, (2) vendor authorization and monitoring,
(3) Program integrity, (4) financial management operations, (5) procurement of WIC services,
(6) certification operations, and (7) general internal controls.

   June 1991 - the U.S. Department of Agriculture's *Food and Consumer Service issued a
report on its financial review of food and administrative costs for the Virgin Islands WIC Program.
The report concluded that the Program needed to improve its ability to (1) manage its food fund cash
flow, (2) routinely determine the status of administrative outlays, (3) submit Federal reports in a
timely manner, and (4) increase the WIC monthly participation level.

   During the period November 1991 to December 1994, the U.S. Department of Agriculture's
*Food and Consumer Service issued four State Technical Assistance Review reports. The
November 199 1 report concluded that the Virgin Islands WIC Program devoted an extensive amount
of time to vendor monitoring but did not spend an appropriate amount of time on other vendor
management functions. The January 1993 report concluded that the Program needed to monitor
participation levels, expenditures, and rebates on a monthly basis and to make adjustments to
budgeted data in order to reach as many potentially eligible participants as possible. The December
1993 report concluded that the Program developed appropriate policies and procedures in nutrition
services. And the December 1994 report concluded that the Program developed appropriate policies
and procedures for the areas reviewed and that the vendor management section had significantly
improved its operations.

* PL 103-448 of 1994 changed:

Special Supplemental &d Program
Food & Nutrition Services

20    Special Supplemental Nutrition Program
to     Food & Consumer Services

3

18

 
APPENDIX 2
Page 4 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

SURVEY REPORT RECOMMENDATIONS AND RESPONSES

Recommendation No. 1

Direct the WIC Program to refund the $29,900 in unallowable salary costs and the $2,600 in
unallowable costs to the United States Department of Agriculture.

Response No. 1

Do not concur. Please refer to page 7 for reasons for nonconcurrence.

Recommendation No. 2

Direct the WIC Program and the Department of Property and Procurement to purchase equipment
items in excess of $5,000 in accordance with applicable laws and regulations as outlined in Title 3 1,
Chapter 23 of the Virgin Islands Code.

Response No. 2

Concur with recommendations. Directive to administrative staff by Program
Director effective fiscal year 1996. (See excerpts from local newspaper of
Tuesday, February 20,1996 and February 25,1996 noted as Attachment
No. 2 and No. 3 as examples of compliance.

Recommendation No. 3

Direct the WIC Program to regularly follow-up on the status of contracts and contract amendments
for services needed by the WIC Program and coordinate with processing agencies in order to
minimize delays in the execution of such contracts and contract amendments.

Response No. 3

Concur with recommendation. See comments on page 10.

Recommendation No. 4

Direct the WIC Program to update its Policy and Procedure Manual to require that Nutrition Aides
query applicants about monetary contributions from sources outside the immediate household unit
and document this information in the applicant's file.

4

19

 
APPENDIX 2
Page 5 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

Response No. 4

Concur with recommendation.

WIC staff has agreed to revise Policy 2.04 - Income Eligibility Requirements to
include CFR delinition of Income. However, there will always be times when
staff must use their judgment in determining eligibility within the framework
of these guidelines. Please refer to page 11 for additional comments.

Recommendation No. 5

Direct the WIC Program to require that a competent Professional review and document approval of
the nutritional risk assessments and food package determinations made by Nutrition Aides at the
time of applicant's certification.

Response No. 5

Section 2 of the V.I. WIC Policy & Procedure Manual states:

2.

The following persons are authorized to serve as a Competent
Professional Authority:

The State established qualifications for the local WIC Nutritionist
providing high-risk counseling to include at a minimum:

Master's degree from an accredited university with an
emphasis in any of the following: food and nutrition,
community nutrition, public health nutrition, nutrition
education, human nutrition, nutritional science, or their
equivalents;
Registration with the American Dietetic Association
(Registered Dietitian [R.D.]) or eligible for registration
Physicians
Registered Nurses
Physician's Assistants
State or "lo&" medically trained health officials

5

20

 
APPENDIX 2
Page 6 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

Recommendation No. 6

Direct the Department of Finance to remove Chase Manhattan Bank from the drawdown process for
the WIC Program's food funds and to open a checking account at Banco Popular de Puerto Rico -
St. Thomas branch for the food portion of grant funds.

Response No. 6

Concur.

WIG Program staff recently drafted a request for proposal for banking services
from local banking institutions. In accordance with regulations, a copy of the
RFP was forwarded to USDA-MAR0 and Caribbean Area Office for their
review and comments prior to transmittal to the Department of Property and
Procurement.

It is our hope that the local banks now have the capabilities and are willing to
process our food instruments which would eliminate having to transfer food
funds to a stateside bank and also eliminate the occurrence of overdrafts and
charges.

6

21

 
APPENDIX 2
Page 7 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

PROGRAM ADMINISTRATION

ADDITIONAL COMMENTS

WIC Personnel

Finding Summary No. 1

Identified minor internal control weakness related to Program personnel resulting in a custodial
employee being paid $29,900 from WIC funds although the employee performed duties for other
units of the Department of Health.

Response - Finding Summary No. 1

The employee referred to in this section was transferred to the WIC Program
subsequent to our request to assist in the renovation of the State Agency and
clinic building. This employee is a Carpenter - not a Custodial Worker as
reported. (See attachment No. 4 - Notice of Personnel Action.)

It later became evident that the WIC Program had no further need for the
services of a full-time carpenter and requested his transfer back to the
Department of Health, Maintenance Division. The Maintenance Division, while
agreeing to the transfer, did not have a budget position at the time. Rather than
make salary payments to this employee who did little, if anything, the employee
was transferred to the Maintenance Divisions and remained on WIG's payroll
pending the identification of local funds.

Note that during this same period, the Maintenance Division assigned a full time
Custodial Worker to the WIC Program (See Attachment No. 6)

We are therefore recommending that this employee's salary in the amount of
$26,520 be used to offset that portion of the Carpenter's salary.

Equipment Purchases:

Finding Summary No. 2

Five equipment purchases, totaling $110,000 were made on the open market and in some cases, open
market justification clauses inserted on the invoices by the Department of Property & Procurement
were not correct; Therefore, there was no assurance that the WIC Program received the most
favorable prices, terms and conditions.

7

22

 
APPENDIX 2
Page 8 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

Response - Finding Summary No. 2

Let me preface my response by stating that WIC Program staff had been
previously advised that purchases in excess of $5,000 must be in accordance
with applicable laws and regulations as outlined in Title 31, Chapter 23 of the
Virgin Islands Code and staff has adhered to this directive.

As noted, all five purchases were made through the Department of Property and
Procurement and the erroneous clauses inserted on the invoices were done by
the Department of Property and Procurement - not the WIC Program; and,
when the open market purchase appeared to have been justified, the
appropriate citation was missing.

It has become apparent that the governmental procurement process has been
streamlined and it is no longer necessary to contact a vendor directly in order
to expedite the process and utilize your funds before the end of the fiscal year.

Finally, in order to correct the record: The four-wheel drive vehicle for use on
St. Croix (which was a life saver during the recent storms) was not purchased
based solely on telephonic quotations.

Moreover, once again, the purchase was made by the Department of Property
& Procurement, received by Property and Procurement and delivered to the
WIC Program by representatives of the Department of Property &
Procurement.

Catering Service

Finding Summary No. 3

WIC Program contracted with a catering service to provide appetizers and punch for the opening of
the Mid-island Clinic and the 20th Anniversary celebration of the WIC Program in the Virgin Islands

Response - Finding Summary No. 3

One of the problems noted in several previous reviews was the need of the WIC
Program to increase the monthly participation level. A three prong approach
was agreed upon.

8

23

 
APPENDIX 2
Page 9 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

1.

Implement a Case Manager initiative which provided for the equitable
distribution of caseload allocation, created a bond between the client
and the care-giver and empowered staff members.

2.

Establish a mid-island clinic to replace the clinic damaged by Hurricane
Hugo; and, remove the barrier to participation for approximately 1,000
of our citizens who reside mid-island.

3.  Conduct an intensive outreach in order to maximize our enrollment.

Also, it was decided that an Open House would afford the community an
opportunity to visit our clinic, find out what we do, how we do it and, at the
same time, celebrate twenty years of success in the territory.

Representatives from MCH, MAP, Family Planning and other Department of
Health programs were invited. Also, representatives from Department of
Human Services, members of the clergy, members of the Legislature, and
representatives from institutions that house the homeless.

Our initiative proved successful, as is evident from the increase in caseload. The
$2,600 spent resulted in an increase of 784 clients and secured $140,000 of
federal funds. (See Attachment No. 5) Had there not been appetizers and
punch, my people would not have responded as they did.

From a cultural stand point, events such as the opening of a new clinic, dictates
that food is essential to the success of the event. Expectations are that an event
sponsored by Nutritionists would provide healthy, yet tasty, snacks. Some WIC
food items were selected with these factors in mind. For example: WIC juices,
eggs, tuna fish and carrots were some of the ingredients used.

It is our position that the snacks provided were not "entertainment", but
essential to the success of our outreach effort. Judging from the turnout at the
event, the increase in caseload, the increase in funding for the subsequent fiscal
year and the receipt of an additional 2-year grant to establish another clinic, our
assumptions were sound.

9

24

 
APPENDIX 2
Page 10 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

Contract Execution Process

Finding Summary No. 4

The Government of the Virgin Islands did not execute contract amendments with Gelco Payment
Systems in a timely manner. Internal control weaknesses over the execution of the contract's
amendment occurred because of a lack of communication between the WIC Program, the
Department of Property & Procurement and the Department of Justice. As a result, the fiscal year
1994 contract amendment was not signed until August 26, 1994.

Response - Finding Summary No. 4

The WIC Program, decided to exercise its option to extend a contract with
Gelco Payment Systems for the period October 01,1993 through September 30,
1994 when a new administration assumed management of the WIC Program.

The initial contact was on July 02,1993; and, on July 30, 1993, copies of the
amendment were forwarded to Gelco in accordance with the contract that we
notify the contractor of our intent no later than sixty (60) days prior to the
expiration date of the contract.

We agree that internal control weaknesses did exist; However, steps have been
taken by all government agencies involved to improve on these weaknesses and
to make the process more efficient.

Our records indicate that during some months, WIC staff calls averaged one per
week.

Verification of Participation Income

Finding Summary No. 5

1.

The WIC Program did not document whether participants had regular income
contributions from sources outside of their household unit.

2.

Because the WIC Program did not include a requirement to query WIC Program
participants for contributions from persons outside the household, there was no
assurance that all income sources were identified at the time of certification.

3.  Review showed that only one Nutrition Aide routinely inquired and documented

10

25

 
APPENDIX 2
Page 11 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

income sources from outside of the applicant's household unit. As a result,
applicants often applied at other WIC clinic sites after being denied acceptance at the
St. Thomas Hospital Clinic.

Response - Finding Summary No. 5

The State Agency will revise Policy 2.04 to include the definition of "income" as
stated in the Code of Federal Regulations. However, applicants are queried as
to "gross household income" and the document(s) used by WIC staff to verify
this information must be entered in the client's file if the applicant is not
adjunctively eligible.

The signature of the WIC staff member serves as an assurance that income was
verified. It is our opinion that income determination will sometime involve
subjective judgments and decision-making on the part of our clinic staff.

We have very serious concerns about your comment that applicants who were
denied application at the St. Thomas Hospital often applied at other WIC clinic
sites.

In accordance with application procedures - all applicants must be registered
and an identification number assigned.  ADP system will indicate
"Create/Update Patient Record". The ADP system will indicate whether the
participant is already in the system. This system is in place to prevent such an
occurrence.

Nutrition Risk 8z Food Package Determination

Finding Summary No. 6

The WIC Program's Nutrition Aides documented applicant information for Program acceptance,
determined nutritional risk and often prescribed the supplemental food package. However, the Code
of Federal Regulations requires that a Competent Professional Authority determine nutritional risk
and prescribe the supplemental food package. A "Competent Professional Authority" is a physician,
nutritionist, dietitian, registered nurse, physician's assistant or a locally medically trained health
official.

As a result, there was no assurance that Program participants were properly diagnosed as to
nutritional risk or that the prescribed food packages were adequate.

11

26

 
APPENDIX 2
Page 12 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

The WIC Program did not have an adequate number of Nutritionists for full-time on site
representation at each WIC clinic.

On St. Croix, the Charles Harwood Clinic's Nutritionist was also the Public Health Nutritionist
and Breastfeeding Coordinator.

The Frederiksted and Mid-Island clinics had Nutritionist vacancies.

On St. Thomas, the St. Thomas Hospital Clinic's Nutritionist was also the Senior Public Health
Nutritionist.

The East End Clinic's Nutritionist was also the Nutritionist for the St. John Clinic.

At the time of our review, the Knud Hansen Clinic's Nutritionist position was vacant.

The nutritional risk and food package determination should be reviewed and approved by a
Competent Professional Authority at the time of certification.

Response - Finding Summary No. 6

The V.I. WIC Program's Policy and Procedure manual includes a "locally"
medically trained health official as a "Competent Professional Authority".
(Your report did not include the term "locally". We have attached a copy of the
outline. Our staff has been trained to certify and assign a food package to our
low risk applicants;

Also an Anthropometric Manual, Clinic Manual, Lesson Plan Manual are but
a few teaching aides prepared for their guidance.

Because of our coordination with other Health Department programs and
private physicians, most medical risks are predetermined. (See attached Medical
Referral form.)

Our clinic staff is also given guidance in the determination of a high risk client
and a procedure has been established for the referral of these clients. Our ADP
system is also programmed so that only a Nutritionist can customize a food
package.

The problem of not having an adequate number of full-time Nutritionists is not
a problem unique to the Virgin Islands. The National Association of WIC
Directors and the WIC Community across the nation, recognizing the difficulty

12

27

 
APPENDIX 2
Page 13 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

in recruiting and retaining Nutritionists, have been working with colleges and
universities and professional organizations to address the problem.

Part of the problem here in the territory is the high cost of living, low salaries
and identifying staff qualified to serve our multi-cultural community.

As is the case in most small State Agencies, a fact of life is, we are all required
to maximize the resources available and wear many different hats in order to
accomplish our objectives.

The position title of Public Health Nutritionist and Senior Public Health
Nutritionist are not equivalent to the "duties performed" by the individuals now
in those positions. All of our Nutritionists are full-time WIC employees.

On St. Croix, the Charles Harwood Clinic Nutritionist provides technical
assistance to the Frederiksted Clinic and serves as the Breast-feeding
Coordinator.

We are in the process of recruiting a Nutritionist for the Mid-Island Clinic when
it re-opens.

The East End Clinic Nutritionist provides service, one day per week, to the
clinic on St. John that serves a caseload of 250 clients.

Training of our Nutrition Aides is an on-going process. A two-day training in
Nutrition Counseling and Breast-feeding Promotion has been scheduled for
March 14-15,1996.

Federal Grant Drawdowns

Finding Summary No. 7

The WIC Program requested drawdowns from the U.S. Treasury for food and administrative costs
through the Virgin Islands Department of Finance. Our review showed that the drawdown process
for food funds was cumbersome and often resulted in overdrafts. Based on the Cash Management
Improvement Act, federal funds must be drawn on an as needed basis and the time between the
transfer of funds and the disbursement of funds must be minimized.

Internal control weakness occurred because of a lack of coordination between WIC Program
personnel, the Department of Finance and the banks. As a result, overdrafts routinely occurred.

13

28

 
APPENDIX 2
Page 14 of 14

Letter to Wilma A. Lewis, Esquire
Inspector General

Response - Finding Summary No. 7

In an attempt to eliminate the occurrence of overdrafts and charges, after
several meetings with staff of the Department of Finance - Treasury Division
and WIC Program representatives, WIC staff developed an interim policy to
ensure that funds are drawn in a timely manner until such time as the
Department of Finance is in compliance with the terms and conditions of the
Cash Management Improvement Act.

  It is my hope that our responses to your recommendations will clarify all issues regarding
this audit.

  If you should require any additional information regarding any section of this audit,
please feel free to contact my office.

Attachments

[Attachments not included by Office of Inspector General.]

14


29

 
APPENDIX 3

STATUS OF SURVEY REPORT RECOMMENDATIONS

Finding/Recommendation
  Reference
    1

    2

Status
Unresolved.

Resolved; not
implemented.

4

Resolved; not
implemented.

Resolved; not
implemented.

Unresolved.

Resolved; not
implemented.

Action Required

Provide a response to the revised
recommendation.

Provide a copy of the directive
issued by the WIC Program
Director regarding compliance with
competitive procurement
requirements.

Provide a copy of the policy
directive to formalize procedures to
follow up on the status of contracts
issued for services required by the
WIC Program.

Provide a copy of revised Policy
2.04, "Income Eligibility
Requirements. "

Reconsider the recommendation,
and provide an action plan that
includes target dates and titles .of
officials responsible for
implementation.

Provide documentation showing that
local banking services have been
acquired for drawdowns related to
food instruments.

30

 
ILLEGAL OR WASTEFUL ACTIVITIES
   SHOULD BE REPORTED TO
THE OFFICE OF INSPECTOR GENE= BY:

Sending written documents to:            Calling:

Within the Continental United States

U.S. Department of the Interior
Office of Inspector General
1849 C Street, N.W.
Mail Stop 5341
Washington, D.C. 20240

Our 24-hour
Telephone HOTLINE
l-800-424-5081 or
(202) 208-5300

TDD for hearing impaired
(202) 208-2420 or
l-800-354-0996

Outside the Continental United States

Caribbean Region

U.S. Department of the Interior
Office of Inspector General
Eastern Division - Investigations
1550 Wilson Boulevard
Suite 410
Arlington, Virginia 22209

(703) 235-9221

North Pacific Region

U.S. Department of the Interior
Office of Inspector General
North Pacific Region
238 Archbishop F.C. Flores Street
Suite 807, PDN Building
Agana, Guam 96910

(700) 550-7428 or
COMM 9-011-671-472-7279

 
,  i

:  Toll Free Numbers:
a
:   l-800-424-5081
: .   TDD l-800-354-0996
: *
i  FTS/Commercial Numbers:
  (202) 208-5300
m I   TDD (202) 208-2420

a
:  1849 C Street, N.W.      E
rl  Mail Stop 5341        c
Washington, D.C. 20240