[Survey Report on Sewage System User Fees, Government of the Virgin Islands]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 98-I-263

Title: Survey Report on Sewage System User Fees, Government of
       the Virgin Islands

Date: February 20, 1998


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V-IN-VIS-001-97

United States Department of the Interior

OFFICE OF INSPECTOR GENERAL
    Washington, DC. 20240

SURVEY REPORT

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

Subject: Survey Report on Sewage System User Fees, Government of the Virgin
Islands (No. 98-I-263)

Dear Governor Schneider:

This report presents the results of our survey of sewage system user fees administered by the
Government of the Virgin Islands. The objective of the review was to determine whether
(1) bills for collection were issued timely and accurately, (2) accounts receivable records were
accurate, and (3) collection efforts were effective.

BACKGROUND

Although the Virgin Islands Department of Public Works has primary responsibility for the
operation of the public sewage system, billing and collection responsibilities are divided
among the Department of Public Works, the Office of the Tax Assessor, and the Department
of Finance. Title 3, Section 138, of the Virgin Islands Code states that Public Works "shall
repair, maintain, operate, and administer the sewage disposal system, and recommend to the
Governor . . . the amounts of fees to be charged for its use." Accordingly, Public Works

accepts applications and connects new users to the sewage system and determines the
appropriate user fees. Title 33, Section 2402, of the Code states that the Tax Assessor "shall
annually assess each owner of property which contains sanitary or other facilities connected
to the public sewer system" in accordance with fees established by Public Works. The Tax
Assessor assesses the sewage system user fees by including the appropriate amounts on
annual real property tax bills. Finance is responsible for collecting amounts owed on real
property tax bills, including the portion related to sewage system user fees. Additionally. /
Title 33, Section 2494, of the Code states that Finance "shall collect an additional sum of one
and one half percent (1 l/2%) of the amount due for each month or fraction thereof for which
the [real property] taxes and public sewer system user fees are delinquent."

Although the legal authorization to charge sewage system user fees became effective in July
1977, the current fee system was not implemented until late 1988 as a condition for the
Government's receipt of U.S. Environmental Protection Agency grants for construction of

 
wastewater treatment facilities.
Additionally, applicants for connection to the sewage system must pay an application fee of
$7.50 and a connection fee of either $10 (for 4-inch pipe) or $12.50 (for 6-inch pipe) per
linear foot of pipe used to make the connection. Title 19, Section 1534, of the Virgin Islands
Code states that Public Works "shall review waste water treatment costs biennially and may
revise user fee regulations appropriately." Sewage system user fee collections are deposited,
together with real property taxes collections, into the Government's General Fund and are to
be periodically transferred to the Sewer Waste Water Fund, which was established in 1989
to receive fees and other revenues for the operation and maintenance of the sewage system.

As of May 1997, the district of St. Thomas/St. John had 10,381 sewage system users, and the
district of St. Croix had 6,440 users. Revenue summaries prepared by the Department of
Finance indicate that sewage system user fee collections totaled $1.1 million for fiscal year
1993, $658,055 for fiscal year 1994, $951,575 for fiscal year 1995, and $301,368 for fiscal
year 1996. The fluctuations from one year to another were the result of the timing of issuance
of real property tax bills. For example, the Department of Finance postponed the issuance
of real property tax bills payable during 1996 because Hurricane Marilyn (September 1995)
had an adverse financial impact on taxpayers. Since the sewage system user fees are included

on these bills, there was a significant decrease in revenues for fiscal year 1996. For the 4-year
period of 1993 to 1996, sewage system user fee collections averaged about $800,000.

SCOPE OF SURVEY

The scope of the survey included sewage system user fee billings issued and collections made
during fiscal years 1988 through 1996 and operating procedures in effect at the time of the
review. The survey was performed at the offices of the Department of Public Works on
St. Thomas and St. Croix and at the Office of the Tax Assessor and the Department of
Finance on St. Thomas. In addition, we visited two sewage treatment plants and the o&es
of one privately owned septic hauler.

Our review was made, as applicable, 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 systems of internal controls at the Department of
Public Works, the Office of the Tax Assessor, and the Department of Finance related to the
billing and collection of sewage system user fees. The weaknesses we 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.

                               For example, a billing
unit can consist of a single family dwelling, each room in a hotel, every 10 seats in a restaurant, or
every 30
occupants of an offke building.

2

 
PRIOR AUDIT COVERAGE

The Office of Inspector General has not issued any audit reports on sewage system user fees
during the past 5 years. However, the September 1988 report "Review of the Sewage System
Fee Program, Government of the Virgin Islands" (No. 88-l 18) concluded that, through fiscal
year 1987, the Government had not implemented a program to bill customers and collect fees
for use of the public sewage system. Therefore, according to the report, the Government had
not recovered about $2.6 million in operating costs for fiscal years 1986 and 1987 and was
in jeopardy of losing about $1.3 million in U.S. Environmental Protection Agency grants for
the construction of wastewater treatment facilities.  Our current review disclosed that,
although the prior audit recommendations were implemented, further corrective actions are
needed.

In April 1995, the Jacksonville District of the U.S. Army Corps of Engineers issued the report
"Market Feasibility Study, Mangrove Lagoon/Turpentine Run Regional Wastewater
Treatment Plant, Government of the Virgin Islands." With regard to sewage system user fees,
the report recommended that the Government modify the sewage assessment fee structure
to more accurately reflect the cost of service and increase the per unit sewage assessment fee
by $25 (to $75). These recommendations had not been implemented at the time of our
current review.

RESULTS OF SURVEY

The Government did not adequately administer the sewage system user fee program.
Specifically, we found that (1) Public Works did not ensure that the fee schedule reflected the
actual cost of operating the sewage system, that new users paid the appropriate connection
fees, and that all sewage system users were included in the master file for billing purposes; (2)
the Tax Assessor did not adequately coordinate with Public Works to ensure that sewage fees
were accurately recorded on real property tax bills; and (3) Finance did not ensure that an
accurate accounts receivable listing was maintained, that payments were received from all
users, and that sewage system fee collections were properly accounted for. The laws related
to the operation of the public sewage system and the administration of sewage system user
fees are contained in the Virgin Islands Code (Title 3, Chapter 9; Title 19, Chapter 55; and
Title 33, Chapter 111). Internal operating procedures of the Department of Public Works
contain additional guidelines for the operation of the sewage system, and Section 3 10 of the
Department of Finance Accounting Manual contains guidelines for the collection of revenues.
However, the deficiencies existed because (1) Public Works did not develop and implement
comprehensive policies and procedures for its areas of responsibility; (2) Public Works, the
Tax Assessor, and Finance did not coordinate their fee activities; and (3) Finance did not
aggressively enforce the collection of delinquent sewage user fees. As a result, billing errors
totaled at least $147,667, and 1,434 delinquent users owed a total of $349,545 in fees.
Additionally, increasing the per unit user fee by $25, as recommended by the Corps of
Engineers, would increase annual revenues by at least $400,000.

3

 
Reevaluation of User Fee Structure

Title 19, Section 1534, of the Virgin Islands Code requires Public Works to perform biennial
reviews of the cost of operating the sewage treatment system and adjust the sewage system
user fees accordingly. However, the same per unit fee has been in effect since 1988. A
market feasibility study performed by the U.S. Army Corps of Engineers in 1995
recommended that the Government modify the sewage system user fee to more accurately
reflect the cost of service and specifically recommended that the annual per unit fee be
increased from the current $50 to $75. Public Works internal policy documents state that the
$50 fee was based on operating costs during fiscal years 1986 and 1987, but Public Works
officials did not provide any specific reasons why the recommended fee increase had not been
implemented. We determined that the $25 increase in the annual per unit user fee would
generate a 50 percent increase (at least $400,000) in annual revenues (fee collections
averaged $800,000 during fiscal years 1993 to 1996) available for the operation and upgrade
of the sewage system.

Connection of New Users

Title 19, Section 1536, of the Virgin Islands Code establishes a connection fee of $10 (for
4-&h pipe) or $12.50 (for 6-inch pipe) for each linear foot of pipe used to connect new users
to the public sewage system. Additionally, a $7.50 application fee is to be paid before a new
connection is approved. However, these fees were not always collected and the Tax Assessor
was not always notified of new users who should be added to the master file used for billing
purposes because Public Works had not implemented comprehensive procedures for
processing applications for connection to the sewage system.

We reviewed the files for the 38 new connections performed on St. Thomas from
January 1996 to March 1997 and found that 8 of the 38 files did not contain documents to
show whether the related application and/or connection fees had been paid; 5 of the 38 files
did not indicate whether the sewage system connections had been completed; and only 7 of
the 38 files contained the new users' real property tax identification numbers, which would
have been required to place the new users on the master file for billing purposes.

On St. Croix, 81 new connections were performed from November 1994 to May 1997. Of
these, only 25 files contained documents to show that the appropriate application and
connection fees had been paid.

We also found that the Public Works offices on St. Thomas and St. Croix had different
operating procedures. Specifically, the St. Croix office (1) used a dual application form to
be filled out by the owner and the plumber, (2) required that the $7.50 application fee be paid
before the application was approved, (3) completed a separate form to record the cost of the
sewage system connection, and (4) periodically submitted a list of new connections to the Tax
Assessor.  At the time of our review, none of these procedures were followed by the
St. Thomas office. However, subsequent to our review, forms and procedures used in the
St. Croix office were implemented by Public Works officials at the St. Thomas office.

 
As a result of these deficiencies, there was little assurance that all applicants paid the required
application and connection fees or were added to the master file which the Tax Assessor used
to make annual assessments of the sewage system user fees. We could not estimate the
amount of lost revenues that resulted from connection fees not being paid because we did not
have the information on the size and amount of pipe used to make these connections.

Accuracy of Bills

Public Works and the Tax Assessor did not effectively coordinate their activities to ensure the
accuracy of bills issued for sewage system user fees. Public Works used a computerized
Sewer User Charge Revenue System to maintain a master list of all sewage system users,
which included the appropriate fee based on the number of billing units. Although each Public
Works office was required to submit an updated master billing list to the Tax Assessor at least
once a year, the last such list was submitted in 1994. Additionally, the Public Works office
on St. Thomas did not perform periodic physical surveys of new buildings and major
renovation projects to identify changes in the billing class or number of billing units so that
the master list could be updated, as required by Public Works policies.

Our review of 40 sewage system user accounts disclosed that 22 users had received bills
which contained errors totaling $147,667. For example:

   - Records at Public Works showed that a business facility had 474 billing units and
should have been assessed an annual user fee of $23,700. Although records at the Tax
Assessor validated the number of billing units, the business was assessed annual fees of only
$3,700 in 1993 and 1994, for a total underbilling of $40,000 ($47,400 minus $7,400) for the
2-year period.

   - Records at Public Works showed that a Government facility had 416 billing units
and should have been assessed an annual user fee of $20,800. Although records at the Tax
Assessor validated the number of billing units, the Government agency was assessed annual
fees of only $800 in 1990,1993, and 1994, for a total underbilling of $60,000 ($62,400 minus
$2,400) for the 3 years.

A Tax Assessor official told us that because "numerous" billing inaccuracies were found
during 1992 to 1994 and the office was "continuously" contacted by users who said that their
bills were inaccurate, the Tax Assessor decided to maintain its own master billing list using
the same Sewer User Charge Revenue System computer software used by Public Works.
However, because of the lack of coordination between Public Works and the Tax Assessor,
the potential for inaccurate bills still exists. The two o&es should develop joint procedures
to ensure that new users are promptly and accurately added to the master file for billing
purposes and that later changes in the billing status of users are also promptly and accurately
recorded.

 
Billing of Septic Haulers

Section 1534-3 of Public Works rules and regulations establishes user fees for septic haulers
who dump sludge into the public sewage treatment system. The fees are based on the volume
of sludge dumped into the system as follows:

Volume of Septic Sludg    Fee

1,000 to 1,500 gallons     $10
1,501 to 2,000 gallons     $15
2,001 to 6,000 gallons      $25

However, we found that Public Works had not been billing septic haulers since at least 1988,
when the procedure of including sewage system user fees on the real property tax bills of
property owners was implemented. The septic haulers were apparently not included in the
new billing procedure.

According to records at the Department of Licensing and Consumer Affairs on St. Thomas,
three businesses were licensed as septic haulers during the late 198Os, and four additional
septic haulers started operations after 1989. Septic haulers generally charge their customers
from $150 to $250 per load (1,500 to 2,000 gallons), and one businessman told us that he had
carried as many as eight loads of septic sludge a day to the sewage treatment plant.

We also found that Public Works officials at the sewage treatment plant on St. Thomas did
not have procedures in place to record the number of loads of septic sludge brought to the
plant by septic haulers or the volume of each load. Public Works personnel on St. Croix did
not start recording this type of information until February 1996.

Collection of Delinquent Amounts

Section 310.8 of the Department of Finance Accounting Manual requires that billing agencies
keep an up-to-date record of the bills issued and periodically examine the files of unpaid bills
to determine which are past due. Because the billing and collection functions for sewage
system user fees are divided among Public Works, the Tax Assessor, and Finance, there was
no clear assignment of responsibility for maintaining accounts receivable records, and none
were maintained. However, because Finance is responsible for the collection of amounts
owed on real property tax bills, including the portion related to sewage system user fees, and
has access to the records on paid and unpaid bills, we believe that Finance should also be
responsible for maintaining the related accounts receivable records. This would enable
Finance officials to be aware of and promptly follow up with delinquent sewage system users.

As part of our review, we compiled a computer database of all unpaid sewage system user
fees on file at the Finance offices on St. Thomas. As a result, we identified 1,434 sewage
system users who had delinquent balances totaling $349,545. A detailed review of 40 of the
1,434 delinquent accounts revealed that 4 accounts, totaling $3,111, had been delinquent for
7 years and that 6 other accounts, totaling $9,705, had been delinquent for 6 years. Although

6

 
we did not compile a similar database of unpaid sewage system user fees on file at the
Finance offices on St. Croix, we identified at least 300 delinquent accounts in the town of
Christiansted.

We also found that, because neither Finance, Public Works, nor the Tax Assessor maintained
accounts receivable records for unpaid sewage system user fees, collection enforcement
efforts were seldom initiated. Of the 1,434 delinquent sewage system users identified by our
review of records at Finance on St. Thomas, only 95 accounts (less than 7 percent of the total
number of delinquent accounts) had evidence of collection efforts. Six of these 95 accounts
were among 12 properties that were sold at auction in April 1997 for nonpayment of real
property taxes. A Finance enforcement officer stated that Public Works personnel never
inquired about the status of delinquent sewage system user fee accounts. Although Title 33,
Section 2494, of the Virgin Islands Code requires Finance to collect penalties and interest on
unpaid sewage system user fees, we found no clear assignment of responsibility to Finance
or Public Works for the collection of delinquent sewage system user fees.

Accounting for Amounts Collected

Finance did not ensure that revenues generated from sewage system application, connection,
and user fees were properly accounted for. Title 33, Section 3076, of the Virgin Islands Code
established a Sewer Waste Water Fund, to be administered by Finance, for the purpose of
financing the maintenance and operation of the public sewage system. However, the
Government's Financial Management System had two sewage-related funds: the Sewer Waste
Water Fund (No. 490100), established by Section 3076, and a Sewer Fund
(No. 490000). The Assistant Director for Administration at Public Works told us that he was
aware of the existence only of the Sewer Fund (No. 490000).

Our review of sewage system fee collection documents at Finance disclosed that there was
no relationship between the amounts collected and the amounts recorded as revenues in either
of the two funds. For example:

  - In fiscal year 1994, collections totaled $658,055. However, only $39,089 was
                       ,
recorded as revenues in the Sewer Fund (No. 490000), and no revenues were recorded in the
Sewer Waste Water Fund (No. 490100).

  - In fiscal year 1995, collections totaled $951,575. However. $1,082,000 was
recorded as revenues in the Sewer Fund (No. 490000), and no revenues were recorded in the
Sewer Waste Water Fund (No. 490100).

  - In fiscal year 1996, collections totaled $301,368. However, as of May 1997, no
revenues had been recorded in either the Sewer Fund (No. 490000) or the Sewer Waste
Water Fund (No. 490100).

With regard to fiscal year 1996 collections, a Finance official told us that collections received
in May 1996 had not been posted to the Financial Management System by May 1997, or 11
months later.

 
Our detailed review of collection documents for September 1995 also disclosed that
collections were not always deposited into the bank accounts on a daily basis, as required by
Section 3 10 of the Department of Finance Accounting Manual. For example, collections of
$127,616 made on September 29, 1995, were not deposited until October 2 ($12,669),
October 26 ($36,028), and November 6 ($78,919).

Recommendations

We recommend that the Governor of the Virgin Islands direct the Commissioner of Public
Works to:

   1. Develop and implement procedures for reevaluating sewage system fees on a
biennial basis, as required by Title 19, Section 1534, of the Virgin Islands Code, and for
adjusting the fees to an amount sufficient to cover the operating costs of the public sewage
system.

    2. Develop and implement standardized procedures for the processing of applications
for connections to the sewage system which will ensure that all applicants pay the appropriate
application and connection fees and that the Office of the Tax Assessor is promptly notified
of the new users who are to be added to the master list of sewage system users.

    3. Coordinate with the Office of the Tax Assessor on the responsibilities of each office
with regard to maintaining the master list of sewage system users and develop and implement
joint procedures to ensure that all users are accurately billed based on the established fee
schedule.

   4. Develop and implement procedures to ensure that septic haulers are accurately
billed, based on the established fee schedule, for septic sludge dumped at the public sewage
treatment plants.

We also recommend that the Governor of the Virgin Islands direct the Commissioner of
Finance to:

   5. Establish and maintain complete and accurate accounts receivable registers for
unpaid sewage system user fees and develop and implement procedures for the collection of
delinquent sewage system user fees, including the penalties and interest prescribed by Title 33,
Section 2494, of the Virgin Islands Code.

   6. Aggressively enforce the collection of sewage system user fees, including those
owed by Government agencies.

   7. Consolidate the Sewer Fund (No. 490000) and the Sewer Waste Water Fund
(No. 490100), which was established by Title 33, Section 3076, of the Virgin Islands Code,
and implement procedures to ensure that sewage system fees are promptly and accurately
recorded in the financial records of the consolidated fund.

8

 
8. Ensure that the Department's collectors deposit sewage system fee collections on

a daily basis, as required by Section 3 10 of the Department's Accounting Manual.

Governor of the Virgin Islands Response and Office of Inspector General
Reply

The January 15, 1998, response (Appendix 2) to the draft report from the Governor of the
Virgin Islands concurred with the eight recommendations and indicated that corrective actions
had been or would be taken. Based on the response, we consider Recommendations 6-8
resolved and implemented and request additional information for Recommendations l-5 (see
Appendix 3).

The Inspector General Act, 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 March 27, 1998. The response should be addressed to our Caribbean Regional
Office, Federal Building - Room 207, Charlotte Amalie, Virgin Islands 00802. The response
should include the information requested in Appendix 3.

We appreciate the assistance of personnel of the Departments of Public Works and Finance
and the Office of the Tax Assessor in the conduct of our audit.

Sincerely,

Robert J. Williams
Acting Inspector General

cc: Mr. Lindel Williams, Commissioner of Public Works
Mr. Verne Callwood, Tax Assessor
Mr. Juan Centeno, Commissioner of Finance
Mr. Elmo D. Roebuck, Special Assistant to the Governor
  for Policy and Audit Resolution

 
APPENDIX 1

CLASSIFICATION OF MONETARY AMOUNTS

Finding

Potential
Additional
Revenues*

Reevaluation of User Fee Structure                 $400,000

Inaccurate Billing

147,667

Accounts Receivable


  Total

349,545

$897,212

* Amounts represent local finds.

10

 
APPENDIX 2
Page 1 of 7

THE UNUED STATES VIRGIN ISLANDS

OFFtCE OF THE GOVERNOR
   GOVERNMENT HOUSE
Charlotte Amalie, V.I. 00802
    809-774-0001
    January 15,1998

Honorable Wilma Lewis
Inspector General
U.S. Department of Interior
Office of the Inspector General
kkshington, DC. 2ziSti

RE 0
   0  Draft Survey Report - Sewage Svstem User Fees,
  Government of the Virgin Islanck

Dear Inspector General Lewis:

  This is to acknowledge receipt of your Draft Survey Report on Sewage System
User Fees for the Government of the Virgin Islands.

  We have reviewed this Draft Survey Report and we are submitting the following
responses on the issues:

Recommendation No. 1

  Develop and implement procedures for re-evaluating sewage system fees or a
biennial basis as required by Title 19, Section 1534 of the Virgin Islands Code, and for
adjusting the fees to an amount sufficient to cover the operating costs of the sewage
system.

Response to No. 1 - Concur

  The Department of Public Works has begun drafting tentative procedures as a
prerequisite to formalizing procedures for conducting biennial re-evaluations of sewage
system fees. A formal recommendation will be made to the Governor to increase fees in
order to more accurately reflect Public Works Department costs as follows:

(A)  $20.00 per foot for 4" sewage line
(B)  $30.00 per foot for 6" sewage line
(C)  Increase the per unit fee from $50.00 to $75.00

11

 
APPENDIX 2
Page 2 of 7

Letter to Inspector General Lewis
January 15,1998
RE: Sewage System User Fees
Page 2

Recommendation No. 2

  Develop and implement standardized procedures for the processing of
applications for connections to the sewage system which will ensure that all applicants
pay the appropriate application and connection fees and that the Office of the Tax
Assessor is promptly notified of the new users who are to be added to the master list of

sewage system users.

Response No. 2 - Concur

The Department of Public Works is expanding internal procedures to monitor the

master file and to ensure that all sewage system users including all government ofices
and V.I. Public Housing Authority apartments are in the fee collection system. The Office

of the
master

Tax Assessor will be promptly notified of new users who are to be added to the
 
hst .

Recommendation No. 3

  Coordinate with the Office of the Tax Assessor on the responsibilities of each
office with regard to maintaining the master list of sewage system users and develop and
implement joint procedures to ensure that all users are accurately billed based on the
established fee schedule.

Response No. 3 - Concur

  Procedures now being developed by the Department of Public Works will be
coordinated with the Office of Tax Assessor and the Department of Finance through
electronic file updating. We recognize the need for the development and implementation
of joint procedures by the Department and Tax Assessor's Office for greater efficiency. A
copy of Commissioner Lindel A. Williams' memorandum of December 2, 1997 on this
subject matter is enclosed for your information.

Recommendation No. 4

  Develop and implement procedures to ensure that septic haulers are accurately
billed, based on the established fee schedule, for septic sludge dumped at the public
sewage treatment plants.

12

 
APPENDIX 2
Page 3 of 7

Letter to Inspector General Lewis
January 15,1998
RE: Sewage System User Fees
Page 3

Response No. 4 - Concur

  The Commissioner of the Department of Public Works has informed me that
additional staff will be needed for the Utilities Division in both Districts to coordinate
septic haulers on the field as well as to track the numbers and the volume of septic sludge
being delivered to the sewage treatment plants.

  The Acting Director or Environmental Services has been assigned to develop a
manual of procedures for the dumping of sewage at the public sewage treatment plants.
Enforcement of these procedures will require legislation providing for specific penalties
for illegal dumping.

Recommendation No. 5

  We also recommend that the Governor of the Virgin Islands direct the
Commissioner of Finance to establish and maintain complete and accurate accounts
receivable registers for unpaid sewage system user fees and develop and implement
procedures for the collection of delinquent sewage system user fees, including the
penalties and interest prescribed by Title 33, Section 2494, of the Virgin Islands Code.

Response to No. 5 - Concur

  As you know, the sewage user fees are billed as a part of the property tax bills so
that it should not be so difficult to establish and maintain complete and accurate accounts
receivable registers for unpaid sewage system user fees.

  I have instructed my Commissioner of Finance to develop the appropriate
registers and to develop and implement procedures for the collection of delinquent

sewage fees.

Recommendation No. 6

  We recommend that the Governor of the Virgin Islands direct the Commissioner
of Finance to aggressively enforce the collection of sewage system user fees, including
those owed by Government agencies.

13

 
APPENDIX 2
Page 4 of 7

Letter to Inspector General Lewis
January 15,1998
RE: Sewage System User Fees
Page 4

Response to No. 6 - Concur

   I am very much aware of the need to collect all fees and revenue due to this
government in an aggressive fashion.

  The Commissioner of Finance has assured me that all steps are being taken to
enforce the letter of the law as prescribed by Title 33, Section 2494, of the Virgin Islands
Code.

Recommendation No. 7

  We recommend that the Governor of the Virgin Islands direct the Commissioner
of Finance to consolidate the Sewage Fund (No. 490000) into the Sewage Waste Water
Fund (No. 490100) that was established by Title 33, Section 3076, of the Virgin Islands
Code and implement procedures to ensure that sewage system fees are promptly and
accurately recorded in the financial records of the consolidated fund.

Response No. 7 - Concur

The Commissioner of Finance agrees that this action should be taken to avoid confusion
and duplication. I have directed him to implement this recommendation immediately.

Recommendation No. 8

  We recommend that the Governor of the Virgin Islands direct the Commissioner
of Finance to ensure that the Department's collectors deposit sewage system fee
collections on a daily biases, as required by Section 3 10 of the Department's Accounting
Manual.

Response No. 8 - Concur

  I have directed the Commissioner of Finance to instruct all Department of Finance
collectors to follow the mandates of Section 3 10 of the Department's Accounting Manual
requiring the daily deposit of sewage system fees.

  You may be assured that my Administration is taking every action to improve our
sewage fees collection system.

14

 
APPENDIX 2
Page 5 of 7

Letter to Inspector General Lewis
January 15,1998
RE: Sewage System User Fees
Page 5

  If you should have any fkther questions regarding our response to your
recommendations, please feel free to contact my office.

Sincerely,

Governor

Enclosure: (1)

cc a
  .  Arnold E. Van Beverhoudt, Jr., Caribbean Regional Office
   Lindel A. Williams, Commissioner of Public Works
   Verne Callwood, Tax Assessor
   Juan Centeno, Commissioner of Finance
  Elmo D. Roebuck, Special Assistant, Audit & Policy Evaluation

15

 
APPENDIX 2
Page 6 of 7

OFFICE OF
COMMISSIONE

R

         GOVERNMENT OF
THE VIRGIN ISLANDS OF THE UNITED STATES
                           n
                           e
           PUBLSC WORKS DEPARTMENT

                   8244 SUB BASE
           ST. THOMAS, V.I. 00802-5805

 

TEL (809) 77694844, EXT. lOI/ 102

   (809) 7744301
FAX (809) 774-5089

JVlEMORANDUM

TO .
   .

Mirko Restovic
Director of Utilities

Vida Rouse
Director of Administration

Geoffrey Watson
Acting Director of Environmental Services

FROM:

Lindel A. Williams, P.E.
Commissioner

DATE:    December 2,1997

RE .
-    .     NEED TO DEVELOP CONTROL PROCEDURES FOR SEWAGE
       SYSTEM FEES

Enclosed herewith are Public Works comments to a Federal Audit on the Sewer System
Users fees (No. V-IN-VIS-001-97) dated September 1997.

You will note that I have recommended an inter-agency work group to meet and study
the recommendations for improvement of the entire process from application to
collection of fees.

The purpose of this memorandum is to request that you conduct an internal review of
the processes within Public Works and to detemCne what actions should be taken to not
only implement the recommendations for Public Works but how we can improve the
entire Sewer User System.  The deadline for submittal of your reports is Friday,
December 19, 1997. Please assign a high priority to this project. Your report must
include hard copies of all forms, applications, tracking details currently used by PWD
and any outside agency forms being used in the Sewer System Users Program.

16

 
) .w ,B. EMiINEERfNG    ID:809-774-7268           UkL UL 21     -v-v. .--
                            ,

,

APPENDIX 2
Page 7 of 7

PAGE 2 - NEEX) ?`o DBmmY CONTROL PAtCX~D~s FOR SEWAGE
      SYSTEM FEES

Your prompt rtthion to this mot;tcr is apprcd&lcd      .
                                          ,

 
APPENDIX 3
Page 1 of 2

STATUS OF AUDIT REPORT RECOMMENDATIONS

Finding/Recommendation
  Reference

StatUS

1

Management
concurs;
additional
information
needed.

2

Management
concurs;
additional
information
needed.

Managen
concurs;
additiona 1
informati c
needed.

ent

In

Management
concurs;
additional
information
needed.

 

Action Required

Provide a target date and the title of the
official responsible for developing
procedures for conducting biennial
reevaluations of sewage system fees and a
new fee schedule. When completed, a
copy of the new procedures and fee
schedule should be provided to our
Caribbean Regional Office.

Provide a target date and the title of the
official responsible for developing
procedures for processing new
applications for connection to the sewage
system and ensuring that the user master
file is promptly updated. When
completed, a copy of the new procedures
should be provided to our Caribbean
Regional Office.

Provide a target date and the title of the
offkial responsible for developing joint
procedures, with the Office of the Tax
Assessor and the Department of Finance,
to ensure that sewage system users are
billed accurately. When completed, a
copy of the new procedures should be
provided to our Caribbean Regional
Office.

Provide a target date and the title of the
official responsible for developing
procedures to ensure that septic haulers
are accurately billed for septic sludge
dumped at the public sewage treatment
plants. When completed, a copy of the
new procedures should be provided to our
Caribbean Regional Office.

18

 
APPENDIX 3
Page 2 of 2

Finding/Recommendation
  Reference

Status        Action Required

5

Management  Provide a target date and the title of the
concurs;   official responsible for developing
additional   procedures for maintaining an accounts
information  receivable register for outstanding sewage
needed.    system fees and enforcing collection of
     delinquent fees. When completed, a copy
     of the new procedures should be provided
     to our Caribbean Regional Office.

6-8

Implemented.  No further action is required.

19

 
ILLEGAL OR WASTEFUL ACTMTIES
   SHOULD BE REPORTED TO
THE OFFICE OF INSPECTOR GENERAL BY:

Sending written documents to:            Calling:

Within the Continental United States

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

Our 26hour
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

North Pacific Retion

(703) 235-9221

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

 
Toll Free Numbers:
l-800-424-5081
TDD l-800-354-0996

FIWCommerciai Numbers:
(202) 208-5300
TDD (202) 208-2420

HOTLINE

1849 C Street, N.W.
Mail Stop 5341
Washington, D.C. 20240