[Audit Report on the Virgin Islands National Guard, Government of the Virgin Islands]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 99-i-364

Title: Audit Report on the Virgin Islands National Guard, Government
       of the Virgin Islands

Date:  March 26, 1999



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




AUDIT REPORT


VIRGIN ISLANDS NATIONAL GUARD,
GOVERNMENT OF THE VIRGIN ISLANDS


REPORT NO. 99-I-364

MARCH 1999




MEMORANDUM


             TO:  The Secretary

           FROM:  Eljay B. Bowron
                  Inspector General

SUBJECT SUMMARY:  Final Audit Report - "Virgin Islands
                  National Guard, Government of the
                  Virgin Islands" (No. 99-i-364)

Attached for your information is a copy of the subject final
audit report.  The objective of our review, which was requested
by the National Guard Bureau, U.S. Department of Defense, was to
determine whether (1) members of the Virgin Islands National
Guard who were also Virgin Islands police officers received dual
compensation for active duty time after Hurricane Marilyn and (2)
lease fees collected by the Virgin Islands National Guard for use
of the Lionel A. Jackson Armory on St. Croix by nonprofit
entities were adequately controlled and accounted for.

We found that 10 members of the Virgin Islands National Guard who
were also Virgin Islands police officers received compensation of
$12,265 from the National Guard for time served on territorial
active duty after Hurricane Marilyn and also received
compensation of $38,674 from their regular jobs as police
officers for periods during which they were also on duty with the
National Guard.  However, such payments appear to have been in
accordance with Virgin Islands law.  We also found that the
National Guard needed to improve controls over the approval and
collection of lease fees for the nonmilitary use of the Armory.
Because of these deficiencies, lease fees estimated of at least
$632 relating to Federally owned equipment were deposited into a
bank account in the Virgin Islands instead of being transferred
to the Treasury of the United States.

We made four recommendations for corrective action to the
Governor of the Virgin Islands and one recommendation to the
Chief, National Guard Bureau, Department of the Army.  In its
response, the Virgin Islands National Guard presented an
alternative action for one recommendation and concurred with
three additional recommendations.  However, the National Guard
Bureau, Department of the Army, did not respond to one
recommendation, which was readdressed to the Governor.  Based on
the response, we considered four recommendations resolved and one
recommendation unresolved.

If you have any questions concerning this matter, please contact
me (202) 208-5745 or Mr. Robert J. Williams, Assistant Inspector
General for Audits, at (202) 208-4252.

Attachment




V-IN-VIS-005-98


AUDIT REPORT

Honorable Charles W. Turnbull
Governor of the Virgin Islands
No. 21 Kongens Gade
Charlotte Amalie, Virgin Islands 00802

Lieutenant General Russell Davis
Chief, National Guard Bureau
Department of the Army
111 South George Mason Drive
Arlington, Virginia 22204

Subject:Audit Report on the Virgin Islands National Guard,
Government of the Virgin Islands (No. 99-i-364)


Dear Governor Turnbull and Lieutenant General Davis:

This report presents the results of our limited review of payroll
expenses of and lease fee collections by the Virgin Islands
National Guard, Government of the Virgin Islands.  The objective
of our review, which was requested by the National Guard Bureau,
U.S. Department of Defense, was to determine whether (1) members
of the Virgin Islands National Guard who were also Virgin Islands
police officers received dual compensation for active duty time
after Hurricane Marilyn and (2) lease fees collected by the
Virgin Islands National Guard for use of the Lionel A. Jackson
Armory on St. Croix by nonprofit entities were adequately
controlled and accounted for.

BACKGROUND

The Virgin Islands National Guard was established in 1973
pursuant to Title 23, Chapter 19, of the Virgin Islands Code.
The National Guard's mission is to assist local civil authorities
in the event of natural disasters, civil disturbances, and/or
other emergencies.  The National Guard may also be called to
active duty as a part of the United States armed forces in the
event of a national security need.  The Governor of the Virgin
Islands is the Commander in Chief of the National Guard and,
among other duties, nominates to the President of the United
States candidates to serve as the Adjutant General of the
National Guard.  By Executive Order dated October 10, 1987, the
Governor established the Office of the Adjutant General as the
oversight agency for the Virgin Islands National Guard and the
Virgin Islands Territorial Emergency Management Agency.

On September 14, 1995, the Governor mobilized the National Guard
into territorial active duty as an emergency protective measure
to maintain the health, welfare, and safety of  Virgin Islands
residents because of the potential danger posed by Hurricane
Marilyn as it approached the islands.  The hurricane struck the
Virgin Islands on September 15.  At that time, the National Guard
had 790 members, of which 37 were full-time police officers (19
on St. Thomas and 18 on St. Croix).  Of the 37 police officers,
10 (8 on St. Thomas and 2 on St. Croix) were placed on
territorial active duty status as a result of the hurricane.  The
National Guard remained on territorial active duty for at least 8
weeks after the hurricane.

The Lionel A. Jackson Armory on St. Croix is a Federally owned
facility, the use of which has been licensed to the Government of
the Virgin Islands for Virgin Islands National Guard purposes for
a period of 50 years, ending June 2036.   The license has
conditions, among others, that (1) the Government of the Virgin
Islands will share (75 percent Federal and 25 percent local) in
the cost of operating and maintaining the Armory and (2) the
Virgin Islands National Guard, with concurrence from the National
Guard Bureau, may issue licenses to allow the short-term use of
Armory facilities, such as meeting rooms, for government and
nonprofit community service activities.

SCOPE OF AUDIT

The scope of the audit was limited to reviewing (1) payroll
transactions related to Virgin Islands National Guard members who
were also police officers during the period of September to
November 1995 and (2) lease fee collections by the Virgin Islands
National Guard for the use of the Lionel A. Jackson Armory by
nonmilitary entities during fiscal years 1995 through 1998.  Our
review was conducted at the offices of the Virgin Islands
National Guard, the Virgin Islands Police Department, and the
Virgin Islands Department of Finance.

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 to accomplish our
audit objective.

As part of our review, we evaluated the internal controls over
payments to members of the National Guard who were also police
officers and the collection of license fees for use of the
Jackson Armory.  The review disclosed that payments to National
Guard members were in accordance with existing Virgin Islands
law.  However, we found internal control weaknesses related to
the collection of lease fees, which are addressed in the Results
of Audit section of this report.  Our recommendations, if
implemented, should improve the controls in these areas.

PRIOR AUDIT COVERAGE

The Office of Inspector General has not issued any prior audit
reports on the Virgin Islands National Guard.   However, in
August 1998, the Office of Inspector General, Federal Emergency
Management Agency (FEMA), issued an audit report (No. E-52-98) on
its review of disaster assistance funds awarded to the Virgin
Islands National Guard as a result of Hurricane Marilyn.  The
report concluded that the National Guard used and accounted for
disaster assistance funds of $2.6 million in accordance with
Federal regulations and FEMA guidelines.

RESULTS OF AUDIT

Ten National Guard members who were also police officers received
compensation of $12,265 from the National Guard for time served
on territorial active duty after Hurricane Marilyn and also
received compensation of $38,674 from their regular jobs as
police officers for periods during which they were also on duty
with the National Guard.  However, such payments appear to have
been in accordance with Virgin Islands law.  We also found that
the National Guard needed to improve controls over the approval
and collection of lease fees for the nonmilitary use of the
Lionel A. Jackson Armory.  The legal provisions related to the
compensation of members of the Virgin Islands National Guard are
contained in Title 23, Section 1524, of the Virgin Islands Code,
and requirements related to the use of military property are
defined in the license agreement between the Virgin Islands
National Guard and the Department of the Army, Army Regulation
700-131 ("Loan and Lease of Army Materiel"), Virgin Islands Army
National Guard Regulation 700-131 ("Loan and Lease of Army
Property"), and internal rules and regulations of the Virgin
Islands National Guard.  The deficiencies related to lease fee
collections occurred because there was inconsistency within the
requirements, personnel involved in the facility leasing program
were not aware of all of the requirements, and supervisory
oversight of the individual who was responsible for administering
the program was inadequate.  As a result, lease fees estimated of
at least $632 relating to Federally owned equipment were
deposited into a bank account in the Virgin Islands instead of
being transferred to the Treasury of the United States.

Dual Compensation

The Virgin Islands National Guard  was mobilized into territorial
active duty by the Governor  on September 14, 1995.  Hurricane
Marilyn struck the territory on September 15, 1995, causing
significant damage to public and private property and resulting
in a Presidential disaster declaration.  Based on our review, we
determined that 10 (out of 37) police officers who were also
members of the National Guard were among the personnel included
in the territorial active duty mobilization.  These 10
individuals received $12,265 in compensation from the National
Guard for 912 hours of territorial active duty during September
through November 1995.  They also received $38,674 in regular
compensation as police officers for pay periods during which they
were also on duty with the National Guard.  However, the
Government of the Virgin Islands interprets Title 23, Section
1524, of the Virgin Islands Code as allowing such dual
compensation by stating:

     (a) An officer or employee of the Government of the Virgin
     Islands, its agencies, authorities and public corporations,
     is entitled to leave without loss in pay, time or
     performance or efficiency rating for each day, not in excess
     of 30 days in a calendar year in which he is on federal
     active duty, or training duty as a Reserve of the Armed
     Forces, or a member of the National Guard.

     (b) An officer or employee of the Government of the Virgin
     Islands, its agencies, authorities and public corporations,
     is entitled to leave without loss in pay, time or
     performance or efficiency rating for each day in which he is
     on Territorial active military service.

At the December 22, 1998, exit conference on the preliminary
draft of this report, National Guard officials stated that it was
National Guard policy for Government of the Virgin Islands
employees who are also National Guard members to be limited to 30
days of paid "military leave" each calendar year regardless of
whether that leave was used for Federal or territorial active
duty.  However, because the 30-day limitation is not explicitly
provided for in Section 1524, subsection (b), of the Virgin
Island Code, the officials could not ensure that all Government
agencies were applying the 30-day limitation.  Subsequent to the
meeting, we verified that none of the 10 National Guard members
who received dual compensation after Hurricane Marilyn were on
paid military leave for more than 30 days.

Based on our review, we determined that police officers who were
on territorial active military service (referred to by National
Guard personnel as "territorial active duty") with the National
Guard were paid by the Police Department during the period of
territorial active duty as though they had been on regular
full-time duty as police officers.  In addition, these police
officers were paid by the National Guard for the number of hours
they served while on territorial active duty.  Compensation paid
to members of the National Guard while on territorial active duty
is funded by the Government's General Fund, as is regular
compensation paid to police officers.  However, because the
activation of the National Guard during the period of September
to November 1995 was due to a natural disaster that resulted in a
Presidential disaster declaration, FEMA reimbursed the Government
for 90 percent of the cost of activating the National Guard after
Hurricane Marilyn.

National Guard officials told us that the activation of the
National Guard after Hurricane Marilyn could have been handled
more efficiently.  They said, for example, that in subsequent
hurricane-related activations of the National Guard, efforts were
made to minimize the extent to which essential Government
employees (particularly law enforcement officers) were among the
National Guard members who were called to territorial active
duty. Additionally, in June 1996, the National Guard developed a
Territorial Emergency Plan, which provides that police officers
and other essential Government employees would be activated
during such emergencies only if they have significant supervisory
roles within the National Guard.

Despite the subsequent efforts by National Guard officials to
minimize the extent to which essential Government employees
receive dual compensation during periods of territorial active
duty, we believe that Title 23, Section 1524, of the Virgin
Islands Code should be amended to limit military leave to a
maximum of 30 days per calendar year.  The existing law results
in excess costs to the Government and appears to benefit only one
group of National Guard members.  With regard to private sector
employees who are members of the National Guard, Title 23,
Section 1525, of the Virgin Islands Code states only that "a
person in the employ of a private employer shall, upon request,
be granted a leave of absence by his employer for the period
required to perform Territorial Active Military Service" and that
"[u]pon his release from that service, . . .  such employee shall
be permitted to return to his position with such seniority,
status, pay grade and vacation as he would have if he had not
been absent for such purposes."

Lease Fee Collections

The National Guard did not comply with existing rules and
regulations for lease fees collected for the nonmilitary use of
Federal property at the Jackson Armory.

     Regulatory Requirements.  The license agreement between the
     Virgin Islands National Guard and the Department of the Army
     (a branch of the U.S. Department of Defense) for National
     Guard use of the Federally owned Jackson Armory states that
     "the licensee may, upon the concurrence of the Director,
     Army National Guard [Chief, National Guard Bureau], issue
     licenses to nonprofit community service type activities
     under the same conditions as permitted to active Army
     installation commanders by existing Army regulations."  Army
     Regulation 700-131 prohibits the loan or lease of military
     equipment for purposes that include the following:

     (2) Events or activities that appear, directly or
     indirectly, to endorse, favor or selectively benefit private
     individuals, groups, commercial ventures, sects, political
     and fraternal groups, private or solely civilian religious
     or ideological movements, or activities or individuals
     associated with solicitation of votes in an election. . . .

     (3) Events that are not open to the general public, or where
     admission is charged for profit purposes.

     (4) Where the use of loaned or leased equipment would be in
     competition with commercial enterprise/deny the employment
     of civilians in their regular profession.

In addition, the unsigned and undated "Virgin Islands National
Guard Rules for Rental Program," which, according to a National
Guard officer, was prepared by the Virgin Islands National Guard
during 1991 and adopted through practice by National Guard
commanders, states:

     Funds collected for use of the armory facility itself will
     not be co-mingled with funds collected for use of Federal
     property, such as tables, chairs, and other furnishings in
     the armories.

     With the exception of the few cases when groups such as
     veterans organizations and scouting groups apply to use the
     Armories, Federally owned furnishings should not be made
     available to users of the armories if the items are also
     available for rent in the civilian sector.  By allowing
     these items to be used, the VI [Virgin Islands] National
     Guard is competing with local businesses in violation of AR
     700-131 and Federal law.

     In the event that such . . . items are not available [from
     commercial sources], fees for their use must be assessed
     which will reimburse the Federal government for "fair wear
     and tear."

     The Board [Armory Board, as defined in the "Rules"] will
     direct all funds collected for use of the armory facility
     itself into an Armory Maintenance Fund.  These fund [sic]
     will be used for minor repairs, beautification and similar
     projects at the armories.  The Board will direct that all
     funds collected for use of Federally owned furnishings or
     other property will be by check, made payable to "Treasurer
     of the United States" and will forward these checks to the
     United States Property and Fiscal Office . . . .

These rules also provide that the Armory Board will establish
rates for use of the armory and property located within the
facility.  Finally, the "Rules for Rental Program" defines the
authorized users of the armory and Federally owned furnishings as
follows: civic, military, and nonprofit service organizations;
hospitals and other charitable organizations; Federal, state, or
local government agencies; National Guard personnel for private
nonprofit functions such as weddings and family gatherings; and
private individuals for noncommercial, nonprofit activities.

Virgin Islands Army National Guard Regulation 700-131 was issued
in April 1996 to supersede "all other VIARNG [Virgin Islands Army
National Guard] regulations" related to the loan and lease of
military property.  The regulation defines the processing and
approval responsibilities of National Guard officials with regard
to requests for loan or lease of military property from various
segments of the local community.  The types of requesters
specifically identified in the regulation are as follows:
Army/Department of Defense activities, other Federal agencies,
and non-Federal agencies.  The regulation also states, "Leases
will be made under fair monetary rental procedures based on
prevailing commercial rates."

Lastly, the U.S. Property and Fiscal Officer for the Virgin
Islands National Guard issued two policy memoranda on the loan
and lease of military property.  In a May 15, 1996, memorandum,
the Officer reiterated the basic policies established in the
"Rules for Rental Program."  Specifically, the Officer stated
that Federally owned furnishings in the Jackson Armory could be
leased to outside organizations for a fair market rental charge
and that payment for such rental should be by check made payable
to the Treasurer of the United States.  However, the Officer
further stated, "These provisions do not apply to the Armory on
St. Croix in that it is now supported by Federal funds for
operation and maintenance.  This facility may not be used for any
non-military purpose."  In a February 19, 1998, memorandum, the
U.S. Property and Fiscal Officer revised the provisions of Virgin
Islands Army National Guard Regulation 700-131 and included, as
Annex A, a price list for military equipment that was available
for lease, such as  8-foot-long banquet tables at $7 each,
folding chairs at $1 each, and tents at $250 to $300 each
depending on size.

We believe that some inconsistency exists among the regulatory
criteria discussed in the preceding paragraphs as to what types
of nonmilitary activities are acceptable uses of the Jackson
Armory and the military property at the Armory.  Specifically,
although Army Regulation 700-131 appears to prohibit the use of
military equipment for private activities that are not open to
the public and the Property and Fiscal Officer's May 15, 1996,
memorandum specifically states that the Jackson Armory may not be
used for nonmilitary purposes, the "Rules for Rental Program"
states that private nonprofit activities by National Guard
personnel and private individuals are acceptable uses of the
Jackson Armory and equipment within the Armory.  Further, Virgin
Islands Army National Guard Regulation 700-131 and the Property
and Fiscal Officer's February 1998 revision of that regulation do
not address the lease of military equipment to private
individuals.   Because of this inconsistency, we believe that the
Chief of the National Guard Bureau, Department of the Army,
should issue a formal opinion as to what constitutes "acceptable
use" of the Jackson Armory, other similar facilities, and
Federally owned equipment under the control of the Virgin Islands
National Guard.

     Member Use.  We found that 37 applications were filed for
     nonmilitary use of the Jackson Armory on St. Croix and
     equipment located at the Armory during the period of March
     1995 to August 1998.  Of the 37 applications, 20
     applications were made by Federal and local government,
     community service, or other nonprofit organizations that
     were not charged for use of the facilities.  The other 17
     applications were made by members of the National Guard as
     private individuals.  Of the 17 applications made by
     National Guard members, 7 individuals used the National
     Guard facilities and made appropriate payment of lease fees
     totaling $1,170; 8 individuals did not use the National
     Guard facilities; and, as of June 30, 1998, there was no
     record of payment of lease fees by the 2 other National
     Guard members who had submitted applications.

     Fee Deposits and Controls.  Although the "Rules for Rental
     Program" states that funds collected for the use of Jackson
     Armory should not be commingled with funds collected for the
     use of Federally owned equipment and that fees related to
     the rental of equipment should be remitted to the Treasurer
     of the United States, the total amount of lease fees of
     $1,170 was deposited into a local bank account known as the
     104th Troop Maintenance Fund.  Because records at the
     Jackson Armory did not contain sufficient details, we were
     unable to determine exactly what portion of the $1,170 was
     related to the rental of the Jackson Armory and what portion
     was related to the rental of Federally owned equipment.
     However, based on our review of the available records, we
     estimated that at least $632 was for the rental of Federally
     owned equipment and therefore should have been remitted to
     the Treasurer of the United States.

We also found that, although the "Rules for Rental Program"
required the establishment of an Armory Board, which, among other
duties, would be responsible for establishing appropriate lease
fees, a  Board was never established.  Instead, prior to 1998, a
flat fee of $75 for the use of the Jackson Armory and its tables
and chairs was established by the National Guard officer who was
responsible for administering the rental program.  This same
individual also collected and deposited all fees, maintained all
records for the rental program, and controlled expenditures from
the bank account into which the collections were deposited.  We
believe that this practice represented a significant internal
control weakness which should be corrected through proper
segregation of duties and that the operations of the rental
program should be subject to regular supervisory oversight.

We also noted that although separate fees had been charged for
the use of the Jackson Armory and for the use of equipment since
1998, collections were still commingled and were deposited into
the local bank account.  Additionally, lessees were not given
receipts at the time of payment of the lease fees, and
collections were not deposited in a timely manner.  For example,
a collection made on November 9, 1995, was not deposited until
March 27, 1996, and a collection made on February 14, 1997, was
not deposited until March 3, 1997.  Further, the collections of
$1,170 included $40 that was collected from an individual who was
allowed to use Federally owned tables and chairs without having
submitted the required rental application.

With regard to the 104th Troop Maintenance Fund into which the
lease fees were deposited, the "Rules for Rental Program" states
that funds received for use of the Armory should be used for
maintenance and minor repairs.  However, we found that funds
deposited into this account were used for special gifts (such as
upon retirement) for National Guard members and that, on one
occasion, funds from the account were used to purchase meals for
troops who were on an overtime detail.  In addition, the account
was losing funds because of a monthly bank service charge of
$8.50.

In addition to the lack of segregation of duties related to the
operation of the rental program and the absence of regular
supervisory oversight of the program, National Guard officials
told us that they were not aware of the existence of the "Rules
for Rental Program."  Further, we did not find any documentation
to support that the May 15, 1998, policy memorandum from the U.S.
Property and Fiscal Officer was enforced by National Guard
officials.  At the December 22, 1998, exit conference on the
preliminary draft of this report, National Guard officials stated
that they had obtained copies of rental program policies used by
other state National Guard units and were revising the local
policies and procedures.  They said that they expected the new
guidelines to be completed by January 31, 1999.

Recommendations

We recommend that the Governor of the Virgin Islands:

     1. Submit to the Legislature proposed legislation to revise
     Title 23, Section 1524, of the Virgin Islands Code to limit
     to a maximum of 30 days per calendar year the provisions
     which allow Government of the Virgin Islands employees to
     receive dual compensation from their employing agencies and
     from the National Guard during periods in which they are on
     Federal or territorial active duty with the National Guard.

     2. Require the Adjutant General of the National Guard to
     review internal procedures for the rental of National Guard
     armories, facilities, and equipment and implement revised
     procedures that correspond with the general requirements of
     Army and National Guard Regulations 700-131 and the
     recommended opinion from the Chief, National Guard Bureau
     (see Recommendation 5).  The revised procedures should
     include a clear description of the types of nonmilitary uses
     that are considered acceptable, a formal fee schedule for
     the rental of various facilities and equipment, a
     description of the administrative and accounting duties
     related to the rental program which provide an adequate
     level of segregation of duties, and provisions for
     supervisory oversight of the rental program.

     3. Require the Adjutant General of the National Guard to
     account for the lease fee collections in the 104th Troop
     Command Maintenance Fund and, consistent with the
     recommended guidance from the Chief, National Guard Bureau
     (see Recommendation 5), forward the appropriate portion of
     the funds to the Treasury of the United States.

     4. Direct the Adjutant General of the National Guard to
     consult with officials of the banking institution to
     determine the feasibility of having the 104th Maintenance
     Bank Account exempted from monthly bank service charges.

     5. Request from the National Guard Bureau, Department of the
     Army, a formal opinion as to what constitutes "acceptable
     use" of the Lionel A. Jackson Armory, other similar
     facilities, and Federally owned equipment under the control
     of the Virgin Islands National Guard and guidance as to how
     lease fees collected for the use of Federally owned National
     Guard facilities and equipment in the Virgin Islands should
     be processed and accounted for.

Virgin Islands National Guard Response and Office of Inspector
General Reply

In its March 8, 1999, response (Appendix 2) to the draft report,
the Virgin Islands National Guard presented an alternative action
for Recommendation 1 and concurred with Recommendations 2, 3, and
4.  Based on the response, we consider Recommendations 1, 2, and
3 resolved but not implemented and Recommendation 4 resolved and
implemented.  Accordingly, the unimplemented recommendations will
be referred to the Assistant Secretary for Policy, Management and
Budget for tracking of implementation.  Regarding  Recommendation
5, which was initially addressed to the Chief, National Guard
Bureau, we request that the Governor obtain an opinion on the use
of armory facilities.  (See Appendix 3.)

Recommendation 1.  Nonconcurrence.

     Virgin Islands National Guard Response.  The  Virgin Islands
     National Guard stated that the recommendation "needs to
     clarify whether the [recommended limitation of] 30 days per
     calendar year apply to both Federal and Territorial active
     duty combined or 30 days federal and 30 days territorial
     active duty. . . . The National Guard recommends 30 days for
     federal military service and a separate 30 days for TAD
     [territorial active duty].  Employees who have exhausted the
     30 days TAD with pay will have the option to use accumulated
     annual leave or leave without pay."

     Office of Inspector General Reply.  The original intent of
     Recommendation 1 was to limit paid active duty in the
     National Guard to a combined total of 30 days for Federal
     and territorial active duty.  This recommended limitation
     was based on discussions that occurred during the December
     22, 1998, exit conference on the preliminary draft of this
     report (see page 4), during which National Guard officials
     stated that it was National Guard policy for Government of
     the Virgin Islands employees to be allowed 30 days of paid
     "military leave" each calendar year regardless of whether
     that leave was used for Federal or territorial active duty.
     However, in view of the justification presented in the
     response, we accept the National Guard's suggested
     alternative of having separate 30-day limitations for
     Federal and territorial active duty.

The Inspector General Act, Public Law 94-452, 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 1), 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 to this report by
April 30, 1999.  The response should provide the information
requested in Appendix 3 and be addressed to our Caribbean Field
Office, Federal Building - Room 207, Charlotte Amalie, Virgin
Islands 00802.

We appreciate the assistance of the management and staff of the
Division of Personnel in the conduct of our audit.

                              Sincerely,



                              Eljay B. Bowron
                              Inspector General

cc:  Major General Jean A. Romney,
     Virgin Islands Adjutant General




                                                  APPENDIX 1

             CLASSIFICATION OF MONETARY AMOUNTS


                                          Funds To Be Put
                 Finding Area               To Better Use

Dual Compensation                                $12,265 *

Lease Fee Collections                                632 **

Total                                            $12,897


__________
* The amount represents local funds.
** The amount represents Federal funds.
                                                       APPENDIX 2
                                                      Page 1 of 2

VIRGIN ISLANDS NATIONAL GUARD RESPONSE

                                                       APPENDIX 3

STATUS OF AUDIT REPORT RECOMMENDATIONS

Finding/Recommendation
Reference

1, 2, and 3

4

5

Status

Resolved;
not implemented.

Implemented.

Unresolved.

Action Required

No further response to the Office of Inspector General is
required.  The recommendations will be referred to the Assistant
Secretary for Policy, Management and Budget for tracking of
implementation.

No further action is required.

Respond to the revised recommendation, and provide a plan
identifying actions to be taken, a target date for
implementation, and the title of the official responsible for
implementation.  If nonconcurrence is indicated, provide specific
reasons for the nonconcurrence.






Within the Continental United States

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Mail Stop 5341
Washington, D.C. 20240

Calling:

Our 24 hour
Telephone HOTLINE
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(202) 208-2420 or
1-800-354-0996



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

Calling:
(703) 235-9221


North Pacific Region

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


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