May 8, 2006 – Questionable accounting practices and financial mismanagement are what are detailed in an audit report on the St. Thomas-St. John Horseracing Commission.
Among the facts included in the report, which was recently released by the V.I. Inspector General's Office, was that during 2002-03, the organization had no accounting system, did not document its source of income for various deposits, and could not provide records outlining why funds were being withdrawn from the commission's account at Banco Popular.
"All we had were the bank statements," said Inspector General Steven van Beverhoudt on Monday morning. "And they don't show where the income being deposited into the account was coming from. At the same time, we also don't know what the money was going to in terms of expenses."
Van Beverhoudt said that revenues generated by various horseracing activities were supposed to have been deposited into the account by the promoter of the Clinton Phipps Racetrack on St. Thomas. However, the report said that since most of the deposits were made in cash, it was difficult to determine the funding source.
While bank statements also showed that $49,752.40 was deposited into the account during 2002-03, they also indicated there were some months where no deposits were made. This "gave no assurances as to whether all the commission's revenues were being deposited into the account," the report said.
Furthermore, the report states that $21,860 was withdrawn from the account through the use of an ATH card. "The card was used to make 53 cash withdrawals ranging from $100 to $500 over a 23-month period," the report said, continuing, "We were not provided with any documentation to show the purpose for the withdrawals, nor were we given an explanation by current or former commission members."
According to the report, auditors were also not able to locate the ATH card, which was also used to make $6,556 worth of purchases at a pharmacy and department store, along with various grocery stores and retail outlets.
"The only explanation we received was that the commission needed to purchase last minute supplies on race days. We were told that food was provided during those times; however, we were also told that it was all catered and that persons providing services to the commission were paid by check," the report said.
While no one from Banco Popular would comment on the matter, standard banking procedures do not allow for ATH cards to be distributed for business or government accounts.
According to van Beverhoudt, Gilbert Comissiong was the commission's chairman during the period. Attempts made by the Source to contact Comissiong were unsuccessful.
According to the report, Comissiong – who was responsible in his position as the chair for maintaining the commission's records, disbursing funds from the account (including the use of the ATH card) and depositing revenues – also served as the organization's treasurer.
The report further discussed that auditors were never provided with a copy of the lease agreement signed in February 2002 between the commission and Virginia-based EQUUS Inc., which was hired to be the promoter of the Clinton Phipps Racetrack.
"Although the chairperson of the commission indicated there was a lease agreement with EQUUS, we were never given a copy of the agreement, nor was it found in the files reviewed by us," the report said.
Attempts made by auditors to contact EQUUS's office in Puerto Rico were also unsuccessful. "They were unable to assist us with any information because they claimed they had not established an accounting system," the report said.
Because of these findings, van Beverhoudt said at the end of the report that he had the following recommendations for the commission:
–establish a proper system of internal controls to ensure that duties are segregated between members, invoices and receipts for revenues and expenditures are maintained, and monthly financial reports and bank reconciliations are conducted.
–stop the use of all forms of ATH or debit cards in the conduct of business activities for the commission.
–Monitor and enforce the provisions of any lease agreement entered into.
–Ensure that all transfers of funds to the commission are properly documented (preferably by check).
In the report, van Beverhoudt said that a letter was sent to the commission's current chairwoman, Norma Pickard-Samuel, requesting a response to the recommendations.
However, when contacted Monday, van Beverhoudt said that Pickard-Samuel never responded. "So we went ahead and issued the report."
Calls made to Pickard-Samuel were not returned.
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