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HomeNewsArchivesAudit of Tourism's Petty Cash Leaves One Matter Unresolved

Audit of Tourism's Petty Cash Leaves One Matter Unresolved

May 13, 2009 – While most of the issues in a V.I. Inspector General's audit of the Tourism Department's petty cash funds were resolved, one matter remains outstanding.
The audit indicates Tourism paid a former bureau general manager twice for $3,714 worth of expenses. That matter has not been resolved, Inspector General Steven Van Beverhoudt said Wednesday.
And Van Beverhoudt is waiting for documentation from both Tourism and the Finance Department on how they've tightened their petty cash procedures, he said.
Tourism Commissioner Beverly Nicholson Doty requested the audit to determine if petty cash funds were established and disbursed in accordance with petty cash regulations. The audit covered the period 2003 to 2007. Doty took over as tourism commissioner on March 1, 2007.
She explained that she asked for the audit because with a background in the private sector, she wanted to make sure she followed government procedures.
"So I would know what correcting measures needed to be taken. We must be fiscally responsible," she said.
According to Van Beverhoudt, as Doty was notified of problems during the audit, she took action.
"She was correcting stuff as the audit was ongoing," he said.
Doty said her department and Finance are working to put in place procedures to prevent future problems from happening.
The auditors found that most the problems occurred because Tourism failed to follow the Finance Department's petty cash regulations and established accounting procedures, failed to establish written internal controls and procedures to ensure that transactions were accounted for properly and failed to adhere to the territory's procurement laws concerning purchases over $5,000.
And Tourism failed to follow its own petty cash regulations and didn't ensure that disbursements were in fact, petty cash, and not major expenditures.
Finance also shares some of the blame because it continually issued checks to unauthorized petty cash accounts, the auditors wrote.
The audit showed that Tourism spent $4.2 million from 14 unauthorized petty cash accounts without adequate documentation or accounting for the funds. The auditors indicated that poor and inadequate internal controls over these funds placed the money at high risk for fraud, waste and abuse.
Of the $4.2 million that went through the unauthorized accounts, the auditors wrote that $60,839 was improperly paid to a Tourism employee. The amount included $7,588 from for interior decorating and maintenance of various Tourism office locations, upholstery of the Visitors Bureau furniture and printing of wedding promotion package applications and brochures. There were no invoices to support these expenditures and the auditors could not determine if the employee did the jobs during normal working hours.
The same employee received $53,251 from several Tourism accounts for Tourism-related purchases. Instead of checks for the exact amount of the purchases, lump-sum checks were made to the employee or to cash with no supporting documentation.
Additionally, during those years, Tourism used the petty cash fund of the closed Puerto Rico office to disburse $2.7 million without Finance's knowledge or oversight. More than 60 percent of the funds from the 14 unauthorized petty cash accounts came from the Puerto Rico account. The office closed in 2001.
And Tourism deposited $12,300 in American Express Traveler's Checks into the Puerto Rico account. While some were used for their intended purpose in promotions for the territory, others were used to pay vendors and employees, to cover the costs of a trade show attended by employees in the Los Angeles office and made payable to cash for unknown purposes.
Tourism also wrote checks from the unauthorized petty cash funds for more than the allowed $15,000. One was a $450,000 check for the September 2003 Caribbean Tourism Conference on St. Thomas. After the conference was over, Tourism continued to write checks from the account for other purposes.
The audit also indicates that Tourism bought goods and services in violation of the territory's procurement laws. Auditors identified 112 transactions in four accounts where vendors were paid $1.2 million dollars.

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