The Department of Agriculture’s negligence in administering its land leasing and land clearing programs violated the law and led to abuses of public property and services, according to an audit released by the Office of the V.I. Inspector General on Thursday.
The audit targeted two programs: Agriculture’s leasing of public agricultural land to farmers and its practice of providing land-clearing services at subsidized rates for agricultural purposes.
Under the Sustainable Farming Act, which was established to promote and protect the agricultural industry of the Virgin Islands, the department has the right to lease public land that is zoned for agricultural purposes to qualified farmers. Under the law, the department has oversight of 2,653.6 leasable acres.
The law also gives the Department of Agriculture the right to provide aid in preparing publiclyleased or privatelyowned land for farming purposes.
Under this power, the department offers land-clearing services for rates far below market price. Investigators found that the department only charged $40 per hour for bulldozing services, well below $120-$250 rates charged by private companies.
The audit found that both programs suffered from lax record keeping and a lack of formalized policies and procedures.
Investigators discovered that major policies governing both programs – such as requiring business plans be submitted before a lease was approved or requiring private land owners to use land cleared by the department for agricultural practices for one year – were not written down in any type of policy document.
The audit also criticized Agriculture for not verifying that its policies were being followed.
Investigators visited several leased properties on which they said there was no visible sign that any farming activities had taken place.
The department also did not follow up with landowners who had their properties cleared to ensure they were farming on that land, claiming that it was the Department of Planning and Natural Resources’ job to do so because the clearings required earth change permits issued by DPNR.
The department did not coordinate with DPNR on these follow up visits, however, and was unaware if violations were taking place or not.
The report also found that the Department of Agriculture did not keep a copy of the earth change permits presented by those seeking land-clearing services, so it is uncertain if all such jobs were in fact permitted.
The report also found that the department was violating the law in the way it awarded leases of public lands. Under the V.I. Code, all leases of public land must be routed through the Department of Property and Procurement.
While long-term, 20-year leases awarded by Agriculture were vetted by P&P, the investigation found that Agriculture was awarding short, one-year leases without involving any other governmental agency.
In some cases, investigators discovered that no leases were signed at all. Farmers simply received a one-page letter issued by the Agriculture commissioner granting them access to the land with the intention of them entering into a lease in the future.
Investigators also found that some farmers who received one-year leases continued to occupy the property long after the lease had expired without signing a new agreement. In one case a farmer who had signed a one-year lease in Fiscal Year 2002 was still farming the same plot in FY 2010 with no additional agreement being reached.
The audit found that 64 percent of all leases issued by the department were illegal short-term leases.
The report further found that the department was deficient in collecting payment from its clients. Policy dictates that invoices for services should be issued within a month, but investigators found that the majority of bills were issued between 31 and 180 days after the job was completed.
The report also accused Agriculture of being inconsistent with its collection efforts from delinquent accounts. Investigators found several instances where initial collection letters were issued but no follow-up was ever sent. They also found three instances in which their collection cases in small claims court were dismissed with prejudice because no one from Agriculture showed up at the hearing to make the department’s case.
Investigators also found that the department had been delinquent in reporting harvest totals to the legislature as is mandated by law. A review of leased farms found that many farmers were also delinquent in supplying the department with their harvest totals.
The report made nine recommendations:
1. Develop comprehensively written formalized internal policies and procedures to aid in administering and monitoring the Land Leasing and Land Preparation programs in accordance with V.I. Code requirements;
2. Follow the Virgin Islands procurement laws governing the execution of contracts andlease agreements;
3. Have appropriate staff monitor the subsidized cleared lands of private landowners to ensure compliance with land use criteria. If noncompliance is noted and it persists, require that the owners pay the market rates for the subsidized services received;
4. Have appropriate staff conduct routine, thorough and well-documented monitoring of leased public lands to ensure leaseholders’ compliance with land use criteria. Based onthe terms and conditions of formalized lease agreements and provisions of the V.I. Code, take appropriate action for assessed continued noncompliance;
5. Collaborate with Planning and Natural Resources, Property and Procurement and otherappropriate government entities in enforcing provisions of the V.I. Code;
6. Ensure that Agriculture’s billing and collection processes are timely and consistent and that appropriate follow-through measures are taken to settle delinquent accounts;
7. Ensure that program files and records are properly organized and maintained;
8. Ensure that farmers submit their annual harvest and production reports;
9. Adhere to the reporting requirements of the V.I. Code for submission of the department’s annual harvest and production report to the legislature, Bureau of Economic Research and the public via electronic and print media;
In a response to the audit issued on September 6, 2013, Commissioner of Agriculture Louis Petersen acknowledged the violations found by the report and agreed to implement the recommendations.
Petersen defended the practice of supplying one-year leases to public land without P&P oversight, however, arguing that it was a way to gauge whether prospective farmers were serious and worthy of longer leases.
He acknowledged that this was outside of his powers under the law, however, and indicated that he would seek legislation to make the practice legal.
The report concluded that it felt all nine recommendations were resolved and that the Office of the V.I. Inspector General would follow up with the Department of Agriculture to monitor its compliance.