The V.I. Election System is working to comply with the recommendations of a recent federal audit that found a decade of financial mismanagement and inadequate internal controls in the Office of the Supervisor of Elections, newly installed Supervisor of Elections Caroline Fawkes told a senate panel Wednesday.
"We should welcome audits because they give us feedback to help us improve," Fawkes said to the Committee on Government Operations and Housing, which was looking into election matters and possible reforms to the territory’s election laws.
The audit was performed by the U.S. Department of the Interior, Office of the Inspector General on behalf of the U.S. Election Assistance Commission, to document how funds awarded to the Virgin Islands under the Help America Vote Act of 2002 were spent. [OIG Elections Audit]
The Election System received the audit in August, and responded Sept. 30, according to Fawkes. The EAC published the report during the first week of November.
"Our audit revealed a lack of basic internal controls at the … Office of the Supervisor of Elections," wrote Deputy Inspector General Mary Kendall, in a letter to the EAC summarizing the audit’s conclusions. "This environment has led to the mismanagement and poor administration of HAVA funds. Our findings included deficiencies in payroll and procurement, internal controls and property management, as well as inaccurate and late financial reporting and unreported program income. We also found that ESVI did not meet all of HAVA’s administrative requirements," Kendall said.
The system’s "lax posture on internal controls has put $3.3 million in HAVA funds and other funding at risk of fraud, waste or mismanagement," Kendall continued.
Auditors looked at activity from the enactment of HAVA in 2002 to the end of 2012.
The audit found large numbers of problems with financial accounting and controls, and a lack of documentation and written support for how funds were spent, .
"As a result, we question the office’s ability to properly account for any of the HAVA funds it received," the auditors say in the report. "We specifically question approximately $1.1 million associated with payroll and procurement deficiencies, inaccurate and late financial reporting, unsecured equipment and unreported program income," it continues.
Among the specific problems found, auditors say the office spent $438,452 of HAVA Title I funds for salaries from September 2003 to December, 2007, and according to office officials, three employees were paid, but the auditor received documentation for just two employees.
Also, the office "circumvents the Government of the Virgin Islands biometric punch clock system, which uses employees’ fingerprints to log their arrival and departure times," according to the report.
"This potential for abuse could affect not only HAVA funds, but also any other funding the office uses for payroll.”
There was also a pattern of a lack of written justification and comparison price quotes for small purchases.
And the Election Office imprest fund lacked controls, with the Supervisor of Elections having total control over both the funds and the records of the funds.
The report faults the V.I. government for not funding the election system sufficiently, saying it is required by HAVA to keep funding at or above $1.5 million per year, but fell below that level for the last several years.
While the audit makes no mention of any election difficulties or concerns regarding election-day HAVA compliance, it does highlight what it found to be a lack of a proper voter complaint process and a lack of response to voter complaints.
The audit recommends the federal Election Assistance Commission require 20 actions from the Office of the Supervisor of Elections:
- maintain documentation to support all HAVA related payroll costs;
- certify payroll costs to ensure HAVA funds are used properly;
- follow federal and local requirements for small purchases;
- document how HAVA funds are spent;
- file accurate, on-time federal financial reports and submit the FY 2012 report;
- accurately determine the total amount of unreported program income collected;
- amend its federal financial reports to include program income from 2003-2011;
- report program income for FY 2012 and future years;
- work with the office to resolve the unreported program income of $113,345;
- establish controls by maintaining reports, cashier receipts and deposit slips to ensure the amounts collected are reported and deposited;
- stop depositing HAVA-related fees into the imprest fund checking account;
- establish safeguards to lessen the potential for fraudulent use of the imprest fund checking account;
- immediately conduct a physical inventory to gain control of and account for equipment;
- conduct inventories at least every two years;
- reconcile any equipment previously disposed of and adhere to federal guidelines in the future;
- require the government to fund the system at FY 2000 levels of $1.5 million, as required by HAVA;
- address the failure to meet established expenditure requirements;
- adhere to administrative complaint procedures for voters, in accordance with HAVA;
- maintain a complete complaint file with all complaints, responses, records of hearings, and outcomes.
In the Election System response, which is included with the audit report, Fawkes described action plans for each area of concern.
It partially disagreed with the audit’s conclusion regarding inventories, saying the last inventory was done in March 2008. Fawkes’ response said the system would conduct an inventory, and at the most recent St. Croix board meeting she said she and staff would be conducting the inventory in the next few weeks and may close the office for a half a day for the purpose.
"How is the board and the election system dealing with this audit saying more than $3 million is at risk?" asked Sen. Diane Capehart.
St. Croix Board of Elections Chairman Adelbert Bryan said he had been asking the same questions of then-Supervisor of Elections John Abramson and did not get a response.
Fawkes said the report contained the election system’s detailed action plan for each of the audit’s recommendations. "We have a timeline and we put all our corrective measures in there," she said.
The committee also discussed the use of new vote tabulators in the next election and an array of other elections related issues. No votes were taken during the section of the day’s hearing that concerned the election system.
