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December 14, 2020


FEMA Issues Results of FY 2018 Audit 


U.S. Virgin Islands– The Territory received notification on December 7, 2020 from the Federal Emergency Management Agency (FEMA) of the findings of the FY 2018 Validate as You Go (VAYGo) audit of recovery projects from Hurricanes Irma and Maria. The audit reviewed projects from October 1, 2017 to September 30, 2018.

The initial result of the audit, dated October 1, 2019, indicated $516M of potential improper payments and a decision to implement manual drawdown restrictions.  Since then, a series of meetings and correspondences between the Territory and FEMA have taken place to provide requested information in an effort to lift manual draw requirements.

The Office of Disaster Recovery (ODR) submitted documentation outlining updated policies and staffing plans that have been accepted by FEMA. “Since its establishment in February of 2019, ODR immediately went to work on implementing measures to monitor the flow of funding from all federal recovery sources,” said Adrienne L. Williams-Octalien Director of the ODR. “The expenditures in question occurred early in the disaster and did not go through the rigorous process established since the office took the recovery helm. I will continue to work with FEMA’s financial team to ensure the most accurate accounting of the territory’s projects.”

FEMA’s findings suggest an overall lack of supporting documentation for the transactions executed by the Virgin Islands Departments of Public Works, Human Services, Education, VI Territorial Emergency Management Agency, Waste Management Authority, Water and Power Authority, and VI Port Authority. As in standard practice and described in the letter, FEMA will issue a notice of “potential” debt to the Territory for $134,746,028. Once issued, the Territory has 60 days to appeal.

It is important to note the initial findings of potential improper payments were in excess of $500M. This amount has since been verbally reduced to $269M, which has again decreased by 50% according to the December 7th letter.

“Our administration continues to work closely with FEMA and our federal partners in the recovery and intends to appeal this decision within the allowed 60-day period,” Governor Bryan said. “While this decision is the result of a 2018 audit, I think it serves to underscore the complexity of the disaster recovery process and the efforts of our administration to meet the federal guidelines while making good on commitments made to contractors,” the Governor added.

At the time of this notice, the Territory has not received the notification of debt with the details necessary to initiate the appeals process. FEMA will meet with the Territory to discuss actions to monitor the effectiveness of the USVI’s internal controls, expectations for future drawdown documentation requirements, and address any questions related to the notice of debt and rights to appeal.