USVI Says Its Books Are "Fairly Presented." Auditors Disagree.

The U.S. Virgin Islands' fiscal year 2023 Single Audit -- covering $997,950,271 in federal awards the territory spent, per its own Schedule of Expenditures of Federal Awards -- was issued January 27, 2026, more than two years after the fiscal year it covers ended.▸ Independent auditor BDO USA didn't just find problems. On five of the government's twelve core financial-statement categories, including its Governmental Activities, its Federal Grants Fund, and its Unemployment Insurance Fund, BDO issued a disclaimer of opinion: not a bad grade, but no grade at all, because auditors could not gather enough evidence to say whether the numbers are even close to right. Management's own response, buried in a footnote about a since-resolved bribery scandal, is that the financial statements "are fairly presented" regardless. The audit's own findings are the test of that claim.

Under Government Auditing Standards, an auditor's opinion runs from best to worst: unmodified (clean), qualified (mostly right, with named exceptions), adverse (materially wrong), and disclaimer (couldn't even determine that much).▸ A disclaimer means the auditor is telling readers of the financial statements -- the territorial Legislature, federal grantors, bondholders -- that they cannot rely on the numbers, full stop. BDO's opinion table lists 12 such categories for GVI; 5 got a disclaimer, 1 (the government's discretely presented component units, like its housing and waste-management authorities) got an outright adverse opinion, 1 got qualified, and only 5 came back clean. That's exactly half the government's own books that auditors would not vouch for in any form.

The federal-award side was tested separately, and did worse: of 21 major federal programs BDO reviewed, it issued adverse compliance opinions on 5 -- National Guard operations and maintenance, Unemployment Insurance, the Child Care Development Block Grant Cluster, the Children's Health Insurance Program, and the Medicaid Cluster -- with 10 more qualified and only 6 unmodified.▸ The government did not qualify as a low-risk auditee for the year, a designation with real teeth: it means federal grantors are required to apply more scrutiny and testing to GVI's awards going forward, not less.

The five adverse federal-program opinions aren't abstractions.▸ Medicaid and CHIP are the health coverage for the territory's lowest-income residents and children; Unemployment Insurance and the Child Care Development Block Grant Cluster are the safety net for laid-off workers and working parents; National Guard operations funding keeps the territory's own military reserve running. An adverse opinion on any one of these means auditors found the government's compliance with federal rules for that program to be materially wrong -- not a paperwork slip, but a finding the auditor is prepared to stand behind as a verdict. Combined with the 10 qualified opinions, 15 of the 21 major programs BDO tested -- about 71% -- came back with something other than a clean bill.

In fiscal year 2023, the Virgin Islands government received about $97.0 million under settlement agreements tied to the Estate of Jeffrey Epstein, plus $1.45 million from Opioid Abatement settlements.▸ The territorial Legislature had already told the government what to do with money like this: Act 8920 requires a Southern Trust Company Settlement Fund and a Survivors and Mental Health Healing Trust Fund to receive Epstein-related settlement proceeds, and Act 8694 requires a separate Opioid Abatement Fund with its own oversight committee. As of this audit, the government had established none of them.

Instead, the $97.0 million was booked as ordinary operating revenue rather than restricted fund balance -- a violation of Governmental Accounting Standards Board Statement 54, which auditors flagged as a distinct finding on the government's core financial statements.▸ Put together: money the Legislature earmarked for trafficking survivors' mental-health care and community services sat, for the year, in the same undifferentiated pot as the government's ordinary tax revenue, with none of the statutory guardrails in place.

A second, smaller accounting failure surfaced in the same section of the audit: a promissory note from the 2019 sale of Limetree Bay Terminals' refinery assets was being amortized wrong, with loan-principal receipts booked as interest income.▸ The error overstated both notes receivable and interest income by $4.5 million as of fiscal year-end -- a mechanical bookkeeping mistake, but one auditors caught only because they checked the schedule, not because the government's own reconciliation process did.

The audit's federal-award findings also document an active criminal case.▸ In mid-2024 the U.S. Department of Justice opened an inquiry into three senior GVI officials -- the Director/Commissioner of the territory's own Office of Management and Budget, of the Virgin Islands Police Department, and of the Department of Sports, Parks, and Recreation. DOJ filed formal indictments in January 2025 alleging bribery: the three, DOJ said, provided or attempted to provide accelerated approval of contracts and invoice payments to a vendor called Mon Ethos Pro Support, LLC. The audit's own finding traces the money -- in 2023, Mon Ethos was paid $60,387 from Coronavirus State and Local Fiscal Recovery Funds, a payment BDO now classifies as questioned costs because of the bribery allegations. DOJ secured convictions of all three officials in July and December 2025.

Management's own written response, filed after the convictions, is that it evaluated the indictments and "determined that the financial statements ... are fairly presented" regardless, recording no financial adjustment; a forensic review management itself commissioned nonetheless found "insufficient documentation" and "potential circumvention of competitive bidding procedures" across the government's procurement function -- the same control failure the bribery case exploited, described in the government's own words as a live, unresolved risk rather than a closed one.

The Mon Ethos payment is the largest of ten federal-award findings the audit quantifies in dollars, but not by much: a National Guard finding tied to payments made outside a grant's allowed liquidation period carries $384,389 in questioned costs, the single largest figure in the report, out of $4.17 million in National Guard expenditures the auditors sampled.▸ Summed, the ten dollar-denominated findings -- spanning National Guard funding, COVID-19 education relief, child nutrition, unemployment insurance, special education, Head Start, and the bribery-tied CSLFRF payment -- total $623,142. Most of the audit's other findings mark questioned costs as "not determinable" or "none," which means this total is a floor, not the audit's full financial exposure.

Federal rules require a Single Audit's data-collection package to reach the Federal Audit Clearinghouse -- the national repository federal grantors use to check an auditee's history before releasing more money -- within the earlier of 30 days after the auditor's report or nine months after fiscal year-end.▸ The audit's own findings confirm the government missed that deadline for fiscal year 2023 too, citing 2 CFR 200.512 directly and warning that the lapse "can jeopardize the Government's eligibility for current and future Federal funding." The government's written corrective-action plan, filed as an appendix to this same report, commits to a centralized reporting calendar and use of a grants-management software tool called Amplifund -- but commits to no specific date by which the disclaimers themselves will clear, and the criminal cases tied to the $60,387 CSLFRF payment and the broader procurement-control failures they exposed remain what the audit itself calls an evaluated, not resolved, risk.