An aerial shot of WAPA's Richmond power plant. Photo Credit: ERNICE GILBERT, V.I. CONSORTIUM.
A newly released audit by the Office of the V.I. Inspector General has found that the Virgin Islands Water and Power Authority repeatedly failed to remit employee loan deductions on time during 2021 and 2022, with some payments delayed by as much as 11 months, affecting retirement processing and placing employees at risk of late loan payments.
The audit, titled Audit of Application of Employees’ Loan Payments and dated February 9, examined whether WAPA properly transmitted employee loan deductions to financial institutions in accordance with authorized agreements. The review covered calendar years 2021 through 2023 and was conducted after concerns were raised by WAPA employees that their loan deductions were not being forwarded as required.
According to the inspector general’s findings, WAPA’s management decisions during a period of financial strain led to significant delays in transmitting employee loan deductions to the Government Employees Retirement System. During calendar years 2021 and 2022, the utility was, at times, up to eleven months late in remitting those deductions. The audit determined that $447,950 in employee loan deductions to GERS were remitted late during that period.
The report explains that WAPA’s Payroll Division processes payroll on a bi-weekly basis and allows employees to authorize deductions for mortgage and personal loans with GERS, as well as loans and savings with commercial banks and credit unions. For calendar years 2021 through 2023, WAPA processed loan payment deductions for at least 223 employees.
The inspector general concluded that the delays stemmed from WAPA’s financial crisis and a management decision to prioritize other obligations—particularly fuel expenses—over timely remittance of employee deductions. The affected payments included both employer and employee retirement contributions, as well as employees’ loan deductions to GERS.
As a result, the report found that retiring WAPA employees were unable to receive their retirement income until all outstanding funds owed to GERS were paid. In addition, employees faced risks related to late loan payments to credit unions and were denied prompt access to portions of their deductions designated for savings deposits.
The audit detailed the scope of the delays, noting that while WAPA transmitted employees’ loan payments from January through March 2021 on time, remittances for 29 pay periods between April 2021 and April 2022 were delayed between one and 11 months. In some instances, as many as 25 pay periods elapsed before loan payments were remitted to GERS. Monthly payroll deductions during the period ranged from $25,000 to $55,000.
An interview with WAPA’s Director of Treasury confirmed that the delays were discussed with the then-chief executive officer and the then-chief financial officer. According to the report, those officials determined that critical obligations such as fuel costs required immediate attention, leading to the decision to delay GERS remittances. While WAPA’s Finance Committee was informed of the utility’s cash-flow issues, the report states that committee members were not told that WAPA was behind in GERS contributions, nor were the details of the plan to address the issue discussed.
The inspector general also reviewed WAPA Governing Board meeting minutes and found that the then-chief executive officer discussed cash-flow challenges with the board.
Regarding employee loan payments, WAPA officials told auditors that the decision not to remit GERS contributions did not consider the impact on employees’ loan deductions. Officials stated they became aware of the loan payment issue only after employees experienced problems when attempting to retire and believed each issue was corrected as employees brought it to the agency’s attention.
The audit also examined the impact of nonpayment on employees. GERS officials told auditors that delayed loan payments did not affect employees’ credit ratings because GERS does not report its secured loans to credit bureaus. However, GERS would delay placing employees on the retiree payroll until all outstanding contributions were received. GERS officials further stated that contributions must be posted before loan payments can be processed.
In addition to GERS, the audit reviewed WAPA’s handling of employee deductions to two commercial banks and two local credit unions. Because many payments were delivered by check rather than electronically, auditors could not determine the exact timing of when institutions received the funds. Both credit unions reported experiencing late remittances, often by up to one week and in some cases as long as three weeks. The credit unions said they worked with WAPA and affected employees to prevent adverse credit reporting and did not assess late fees because the loans were payroll-deducted.
The inspector general issued two recommendations, calling on WAPA to ensure employee-elected deductions are transmitted promptly and to establish procedures that create an audit trail for manually delivered checks. WAPA responded on January 28, 2026, agreeing with both recommendations and stating it would adhere strictly to its policies, provide compliance reports to the chair of the Finance and Audit Committee, and establish a documented process to track check deliveries. The Office of the Inspector General classified one recommendation as resolved and implemented, and the other as resolved but not implemented pending additional information.
The audit also found that WAPA began remitting outstanding loan deduction payments in May 2022 and had fully paid all arrears to GERS by April 2023. From May 2022 through December 2023, WAPA remitted deductions on time for 43 consecutive pay periods. GERS records show that of 97 WAPA employees with loans, 89 loans have been paid in full, and the remaining loans are current as of September 25, 2025.
An exit conference was held on January 13, during which there was general agreement with the findings and recommendations outlined in the report.
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