The US government has suspended funding to the US Virgin Islands’ housing authority after an investigation uncovered widespread corruption, leaving residents struggling to recover from two major hurricanes that hit nearly a decade ago.

Investigation Finds Widespread Financial Mismanagement

A US Housing Secretary Scott Turner-led investigation revealed that the housing authority has spent only $570,000 of the $1.9 billion in disaster recovery funding allocated nearly nine years ago.

According to Turner, the investigation found ‘widespread financial mismanagement, inadequate fraud controls, false certifications, and improper payments.’ The investigation is ongoing, and the authority has the right to appeal the suspension by requesting a hearing.

Hurricane Damage Still Unaddressed

The US Virgin Islands were struck by two Category 5 storms in 2017 – Hurricane Irma and Hurricane Maria. Despite receiving disaster recovery funding, the territory is still struggling to recover from the devastation.

The investigation found that the housing authority has completed only two of the 95 planned single-family rental rehabilitation projects and zero of the 329 single and multifamily housing projects.

The authority has also spent only 2% of its electrical grid recovery funding as of May, according to the investigation.

Administrative Costs Outpace Recovery Efforts

The Virgin Islands housing authority has spent more than half the grant funds slated for administrative costs, the investigation found.

The authority is also accused of seeking $6.2 million in disaster-related funds that the US Federal Emergency Management Agency had already paid.

Turner wrote on X that the former chief operating officer inflated a lumber contract meant to rebuild hurricane-damaged homes from $3 million to $4.5 million and took a $107,000 kickback.

He also claimed that the former chief operating officer let the lumber rot in the sun, rendering it useless – a waste of taxpayer funds.

Former Director Resigned Amid Controversy

In February, the executive director of the US Virgin Islands’ housing authority resigned after local legislators questioned why some $4.2 million remained idle as a September deadline to use the funds loomed.

Sen. Kurt Vialet accused the former director of ‘just sitting there with a smug look.’

He stated, ‘The Housing Finance Authority is not building. You can’t be upset at senators being frustrated.’

The investigation found that the authority’s former chief operating officer is in federal prison after being convicted on charges including fraud and money laundering.