Millions of Federal Dollars at Risk of Recapture Due to VIHFA Failures, Whistleblower Lawsuit Alleges

Former Chief Operating Officer Stephanie Berry claims the Virgin Islands Housing Finance Authority risks losing millions from HUD and FEMA for failing to adhere to strict federal policies on disaster recovery funding and administrative cost allocations.

A recently filed whistleblower lawsuit claims that “VIHFA will stand to lose millions of dollars through recapturing of federal funds due to non-compliance with policies and procedures.” Allegations by former V.I. Housing and Finance Authority Chief Operating Officer Stephanie Berry paint the agency as a place where the rules governing the expenditures of Community Development Block Grant Disaster Recovery funds and monies from other federal programs are willfully ignored.

Federal agencies such as HUD usually have strict controls over how grant funding is spent, including on employees being paid out of those funds who may also be working on other projects not covered by federal dollars. Ms. Berry alleges that HUD determined as far back in 2022 that administrative cost allocations were being overspent, and that the practice has continued into this year.