The long awaited report from the Auditor General in relation to the $20 million discrepancy in Civil Service salary increase, has been completed. The report which has been handed in to the Governor, is scheduled to be laid in the House of Assembly when it convenes this week, Thursday 18th September 2025.
Guavaberry Media was able to secure a copy of the Auditor General’s report ahead of the HOA sitting. The report tells a gruesome story of greed, and major concerns on fiscal transparency and public accountability from trusted HOA Members to the heads of the Civil Service.
PwC Misguided, Recommendations Ignored - Cabinet Deceived
In December 2020, the Deputy Governor's Office sought approval from Cabinet for funding to undertake a comprehensive service-wide compensation review. The request was approved by Cabinet approved on 7 January 2021, where Cabinet decided to conduct a service-wide compensation review to advise on the most relatively competitive compensation for the Public Service, to address remuneration disparity to further support the retention, engagement and motivation of skilled and competent officers, to effectively deliver public services. The Cabinet also gave approval for tenders to be invited from local companies with the relevant expertise to undertake the salary review exercise, and that the review be completed within one year of the start date. Consultants were engaged to carry out the review on 27 September 2022 and the final reports issued on 24 November 2023. PricewaterhouseCoopers (PWC) secured the bid to undertake the Civil Service salary review.
The PwC team was guided by a Management Steering Group which was chaired by the Deputy Governor. The membership of the steering group comprised of the Financial Secretary (Deputy Chair), Permanent Secretaries, the Ag Director of HR, the Director of Statistics and the Chairman of theCivil Service Association. A working group headed by the Permanent Secretary of the Deputy Governor’s office was also formed to provide more direct support to the Consultants. The group would ensure access to information and documents where needed, and on a timely basis. The key liaison person for the group was the Ag. Director of Human Resources.
The PwC report was submitted on 24 November 2023. The findings stated that “while the current median salary for all grades were at least 40% above the minimum wage, the median salaries for Grades 1-3 were below the living wage for the average individual household (ie $23,719.80 annually).”
The report concluded that an increase in salary levels was necessary for the Government to attract and retain talent to execute the core functions of the civil service and progress transformational goals of the country. It also recommended that the salary structure be shifted upwards to raise all salaries in grades 1-6 to at least above the living wage.
The PwC report presented three pathways to bridge the salary gaps. Living Wage which would result in approximately $25.9 million increase to the overall minimum, Industry Standard which would require an increase in specific positions and require approximately $5.3 million, and the Current External Market Wage which would affect salaries across the board and require an increase of $9.4 million. The Consultants recommended the implementation of the third option (Current External Market) as the most sustainable and cost efficient.
Their analysis of the current external market suggested that this would augment the structure such that the government’s salaries exceed the living wage. The market-based structure also aligned with the goals and objectives of the contract as well as the recommended compensation philosophy, which stated that Government of the Virgin Islands (GoVI) should meet but not lead the market. They estimated that implementation of this option would require a $9.4 million increase over the 2023 salaries.
The report was accepted by the Deputy Governor’s Office and steps commenced to secure implementation of the new salary regime. PwC’s recommended option was approved by Cabinet on 20 November 2023. Cabinet agreed that the estimated amount of $9,445,701 was to be included in the 2024 budget for new salary structure to be effective from 1 January 2024. In keeping with this decision, the $9.4 million was added to the 2024 budget together with a markup for social contributions (Social Security, National Health Insurance) for a total of $11.7 million. This was approved by the House of Assembly on 19 December 2023.
Implementation of the revised salary scales commenced in March 2024. During the course of the transition, it became apparent that the $11.7 million provided in the budget to cover the increases would not be sufficient. Supplementary appropriations and reallocations would be required to cover the cost of the new salaries.
Based on varying calculations, which did not include Members of the House of Assembly and Judges, and did not account for allowances, social contributions, or increment arrears paid during the year, PwC’s recommendation fell short. PwC provided a final report with recommendations on salaries.
However, the submitted PwC report included notations that the amounts were estimates and that actual figures would be quantified by the Ministry of Finance. The DGO’s office sought confirmation of the amounts from the Ministry of Finance’s Budget Unit (The Budget Unit) in October 2023. On 26 October 2023 the Budget Unit forwarded to DGO a schedule that showed that implementation of the new regime would require an additional $25.5 million for salaries. This together with the related statutory obligations (payroll taxes, SS and NHI) of $2.2 million brought the overall total of $27.7 million; a significant departure from PwC’s $9.4 million estimate.
Premier In Dark On What’s Going On in his Ministries?
The report notes that the discrepancy amount was raised by the DG’s Office to the Ministry of Finance. However, neither entities brought the situation to the attention of the Premier or Cabinet.
The MOF schedule, which was broken down by ministries and departments, was presented as “initial numbers” as further adjustments may be needed to take into account contract officers and daily paid workers. The MOF was invited for a meeting to discuss the schedule. The PwC’s report was issued in November 2023 with the estimate of $9.44 million unchanged. This was submitted to Cabinet on 8 and 20 November 2023. The submissions to
Cabinet did not mention the verification exercise or the Ministry of Finance’s estimate.
The Deputy Governor’s Office advised that they did not make the disclosure because the MOF’s amounts were not definitive. We received no indication that the DGO requested a more definitive estimate to support the PwC amounts. The $27.7 million estimate provided in the verification exercise was not mentioned in the “Financial Implications” section of the Cabinet Papers that was submitted by the Ministry of Finance. The Ministry instead advised that implementation of the new salary regime would increase the Government’s wage bill by $9.91 million. The difference between this and the PwC amount was the proposed increases for members of the House of Assembly which at the time was estimated to be $465,657.
The estimate of $9.44 million approved by Cabinet was incorporated into the 2024 budget under 511610 Payroll Adjustments - Salary. The Ministry of Finance increased the amount to $11.7 million to accommodate the related statutory obligations of Payroll Taxes, Social Security and National Health Insurance. These adjustments were intended to cover the implementation of the PwC recommended salaries increase.
The Premier would appear to have no clue what was going on in the MOF as it appears the Ministry went ahead and made allowance for the increase unbeknownst to the Premier and Cabinet.
HOA Members Greedily Increase Their Salaries up to 134%
The January 2021 Cabinet decision which approved the Public Service compensation review did not include remuneration for members of the House of Assembly. As a result, consideration of the HOA members’ salaries was not included in the request for proposal, terms of reference or PwC contract. In December 2022, after PwC commenced its review, the Deputy Governor’s Office instructed the Consultants to include the emoluments of the Ministers, the Governor, and the Deputy Governor in their review. The Deputy Governor is an employee of the public service, thus his emoluments were already included in the exercise. The Governor’s was not, as his remuneration is not paid by the BVI Government and was subsequently not included in the resultant report.
The report suggests that the greed of the VIP Government is at an all time high.
In addition to the $11.7 million allocated under Payroll Adjustments -Salary, other individual line items within the Personnel Emoluments subhead were also increased, some significantly. For example, the provision for HOA Members’ salaries rose from $394,000 in 2023 to $1,143,652 in the 2024 Initial Budget. This increase, which more than doubled the prior year’s allocation, provided full funding for the elected representatives’ salary adjustments.
Similarly, the budgeted amounts for Personnel staff salaries increased from $89.8 million in 2023 to $106.9 million in 2024. Overall, the Personnel Emoluments subheads grew from $126.5 million in 2023 to $141.1 million in 2024, while the actual salaries paid in 2024 totaled $120 million.
The PwC report recommended that additional funds of $465,000 would be needed to implement the recommended HOA salary structure at the minimum range This represented a 68% increase over the members current salaries. No assessment was provided for Midpoint and Maximum range application, however the salary increases were approved by the HOA members in an informal meeting on 19
December 2023 where they considered PwC’s recommendation and decided to amend their remuneration to the maximum range of the PwC scale. This would result in a 119% overall salary increase, which more than doubled the existing emoluments from $681,000 to $1,490,652 and required an additional $809,652 in the budget. This, on top of the Greedy Bill approval and payouts that same year. Leaving the HOA members and VIP Government in good financial standing while the Territory struggle to keep up with finances.
The Acting Clerk of the House of Assembly informed the DGO and Financial Secretary of this decision in a memorandum dated 21 December 2023 for the new salaries to be implemented with effect from the 1 January 2024. Additional funding for the increase had been included in the 2024 budget passed two days earlier by the House on 19 December 2023.
Further, the significant increase in HOA Members’ salaries was implemented without any form of public disclosure. The potential impact of these new salaries on retirement benefits and pensions under amended legislation for HOA Members have not been discussed or addressed.
The Auditor General recommends that:
- The Deputy Governor’s Office and the Ministry of Finance should provide explanations as to why Cabinet and the House of Assembly were not informed of the potentially greater cost for implementation of the salary increases.
- There should be adequate public disclosure of the increases made to HOA salaries and the implication for the recently increased retirement benefits.
The Territory continues to call for clean clear transparent Governance, a term that seems lost on the sitting Government. A Government that continues to call for independence for the Territory, however lack the willingness to lay good governance legislation in the HOA - particularly the much needed Freedom of Information legislation.
*content mostly pulled from AUDIT REPORT: Financing the 2024 Public Service Salary Increases - May 27, 2025