Audit Chamber flags fraud risks in St. Maarten’s building permit system

GREAT BAY--Serious risks of fraud and undue influence are built into St. Maarten’s building permit system, according to a new performance audit that examines how applications are handled at the Ministry of VROMI. The General Audit Chamber found that the absence of written procedures, informal consultations with applicants and external agencies, limited oversight, and the fact that the Minister does not have to document deviations from technical or internal advice, together create vulnerabilities that can be exploited.

"To complement the audit work, a survey was conducted among persons and entities who submitted building permit applications between 2020 and 2024. While not representative, the Audit Chamber notes a response rate of 89 out of 269 (33%). Many respondents reported dissatisfaction with the current process, uncertainty about processing times, and that environmental consequences should play a more prominent role in the assessment process. 𝐀 𝐥𝐢𝐭𝐭𝐥𝐞 𝐮𝐧𝐝𝐞𝐫 𝟏𝟎% 𝐨𝐟 𝐭𝐡𝐞 𝐫𝐞𝐬𝐩𝐨𝐧𝐝𝐞𝐧𝐭𝐬 𝐢𝐧𝐝𝐢𝐜𝐚𝐭𝐞𝐝 𝐭𝐡𝐚𝐭 𝐭𝐡𝐞𝐲 𝐰𝐞𝐫𝐞 𝐚𝐩𝐩𝐫𝐨𝐚𝐜𝐡𝐞𝐝 𝐰𝐢𝐭𝐡 𝐚𝐧 𝐨𝐟𝐟𝐞𝐫 𝐭𝐨 𝐞𝐱𝐩𝐞𝐝𝐢𝐭𝐞 𝐭𝐡𝐞𝐢𝐫 𝐚𝐩𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧. 𝐖𝐡𝐢𝐥𝐞 𝐭𝐡𝐢𝐬 𝐫𝐞𝐬𝐮𝐥𝐭 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐝𝐞𝐦𝐨𝐧𝐬𝐭𝐫𝐚𝐭𝐞 𝐬𝐲𝐬𝐭𝐞𝐦𝐢𝐜 𝐜𝐨𝐫𝐫𝐮𝐩𝐭𝐢𝐨𝐧, 𝐢𝐭 𝐢𝐬 𝐚𝐧 𝐢𝐧𝐝𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐭𝐡𝐚𝐭 𝐬𝐮𝐜𝐡 𝐩𝐫𝐚𝐜𝐭𝐢𝐜𝐞𝐬 𝐨𝐜𝐜𝐮𝐫. Considering the sensitive nature of the question, the Audit Chamber notes it is possible that some respondents may have chosen not to disclose their experiences out of concern for repercussions. These findings suggest that integrity risks exist within the permitting process."

Against that backdrop, the General Audit Chamber has published its report “Performance Audit on the Building Permit Process,” which looks at whether the current system supports efficiency, legal compliance, and integrity. The audit responds to years of complaints about lengthy delays, inconsistent decisions, and the perception that political or personal connections can influence whether and when a permit is granted. The Chamber concludes that many of these concerns are rooted in how the system itself is designed and managed, not only in individual behavior.

What the Audit Chamber says is wrong with the system

The audit finds that the Permits Department works under difficult conditions and within a legal framework that is fragmented and outdated. Building permits still rely on the 1935 Building and Housing Ordinance, supplemented by the National Ordinance on Spatial Development Planning and the National Ordinance on Hindrance, while key policy tools like the Beach Policy, Hillside Policy, and Parking Policy remain non binding and are not anchored in law. An island wide zoning plan has been discussed for years but has not yet been finalized.

Applications are registered in government’s JOIN system, but most of the processing happens outside that system, through physical files in brown envelopes and email exchanges. The result is a process that is hard to monitor, vulnerable to lost or delayed files, and lacking a reliable audit trail. Advice from expert bodies such as the Fire Department and Inspection Department is important for public safety and infrastructure planning, yet the absence of uniform procedures means those inputs are not always handled in a consistent way.

Capacity is another problem. The Permits Department has a small team, and the job descriptions do not require the technical qualifications that would normally be expected for assessing construction plans in a complex environment. During the audit period, the Fire Department had just one staff member reviewing all building permit requests. These shortages contribute to backlogs and also affect the quality and defensibility of decisions.

In light of these findings, the General Audit Chamber calls for a broad modernization of the system: updating the legal framework, introducing written procedures for each step in the process, requiring the Minister to formally motivate any deviation from internal or expert advice, revising the function book to require domain specific expertise, training staff, and automating the permitting workflow so that every action is time stamped, traceable, and visible to applicants.

The rest of this article examines what the underlying report reveals about how the permit process currently works, where the main risks lie, and what is at stake if reforms do not follow.

A legal framework that has not kept pace

The report describes a legal framework that has not kept up with modern construction standards or the development pressures on a small and densely built island. Building regulations rest largely on the 1935 Building and Housing Ordinance, even though newer tools like the National Building Decree and the VROMI Staff Manual were intended to bring standards up to date. The island still lacks a binding, island wide zoning plan, despite work on such a plan being underway for several years.

Policies that are central to the daily work of the Permits Department, such as the Beach Policy (1994), the Hillside Policy (1998), and the Parking Policy (2016), exist in a gray zone. Officials refer to them and attempt to apply them, but none of them has the force of law. They rely on broad clauses in the 1935 ordinance that allow permits to be denied if a building is deemed a nuisance or disfigures its surroundings.

A table in the report sets this out plainly: each of the three policies is marked as “not legally anchored” and tied back to the 1935 ordinance, with risks that range from outdated standards to inconsistent enforcement and subjective approvals.

The consequence is that staff often have to interpret these policies case by case. Application of the rules can vary depending on the political leadership of the day, and there is no structured mechanism to record or justify deviations from policy. This environment is fertile ground for accusations of unequal treatment and favoritism.

A paper driven workflow with weak controls

The process diagram in the report shows a convoluted route from application to ministerial decision, moving through intake, inspection, evaluation, internal reviews, and finally the Minister’s desk. At each step, pieces of the file are handled manually.

JOIN, the digital system, is used mainly for registration and archiving. It does not automate the routing of files, send alerts, or give applicants a way to track progress. During the audit, JOIN records were not consistently updated, which means management could not rely on them for accurate information about workloads or timelines.

The intake stage already contains serious control weaknesses. One Technical Administrator handles intake, scanning, completeness checks, and initial registration. Some large drawings are not scanned; they stay only in the paper file. Files move around in brown envelopes without digital timestamps. There is no transparent system for assigning applications to evaluators and no supervisory review of intake decisions. The risk matrix in the report labels this combination of factors as both operationally inefficient and sensitive to fraud because it allows manipulation or disappearance of files without a clear trail.

Later in the chain, evaluators can physically reorder files, hold them back, or move them forward, which can affect who is served first. Staff who do not have a formal role in the process can access or copy files. Physical destruction or loss of files leads to permanent gaps in the record. These are all identified as potential vectors for biased treatment, integrity breaches, and public distrust.

The Department Head, who at the time of the audit also served as an evaluator, is responsible for oversight but is not required to have a technical background and has no digital tools to monitor workflow or performance in real time. This combination of roles narrows the distance between those who evaluate files and those who are supposed to supervise them.

Above the department, the Secretary General reviews files before they go to the Minister. The Secretary General is also not required to have technical expertise and relies heavily on the department’s advice. The report notes that without a structured checklist or clear standards, this review risks becoming a formality. At the top, the Minister retains full authority to approve or reject permits and can deviate from expert or departmental advice without any legal obligation to explain why in writing.

From a fraud and governance point of view, that absence of a formal motivation requirement is pivotal. It means decisions that go against professional advice can occur in a way that is opaque to both the public and internal oversight.

External advice that can be sidelined

The report also reviews how external advisory bodies feed into the permit process. The Fire Department, Inspection Department, Policy Department, and Hindrance Department all have roles, although capacity is often limited.

The Fire Department is responsible for reviewing plans for compliance with fire safety standards. Reviews typically take three to four weeks, but during the audit period the department had only one full time employee handling all permit related checks. Fire safety advice is written and archived but is not integrated into JOIN, and it is not binding on the Minister. The Fire Department is often not informed of final decisions, even when its advice is not followed.

The report cites concrete examples where large projects proceeded without any fire plan ever being submitted, or where initial negative advice was later bypassed or only partially addressed. In such cases, residents, workers, and emergency responders carry the risk, while the government carries legal and moral responsibility.

The Hindrance Department, which looks at noise, dust, traffic disturbance, and similar issues, consisted of a single staff member at the time of the audit, and the function book does not require a technical background for this position. Policy advice on beach protection, hillside construction, and parking is limited by the non binding nature of the underlying policies and the absence of a zoning plan.

Across these advisory functions, the same patterns appear: lack of written procedures, limited staffing, non binding advice, and no automated system to make sure expert input is systematically logged, followed up, or consciously overruled with a written motivation.

What happens when advice and policy are ignored

One chapter of the report looks specifically at the risks of deviating from established policies and expert advice, especially when those deviations are not documented.

The identified consequences include:

• Safety and environmental risks: Building contrary to hillside and beach policies increases the chances of landslides, erosion, flooding, and hurricane damage. These are not isolated problems, they can affect entire communities and public infrastructure, while leaving government with large response and recovery costs.
• Public nuisance and infrastructure strain: Permits that ignore parking policy aggravate congestion, limit access for residents and emergency services, and erode the quality of urban life. Over time, unmanaged congestion can discourage investment and tourism and deepen public frustration with government planning.
• Fire safety: Approving projects without adequate fire safety provisions or against expert advice carries the risk of catastrophic outcomes in the event of an incident. The lack of a legal requirement to explain why such advice is overridden further weakens accountability.
• Governance and fraud risks: Undocumented deviations open the door to selective enforcement and political favoritism. Combined with informal communications and paper files, this raises the likelihood that advice is delayed, reshaped, or set aside for reasons that are not documented. Allegations that some files can be expedited through informal channels are consistent with this risk profile.
• Legal exposure: Even when policies are not binding law, decisions that lack careful preparation and clear motivation are vulnerable in court under general principles of good governance. Poorly documented decisions weaken the country’s legal position when permits are challenged.

The report concludes that without stronger rules, formal procedures, and automation, the system will remain vulnerable to undue influence and arbitrary decision making.

What the public thinks of the system

The Audit Chamber’s survey among permit applicants paints a picture of a process that is widely seen as inefficient and opaque. Of 89 respondents, 75 percent said they were dissatisfied with the efficiency of the process from application to approval. A significant number cited uncertainty about timelines and a lack of clear communication.

Seven respondents reported being approached with an offer to speed up their application in exchange for a payment or favor. The Chamber notes that because people may be reluctant to report such experiences, this figure is likely an undercount, yet it is sufficient to confirm that such practices exist.

Respondents also expressed strong support for incorporating environmental and energy considerations into permit evaluations. A clear majority said that environmental impact and energy use should be important factors in the process. This aligns with St. Maarten’s commitments under the Sustainable Development Goals, particularly around sustainable cities and climate action.

Recommendations

The Audit Chamber’s recommendations form a coherent reform agenda:

1. Create written standard operating procedures for all steps, from intake to ministerial decision and possible deviations.
2. Automate the workflow, so applications, advice, and decisions are routed electronically, time stamped, and traceable, and applicants can monitor progress themselves.
3. Update and consolidate the legal framework, including modernizing the 1935 ordinance, integrating spatial policies into binding law, and finally implementing a zoning plan.
4. Require written justification whenever the Minister deviates from departmental or expert advice and record those justifications in the system.
5. Align staffing with technical demands, by revising the function book to require domain specific expertise and by providing structured training and certification.

The report argues that automation is not only a matter of convenience. It is central to building integrity into the system. A fully digital, rules based process would create a permanent audit trail, limit opportunities for informal interventions, and provide data that management and oversight bodies can use to identify bottlenecks and unusual patterns.

In its epilogue, the Audit Chamber notes that the Ministry is preparing for an island wide zoning plan and that this is an opportune moment to make the permitting system more transparent, consistent, and resilient. It also records that the Minister of VROMI did not submit a response to the report, even though the Chamber’s protocol offers that opportunity.

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