The U.S. Department of Housing and Urban Development (HUD) announced a temporary halt to disaster aid procurements valued at close to two billion dollars.
The agency cited concerns over potential fraud and abuse in the contracting process as the reason for the suspension.
Governor Albert Bryan Jr. of the U.S. Virgin Islands criticized the move, suggesting it may be politically motivated rather than based on substantive evidence.
The funds in question were allocated to support recovery efforts after recent hurricanes and other natural disasters affecting the territory.
HUD stated that the pause allows for a thorough review of procurement procedures to ensure compliance with federal regulations.
Officials said they will work with territorial authorities to resolve any issues and resume assistance as quickly as possible.
Congressional oversight committees have been notified and may request further information on the review process.