The Office of the Comptroller of Puerto Rico issues a favorable opinion with exceptions on the evaluation of proposals, the contracts awarded and the salary expense reimbursements made by the Bureau for the Promotion of Job Opportunities of the Department of Labor and Human Resources.
The Report reveals that the Incentive Fund, which amounted to $135 million from 2013 to 2015, was used incorrectly. Our auditors examined four contracts classified as arts and culture, and found that the employers, instead of using the wage incentives for newly created positions or maintenance positions (positions already filled by incentivized employees), used them to pay independent contractors or employers who were already participating in the Fund.
For example, Entity A received $95,100 for 85 jobs in theater productions. However, it hired 44 artists as independents and an actor who was also the incorporator and president of Entity B. This latter entity also received $56,500 for 57 jobs in a television project; nevertheless, it hired 59 artists and production staff, one of the contractors being in turn the resident agent and incorporator of Entities C and D.
Likewise, the Bureau awarded $87,600 to Entity C for six jobs in television comedy programs that the employer filled with six independent contractors and $20,722 to Entity D for a sound engineering position that it also filled through a professional services contract.
The one-finding audit concludes that it is evident that the actions of the entities are contrary to the applicable law and regulations, and that the Bureau was aware of and allowed these situations that deviate from the purpose of the Employment Security Act (Act 74 of June 21, 1956).
The Report also comments that the absence of clear and specific clauses in the contracts with the employers of the arts and culture industry does not promote the effective and correct use of the Incentive Funds in accordance with the Employment Security Act.
The Report covers the period from January 1, 2013, to October 31, 2016.
See Audit Report DA-18-05
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