The Office of the Comptroller of Puerto Rico issued a qualified opinion of the operations of the Federal Surplus Property Donation Program of the General Services Administration. Act No. 28 of 1979 designated the GSA to implement and administer this federal program. A qualified opinion is issued when the noncompliances, individually or in the aggregate, are significant but not pervasive.
The Report reveals that the Program donated five electricity generators to the GSA without a written request, but rather a verbal order from the administrator of the GSA to the director of the Program. Said generators had previously been requested by the mayors of Loíza and Morovis to address the emergency of Hurricane Irma.
Our auditors could not determine the use that was given to these generators at the GSA. In fact, the GSA returned the five generators to the Program on March 8, 2018 because they were not using them. Two months later, three generators were delivered to the Municipality of Loíza and two to the Municipality of Morovis.
The four-finding audit found that inspections were not performed on 14% of the donated property and took up to 13 months to verify whether the property had been used in the first year since its donation. Some of these situations were also commented on in a report of the federal agency General Service Administration.
From the inspection performed on 17% of the donated units, we found that two generators, a reclaimer refrigerator, and a photographic projection equipment had not been used. The donees indicated that they did not have the economic resources to acquire parts that the property was missing or that the equipment turned out to be sophisticated. These situations lead to the deterioration of the property due to lack of use and prevent other donees from benefiting.
The Report notes that the Office of Internal Audit has not performed the annual audit of 2017-18, as provided by Act 28. In addition, the Advisory Board was not constituted from March to August 2018 and for a year has not had the members required by regulation.
The audit comments that the Program canceled the transfer of 20,833 pallets of water at a cost of $22 million, declared surplus by the Federal Emergency and Management Agency (FEMA). Although the expiration date of the bottles was September 2019, the first donees complained of their bad taste. After a verification by the Department of Health and personnel of the Food and Drug Administration, they indicated that the water could not be distributed since it could be contaminated.
Another Special Comment indicates that Act No. 28 has not been updated in accordance with the amendments incorporated into the Federal Property and Administrative Services Act of 1949.
The Report covers the period from May 1, 2016 to August 31, 2018.
See Audit Report DA-19-12.
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