The Office of the Comptroller of Puerto Rico issued an adverse opinion of the fiscal operations of the Joint Special Commission on Legislative Funds for Community Impact (Commission). The tests performed and the evidence in the possession of the Office of the Comptroller revealed that the operations were not carried out, in all significant aspects, in accordance with the applicable law and regulations.
From July 1, 2016 to June 30, 2019, donations of $61 million were authorized to 834 nonprofit organizations.
The Report reveals deficiencies in 72% of the nonprofit entities examined, among others due to the lack of an accounting system, the absence of an effective filing system, or not having a registry of signatures of the persons authorized to sign the Commission's documents.
In addition, the Commission's analysts did not adequately oversee the legislative funds awarded. For example, from the sample examined, 530 transactions for $336,558 were authorized in 44% of the organizations without justification for the disbursements; $68,457 was paid for unauthorized purchases and services in 12% of the entities; and the analysts did not inspect the 20% of organizations that received $250,026 in legislative funds.
In particular, the Comptroller's auditors found expense reimbursements with an administrator's personal credit card, without the Commission's prior authorization or evidence of what was purchased; purchases of construction materials for permanent improvements not allowed in the Regulation; and payments for trainings to an executive director who was at the same time the president of the organization.
The two-finding audit also notes that 60% of the organizations evaluated did not have complete files. The files examined lacked, among others, the entity's strategic plan, the operational budget, the negative debt certification from the State Insurance Fund Corporation, and the debt certification from the Department of the Treasury.
This situation is attributed to the fact that the Commission's executive directors did not ensure that the analysts corroborated that the organizations presented all the required documentation. In addition, it has the effect that organizations that do not comply with the requirements to receive the funds are recommended to the Legislative Assembly.
This second and final report on the Joint Special Commission on Legislative Funds covers the period from January 1, 2015 to June 30, 2021.
Audit Report DA-23-13 can be obtained on our website: www.ocpr.gov.pr.
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