The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Local Workforce Development Area (ALDL) – San Juan. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant but not pervasive.
The Report reveals that, in 33% of the contracts evaluated by our auditors, occupations were included that did not form part of the occupational demand market, such as production assistant or lighting and sound technician. In fact, the participants referred by the occupational counselor to receive said training actually performed tasks as cook and administrator of one of the tapas and equestrian businesses of the contracted employer.
In addition, the ALDL San Juan also did not require from the employer the monthly evaluations of the contract participants. From 2014 to 2017, the ALDL San Juan had formalized 1,379 contracts for $21 million.
The six-finding audit notes that a participant with prior work experience was referred to a work experience for which he did not qualify. This situation deprived other people who did qualify of acquiring work experience; in addition, the payments may be questioned for not meeting the established requirements.
Contrary to the regulations in force, the ALDL San Juan did not carry out a formal request-for-proposals process to lease a commercial building for $419,930 for office use. The executive director certified that three proposals were obtained verbally and no market study was conducted to determine the lease rate, nor were the building selection criteria documented. These situations give the appearance of favoritism and prevented a transparent competitive process from being carried out.
The report evidences multiple deficiencies in the reconciliation of the checks recorded in the mechanized accounting systems ORACLE and MIP Fund Accounting. This situation had been commented on in the audited financial statements from 2013 to 2016 and in the Final Monitoring Determination of the Administrative and Financial Systems Program Year 2014-15.
The ALDL San Juan did not carry out fiscal and compliance monitoring of the projects sponsored with funds authorized under the Workforce Investment Act of 1998. These functions had not been established, a fact that prevented the ALDL San Juan from carrying out monitoring to ensure the proper use of the funds.
The compliance audit found that the acting secretary of the Workforce Development Board did not keep under his custody the original minutes of the meetings, but rather filed them at the Municipal Finance Office. This situation is attributed to the fact that the secretary departed from the applicable regulations and the president of the Board did not supervise said tasks.
The Report comments that the Municipality's Internal Audit Office had not conducted audits of the susceptible and material areas such as the purchases and disbursements of the ALDL San Juan. A similar situation had been commented on in Audit Report M-14-49 of 2014.
The audit recommends that the executive director of the Office of Management and Budget, and the director of the Workforce Development Program, ensure that the ALDL San Juan complies with the Corrective Action Plan established by the Office of the Comptroller of Puerto Rico, among others.
The Report covers the period from January 14, 2013 to June 30, 2017
See Audit Report M-21-01.
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