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Audit detects Nutrition Assistance Program (PAN) participant claims with false information during the COVID-19 pandemic

The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Administration for the Socioeconomic Development of the Family of the Department of the Family (ADSEF). A qualified opinion is issued when the individual or combined instances of noncompliance are significant, but not pervasive.

The Report reveals deficiencies in the spaces designated in the local offices to file the records of the beneficiaries of the Nutrition Assistance Program (PAN). The auditors inspected 20 of the 88 local offices and identified that 18 do not have sufficient space, shelves and drawers, or do not have automatic sprinklers, or smoke detection systems, or present mold and moisture on the walls, among others (see photos in the Report). These situations favor the loss and deterioration of the records, prevent adequate control, and pose a risk to the health of the employees.

The two-finding audit notes that 70 local offices do not have a clerk in charge of the files; instead, the function of organizing, locating and delivering the records is carried out by other employees. A similar situation had been noted 10 years ago in Audit Report DA-14-45 of May 21, 2014.

The auditors detected deficiencies with the control of the data and its recording in the system. For example, 122,732 participants were identified on 251,866 occasions with “active” status who were claimed by several PAN beneficiaries. In addition, it was determined that, during the pandemic, 650 participants were claimed by more than one head of household. Other related findings reveal accounts without the social security number of heads of household with the same mailing address, or the lack of uniformity in the recording of the data.

The Case System lacks an appropriate data-entry control. This system, which was created in 1980, has not been updated with the requirements of the Federal Information Security Modernization Act of 2014. These deficiencies were referred to ADSEF on February 13, 2024 so that they take the corresponding actions.

On the other hand, the Report comments on situations related to PAN participants who gave false, incomplete or incorrect information to obtain benefits for $201,209 during the COVID-19 pandemic. From a sample of records of 50 heads of household, 17 were detected that did not report part or all of their income; seven heads of household omitted to include that they owned more than one vehicle; three heads of household included participants who did not reside with them; four heads of household submitted the same utility bill as proof of residence; and one head of household received benefits despite being held in a detention center.

These findings were referred to ADSEF which, as of the date of this Report, had determined in all cases a recovery claim or a benefit adjustment. The Report also recommends that the Federal Prosecutor's Office and the Food and Nutrition Services take the measures they deem pertinent.

ADSEF's funds come from joint resolutions of the general budget, special appropriations and federal contributions. From fiscal year 2017 to 2023, ADSEF has received $21,170,587,186 in funds. In addition, it had expenses amounting to $19,326,795,832, for a balance of $1,843,791,354.

This ADSEF report covers the period from January 1, 2017 to March 31, 2023.

Audit Report OC-24-56 is available on our website: www.ocpr.gov.pr.