Press Releases

Comptroller reveals control deficiencies with property and the preparation of reports in Recreation and Sports

The Office of the Comptroller of Puerto Rico issued an adverse opinion on the fiscal operations of the Department of Recreation and Sports. The tests performed and the evidence revealed that the operations related to movable and immovable property, as well as the preparation and submission of reports required by law, were not carried out in accordance with applicable law and regulations.

The Report reveals that, as of January 24, 2023, the Department did not have an accurate inventory registry of the sports and recreational facilities. In the nine reports examined by the auditors, discrepancies were identified regarding the number of facilities and their location. The reports reflect between 104 and 733 facilities located among 21 to 59 municipalities.

These deficiencies delayed the process of claiming federal funds from the Federal Emergency Management Agency – FEMA, since the Department and the municipalities petitioned funds for the same properties. In addition, the Department could have issued payments for water, electricity, and property insurance services, without being certain of being the titleholders.

The four-finding audit notes that, in violation of provisions in Act 8-2004, Organic Act of the Department of Recreation and Sports, the National Council for the Linkage of Sports, Recreation, and Physical Education had not been constituted from 2019 to 2021, the National Plan for Recreation and Sports had not been implemented, the Sports Massification Board had not been formed, nor had the Special Fund been created in the Department of Treasury.

These situations deprived the Department of a governing body, of a model of objectives and actions, and limit the allocation of funds and donations to finance recreational and sports activities.

In addition, the Department has a Special Fund for the Development of Minor Categories that is nourished by the balance of unclaimed prizes from the Electronic Lottery. As of February 3, 2023, the secretary had not constituted the Commission for the administration of this Special Fund, the Fund Utilization Reports from 2018 to 2020 were not prepared, nor had the creation of a special account been requested from the Department of Treasury.

On the other hand, from 2019 to 2022, the Department had not rendered to the Legislature the annual reports on the use of the funds for the Development of the Full-Time High-Performance Puerto Rican Athlete. In addition, the Department did not maintain these funds in a separate account for their use as established by law.

The Report reveals that the Department submitted five years late, on July 18, 2022, the 2016 single audit to the Federal Audit Clearinghouse. In addition, as of April 30, 2023, it had not submitted the single audits of 2017, 2018, 2020, or that of 2022. The federal agencies did not have on time the results of the audits performed, which may cause them to take measures such as withholding or suspending federal funds. The Office of the Comptroller had also not received, as of November 14, 2022, copies of the Management letters or of the Single Audits. These situations had already been noted in 2013, in Audit Report DA-14-16.

The audit publishes that the lack of a property officer from 2018 to 2021, and of a substitute between 2018 and 2023, among others, prevented the annual physical inventories from being conducted and the required reports from being prepared. The property officer certified to the auditors that she did not find evidence of the regulatory reports having been issued to the corresponding agencies from 2018 to 2020. A similar situation was noted in Special Report DA-22-03 in 2021.

On the other hand, the examination of the movable property registry lacks required information such as: date of receipt in 15,383 units, purchase order number in 1,945 units, or the acquisition cost in 55 units. This situation does not allow adequate control of the operations and makes it difficult to assign a value to the property, for the preparation of the financial statements.

On the auditors' visit to the Northwest Regional Office located in the Sports and Recreational Training Center (CECADER) at the Ramey Base in Aguadilla, the two buildings were found abandoned, with dirty rooms and deteriorated furnishings. In addition, the equipment, materials, and equipment to be disposed of were kept together with equipment in use, in an open area surrounded by cyclone fence (see photos in the Report). CECADER is one of the nine regional offices of the Department.

The audit notes the adverse opinion that the Department of Recreation and Sports received in the 2016 Single Audit. The certified public accountant questioned disbursements of $1,234,244 related to the Public Housing program. In addition, the Department did not present documents related to the disbursement of $14,223,555 in state funds.

For fiscal years 2018 to 2023, the Department received allocations of $460,104,204, and made disbursements of $330,515,505, for a balance of $129,588,699.

The Report recommends that the Governor, the presidents of the Senate and of the House of Representatives, the secretary of Treasury, the director of the Office of Management and Budget, and the administrator of General Services, consider the situations indicated in the Report and take the corresponding measures. The secretary of Recreation and Sports is recommended to comply with and correct the situations.

This first report of the Department of Recreation and Sports covers the period from January 1, 2018, to April 30, 2023, and is available at www.ocpr.gov.pr.

The Audit Report OC-24-58 can be obtained on our website: www.ocpr.gov.pr.