Comptroller reveals unnecessary payments for insurance coverage in System 9-1-1
The Office of the Comptroller of Puerto Rico issued an adverse opinion on the operations of the Bureau of 9-1-1 Emergency Systems of the Department of Public Safety of Puerto Rico. The tests performed and the evidence revealed that the operations of the Bureau covered by this Report were not carried out in accordance with applicable law and regulations.
The Report reveals that the Bureau disbursed $24,175 for unnecessary insurance coverage from 2015 to 2021; that is, $9,000 to insure works of art that it did not have, $2,931 for the premium of a facility it did not occupy, and $12,244 in an endorsement of subsequent coverage, for the same facility it did not occupy. This situation is attributed to the fact that the director of Administration did not update the inventories of the insurable properties, nor did she send them to the insurance producers before formalizing the policies. The director of Administration did not understand the content of the policies since she did not have the academic preparation on insurance.
The two-finding audit notes that facility 4 of the Bureau did not have a structure coverage policy for two years. The insurer authorized including facility 4 in the general coverage in effect on March 12, 2021, by endorsement.
These situations were referred to the Office of the Insurance Commissioner on July 6, 2023, so that it takes the corresponding measures.
The auditors identified that the Bureau lacks regulations to administer the insurance. As of August 17, 2021, there were no rules to, for example, annually send the list of properties and risks to the Public Insurance Area at Treasury, notify the producer of any change in properties, or designate the authorized official to request changes in the insurance.
The Report notes that the administrator of the Area did not ensure that the producer trained the Bureau's personnel or that the producer made the Area's personnel participants in the meetings with the Bureau. In addition, the Area administrator also did not corroborate with the Bureau the correctness of the premium increase for the structure coverage of $3.3 million.
From 2016 to 2019, the financial statements audited by certified public accountants reflected that the Bureau obtained own income of $85,762,777, incurred operational expenses of $84,997,850, and had a non-operational loss of $9,226,637, which resulted in a deficit of $8,461,710.
The audit recommends that the secretary of Public Safety give instructions to the commissioner of the Bureau, so that he ensures compliance with the recommendations of the Comptroller's Report.
This second report covers the period from January 1, 2017, to January 31, 2022, and is available at www.ocpr.gov.pr.
The Audit Report OC-24-59 can be obtained on our website: www.ocpr.gov.pr.
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