Press Releases

Department of Labor and Human Resources
Puerto Rico Employment Security Bureau

The Office of the Comptroller of Puerto Rico (OCPR) issued an adverse opinion on the operations of the Employment Security Bureau of the Department of Labor and Human Resources. The tests performed and the evidence revealed that the operations related to the process of approving Pandemic Unemployment Assistance (PUA) benefits and payments, the operations of the Special Paying Officers (OPE), as well as the elimination of the contestable points, among others, were not carried out in accordance with the applicable law and regulations.

The Report reveals that $12,731,035 of PUA and FPUC – Federal Pandemic Unemployment Compensation funds were disbursed to 1,039 beneficiaries with the Social Security numbers of deceased persons. From the examination performed on the process of evaluating and approving the applications, the Department of Labor also did not validate the identity of the beneficiaries, the income forgone, the information provided about self-employment work, or the identity of the persons who worked the cases. These situations give rise to fraud schemes and to issuing payments to those who do not meet the requirements.

The OCPR could not determine whether convicted persons received PUA benefits for which they did not qualify. The Department of Correction and Rehabilitation certified that it does not have a computerized system to control the correctional population, and that the process of admission and release of inmates is carried out manually. In this regard, no findings are commented on due to the scope limitations on this audit objective.

On the other hand, the audit notes that the Department of Labor had not designated a person outside the OPE functions to prepare the Special Paying Officer's vouchers. This lack of segregation of functions fosters the commission of errors. A similar situation had been commented on in Audit Report DA-16-13 of November 16, 2015.

As of July 8, 2021, 11 bank reconciliations of the FastPUA system account (PUA Claim and Payment Services- Portal Subscription) for pandemic unemployment payment had not been performed. In addition, for the SABEN system -Automated Benefits System- the bank reconciliations for three months, beginning in March 2020, had been performed up to a year later. The reconciliations must be performed within a period of three business days after receipt of the bank account.

From 2017 to 2021, the OPE had paid unemployment insurance benefits in the amount of $1,372,084,673. From February 27, 2020, to March 17, 2022, disbursements were made to 527,341 PUA beneficiaries totaling $5,463,215,738.

During the pandemic, benefits were approved and paid to claimants who did not meet the requirements. From a sample of the 418,558 contestable points or issues in the claim due to lack of data, it was detected that issues were eliminated without the evidence provided by the beneficiary, nor giving the reasons for eliminating the contestable point. In this regard, it was necessary for the Department of Labor to have a prior control that ensured the legality, correctness, accuracy, and propriety of the fiscal operations.

The Report comments on the multiple delays by the Department of Labor in delivering the requested information and documents. The Comptroller of Puerto Rico, Yesmín M. Valdivieso, notified 45 days in advance by letter the start date of the audit as well as the required documentation. After 21 days from the start of the audit, on January 29, 2021, 13 of the 20 required matters remained undelivered; after 61 days, 12 of the 20 matters remained undelivered, and 222 days later, two of the 20 matters were still pending.

In addition, on May 3, 2021, the Department's chief information officer was requested to provide the databases of the SABEN and FastPUA systems. The information that should have been delivered to the auditors on May 14, 2021, was delivered incomplete on December 14, 2021. The audit recommends to the Secretary of Labor and Human Resources that he ensure that officials or private providers do not obstruct the investigations of the Office of the Comptroller and that they avoid possible criminal violations of Act 37-2004, which classifies as a felony the obstruction, delay, or impeding of the conduct of an audit by the Comptroller of Puerto Rico.

The Department's Internal Investigations and Security Unit (UISI) certified that, as of October 1, 2021, it had referred 323 cases totaling $36,620,171 to the Federal Bureau of Investigation, the Puerto Rico Police, the Special Investigations Bureau, and the Bank Robbery Unit. The UISI directs the investigations of possible internal or external fraud by Department officials or beneficiaries of the unemployment programs.

The Puerto Rico Employment Security Bureau of the Department of Labor and Human Resources had a federal budget of $246,881,782 and made disbursements of $157,660,625 for a difference of $89,221,157 as of June 30, 2023.

This report covers the period from January 1, 2017, to August 31, 2022.

The Audit Report OC-25-15 can be obtained on our website: www.ocpr.gov.pr.