Press Releases

Office of the Comptroller reveals payments of more than $100 thousand to alleged unemployed persons in the Head Start programs of Cayey

The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Head Start and Early Head Start Programs of the Municipality of Cayey. A qualified opinion is issued when the noncompliances, individually or together, are significant but not pervasive.

The Report reveals that the Municipality of Cayey paid $109,898 in unemployment benefits to 66 employees of the Head Start and Early Head Start programs, who did not qualify to receive this benefit because they were working. The Finance director did not supervise the pre-intervention and disbursement processes, since he certified to the Department of Labor that those unemployment payments for the period from December 13, 2017, to November 14, 2018, were correct. In this regard, the Office of the Comptroller recommends to the Secretary of Labor and Human Resources that he take the appropriate measures with respect to these payments.

The three-finding audit notes that the Municipality was forced to pay $9,757 in interest to the Department of Labor for failing to comply with a payment plan formalized in 2019 to pay a debt of $208,877, for unemployment benefits. Unemployment payments are subject to interest, penalties, and surcharges. This situation of unnecessary interest payments is attributed to the fact that the Municipality did not have the budget for the unemployment payment of these program employees, and did not request in time a transfer of funds from the Administration for the Comprehensive Care and Development of Children (ACUDEN).

Contrary to the current law and regulations, the Municipality paid $107,117 in excess to a contractor awarded a bid for electrical and welding services. This service had to be paid by hour worked and not by square foot, as established in the bid and in the contract. In addition, the welding service was awarded to the same bidder who obtained the electrical service, even though another bidder had submitted a substantially more economical proposal. This price difference represented a payment of $34,952. This situation undermines the credibility of the awarding process and would have harmed the Municipality if the other bidders had challenged the Bidding Board's decision.

Also, these findings were referred to the United States Department of Health and Human Services, Office of Inspector General, Puerto Rico Field on May 24, 2021. In turn, this entity referred the situations for the consideration of the Regional Program Manager for Region II, Administration for Children & Families, US Department of Health & Human Services. At present, it is pending resolution.

The auditors identified that the Municipality of Cayey paid $533,483 in excess of what was contracted to the aforementioned bidder for purchases related to electrical services. According to the applicable rules, it was necessary to amend the $50,000 contract to include the additional amounts for the requested goods.

In addition, the Municipality made improper payments of $15,815 to one of the companies supplying food and disposable utensils for the Head Start and Early Head Start centers and other municipal units. The Finance director did not obligate the budget appropriations at the time they were granted but rather five months later, and in fact, an amendment to the contract was formalized with retroactive effect to increase the amount.

The budget of the Head Start and Early Head Start programs from 2017 to 2020 was $6,233,314, $2,811,132, $4,177,985, and $5,710,457, respectively.

The audit also recommends to the director of the Office of Management and Budget that he ensure that the Municipality of Cayey complies with the Corrective Action Plan of the Office of the Comptroller of Puerto Rico.

This is the second and last report of the Municipality of Cayey, which covers the period from January 1, 2017, to June 30, 2020.

The Audit Report OC-25-17 can be obtained on our website: www.ocpr.gov.pr.