Office of the Comptroller presents significant findings in an audit of ADSEF on the management of PAN funds and deficiencies in internal controls
San Juan, Puerto Rico – (April 9, 2026) The Comptroller of Puerto Rico, Attorney Carmen A. Vega Fournier, CPA, reported today the publication of the Audit Report OC-26-12, corresponding to the Socioeconomic Development Administration for the Family (ADSEF), attached to the Department of the Family, which covers the period from January 1, 2017 to August 31, 2024.
“The analysis carried out by the auditors -for the years from 2017 to 2024- revealed that payments were made to deceased beneficiaries before the closing of their cases, that some cases remained active even after the death of the participants and that payments were made to family units without timely adjusting the composition of the household after the death of one of its members. Likewise, significant failures were identified in the supervision of transitional residence institutions authorized to manage PAN benefits, in which transactions were detected with funds for the purchase of ineligible items, such as alcoholic beverages, clothing, electronic items, gasoline and other expenses unrelated to food,” explained Vega Fournier, who is an attorney and Certified Public Accountant (CPA).
The Nutrition Assistance Program (PAN) offers economic aid to families without income or with limited income so that they can supplement their food needs. This aid is granted in proportion to the number of people in the family household. For the distribution of funds and the determination of PAN benefits, ADSEF is governed by the provisions of Regulation 8684 of 2015.
The report, carried out in compliance with the constitutional and legal powers of this Office, contains an adverse opinion, which means that the evaluated operations were not carried out, in all significant respects, in accordance with applicable law and regulation, particularly in areas related to the administration of the Nutrition Assistance Program (PAN) and the supervision of participating institutions.
“The issuance of an adverse opinion reflects material deficiencies in internal controls and in compliance with legal and regulatory provisions. Our duty is to present these findings with objectivity to foster corrective actions and strengthen public administration,” expressed Comptroller Vega Fournier.
“The examination carried out revealed that, from January 3, 2017 to August 28, 2024, ADSEF made 988,617 payments in PAN benefits totaling $150,663,786 to 38,618 participants [1], whose social security number was identified in the Death Registry as deceased persons.
Of the 38,618 participants, we evaluated the information of 385[2], to whom 10,700 payments totaling $1,623,280 were made, from January 4, 2017 to August 22, 2024. This, to determine the status of the cases. Our evaluation revealed that 351 (256 + 95) cases were closed and 34 remained active, as indicated:
These situations were associated, among other factors, with deficiencies in the information validation processes and weaknesses in internal controls, which allowed the issuance of improper payments and affected the reliability of the System, emphasized the Comptroller of Puerto Rico.
“Currently, the Department of the Family and the Department of Health and its Demographic Registry office have an agreement so that they can access the platform of the ‘State and Territorial Exchange of Vital Events’ (STEVE) system, which is a data exchange system managed by the Demographic Registry of the Department of Health that allows states and territories to obtain reliable information from vital records (births and deaths),” emphasized the Comptroller of Puerto Rico.
The report also notes significant deficiencies in the supervision of transitional residence institutions. In particular, it was determined that ADSEF could not supply 36 quarterly reports required for evaluation, did not suspend the authorization of institutions that failed to submit reports for prolonged periods and did not adequately verify the use of the funds.
“Likewise, transactions with PAN funds were identified for the purchase of ineligible items, as well as deficiencies in the documentation, including illegible receipts or absence of evidence, which limits the oversight capacity. These deficiencies foster an environment of risk for the misuse of public funds and could expose the Government of Puerto Rico to findings or sanctions by federal entities,” revealed the audit report.
The report includes comments from ADSEF management, in which it is acknowledged that extraordinary events such as hurricanes Irma and María, the earthquakes in southwestern Puerto Rico and the COVID-19 pandemic significantly affected the operational capacity of the Government and the continuity of administrative processes. Likewise, it is noted that budgetary restrictions, the reduction of personnel and other structural factors impacted the agency's supervision and oversight capacity.
Similarly, the Comptroller indicated that the current agency has demonstrated a willingness to address the findings through the formalization of agreements with the Demographic Registry, the strengthening of internal processes, the implementation of information validation protocols and the development of a Corrective Action Plan aimed at improving efficiency, transparency and compliance.
The Office of the Comptroller issued recommendations aimed at strengthening internal controls, ensuring the continuity of the interagency agreements for the validation of death data, assigning the necessary personnel for the effective oversight of the program, reviewing the current regulations and conducting the investigations and recovery efforts that correspond.
“We reiterate our call for the diligent implementation of the recommendations issued, of which I know that many are currently being executed. The proper administration of social assistance programs is essential to guarantee that public resources reach the populations that truly need them and thereby avoids consequences from state and federal agencies,” concluded Comptroller Vega Fournier.
Recommendations from the Report:
Consider the situations commented on in Findings 1 and carry out the processes deemed pertinent.
Consider the situations commented on in Findings 1 and carry out the processes deemed pertinent.
Consider the situations commented on in Finding 1 and carry out the processes deemed pertinent.
Take the necessary measures to ensure that the administrator of ADSEF complies with the recommendations and that situations such as these are not repeated.
Issue instructions to the Integrity Division to conduct the corresponding investigations of the cases of participants with the social security number of deceased persons to whom ADSEF made PAN benefit payments, and of the institutions that used the PAN funds to make purchases unrelated to food. In addition, obtain the necessary legal advice to carry out any recovery effort.
The full report is available on the official portal of the Office of the Comptroller of Puerto Rico at www.ocpr.gov.pr
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[1] Eleven participants belonged to three institutions mentioned in Finding 2-a.1).
[2] Two hundred ninety cases were of sole beneficiaries and 95 cases of members of family units.
[3] One hundred ninety-four cases were closed due to the death of the sole beneficiary, 1 whereabouts unknown, 53 cases administrative closure by the Central Office, five cases did not cooperate in determining eligibility, 1 case voluntary withdrawal, 1 case voluntary withdrawal due to emigration and 1 case without a closing code.
The Office of the Comptroller reveals improper payments and without a contract for more than On March 26, 2026 we approved the Audit Report OC-26-12. This contains the results of the audit we conducted on the Socioeconomic Development Administration for the Family (ADSEF); to determine whether the fiscal operations were carried out in accordance with applicable law and regulation.
The Audit Report OC-26-12 can be obtained on our website.
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