Press Releases

Comptroller of Puerto Rico reveals deficiencies in the management and follow-up of capital advances at the Public-Private Partnerships Authority and COR3

San Juan, Puerto Rico, (April 17, 2026) – The Comptroller of Puerto Rico, Attorney Carmen A. Vega Fournier, announced today the results of the Audit Report OC-26-17 on the computerized information systems of the Central Office for Recovery, Reconstruction and Resiliency of Puerto Rico (COR3, for its acronym in English), a division of the Public-Private Partnerships Authority of Puerto Rico, which covers the period from December 10, 2020 to February 12, 2025.

The report issued a qualified opinion, having determined that, although operations were carried out in all significant respects in accordance with applicable law and regulations, deficiencies were identified in the follow-up processes for subrecipients that received capital advances under FEMA-funded programs.

The audit identified deficiencies in the monitoring process of the capital advances granted through the pilot program Request for Working Capital Advance (RFCA), implemented by COR3 to provide liquidity to subrecipient entities in recovery projects. These advances, which may reach up to a maximum of 75% of the estimated cost of the projects, are subject to strict follow-up and expense justification requirements.

The examination revealed that, as of September 11, 2024, there were 974 projects referred to the Compliance Division, of which 504 had not submitted reimbursement requests, despite having received capital advances of $747,673,335 between June 2022 and September 2024.

In addition, in a sample of 30 projects evaluated, it was determined that, in 28 of them, the Compliance Division did not carry out the follow-up within the established terms. In 27 of these cases, the initial non-compliance notifications were not sent within the required term, with delays of between 7 and 401 days recorded, even though $8,871,876 in advances had been disbursed.

Likewise, a case was identified in which, 133 days after the expiration of the required term, no non-compliance notification was sent to a subrecipient that did not submit the reimbursement request and had received $857,838 in advances.

The Office of the Comptroller noted that these deficiencies thus affected COR3's ability to maintain effective control over projects financed with federal funds and may impede the achievement of the recovery and reconstruction objectives for which the resources were allocated. It also stressed that the lack of timely follow-up limited the Government's ability to ensure the proper use of public funds.

In its comments, COR3's management indicated that the situations are related to the implementation of a pilot program under development, as well as the lack of knowledge on the part of some subrecipients in the management of federal funds. In addition, it noted that adjustments were made to the procedures to strengthen controls and improve monitoring of the program.

Management also expressed disagreement with the report's conclusions, maintaining that the entity has maintained effective internal controls and has worked continuously to ensure compliance with federal requirements, even in the context of the challenges associated with the recovery process following the natural disasters.

Nevertheless, the Office of the Comptroller of Puerto Rico (OCPR) determined that the finding prevails, as there was no evidence of compliance with the terms established in the applicable regulations nor the necessary documentation to justify exceptions in the follow-up processes.

As a result of these findings, the Office of the Comptroller issued recommendations addressed to the Authority's Board of Directors, to the executive director of the Authority and to the executive director of COR3. These include providing guidance to subrecipients on the management of federal funds, strengthening the follow-up and compliance processes, and the obligation to maintain written documentation supporting any exception authorized by FEMA or by management.

“The deficiencies noted in this report evidence the need to strengthen the follow-up and control mechanisms to ensure that the allocated resources fulfill their purpose of reconstruction and mitigation. Transparency, accountability and strict compliance with the regulations are essential to protect public funds and guarantee effective results for our people,” stated the Comptroller.

The full report is available on the official OCPR website www.ocpr.gov.pr.