Press Releases

Comptroller reveals failures in the audit of AAFAF

San Juan, Puerto Rico (August 18, 2026) – The Comptroller of Puerto Rico, CPA and Attorney Carmen Vega Fournier, published today the audit report covering the period from July 1, 2020 to June 30, 2024, on the fiscal operations related to the bond issuances and refinancings carried out by the Commonwealth of Puerto Rico, the Government Development Bank for Puerto Rico, the Puerto Rico Public Finance Corporation, the Puerto Rico Public Buildings Authority (AEP), the Puerto Rico Infrastructure Financing Authority, the Puerto Rico Sales Tax Financing Corporation (COFINA), the Puerto Rico Highways and Transportation Authority (ACT) and the Puerto Rico Electric Power Authority. The examination of the transactions related to bond issuances and refinancings included the analysis of the payment of lines of credit and of interest amounting to billions of dollars, for the purpose of evaluating whether the operations were carried out in accordance with applicable laws, regulations and policies.

The audit identified that 98% of the funds received from the bond issuances examined was applied to the payment of debts, notes and lines of credit, while 2% was used for capital improvements. It also revealed that several refinanced issuances did not generate the expected savings, resulting in losses of $123.2 million, and increases of $3,360 million in the cost of debt service from bond refinancing. Likewise, significant deficiencies were identified in the evidence provided by the entities. In particular, it was not possible to corroborate the use of $1,934,862,171 in funds from bond issuances, and of $9,035,992,022 from lines of credit and other debts, whose supporting documents were not provided. The lack of evidence made it impossible to confirm whether the disbursements were made for the authorized purposes.

The report details that, in multiple instances, the documents essential to evaluating the transactions were not available, were incomplete, or were not preserved as required by Regulation 4284 of 1990. The absence of documentation affected the evaluation of the use of funds at entities such as the Department of Treasury, the Puerto Rico Fiscal Agency and Financial Advisory Authority, COFINA, the AEP, and the ACT. It also limited the Government's ability to justify decisions related to refinancings, deposits in reserve funds and financial operations.

Among the effects identified, the report notes significant increases in the cost of the Government's debt service, losses from refinancings and disbursements without evidence of fiscal benefit. The causes include increases in operating expenses, funds not used for the authorized purposes, and deficiencies in the preservation of the documents necessary to justify the reasonableness of the expenditure or the refinancing.

The report also includes recommendations aimed at strengthening internal controls and improving fiscal transparency. Among them, the entities are urged to ensure the proper preservation of all evidence related to issuances and refinancings; to establish uniform documentation and evaluation processes; to comply with the requirements of the applicable regulations; and to guarantee that future decisions on the public debt are supported by complete financial analyses, comparisons of alternatives and verifiable documentation. In addition, the Comptroller urged officials and boards of directors to implement corrective measures to address the situations identified and prevent recurrence.

"These findings reflect the importance of responsible financial administration, complete documentation and uniform processes to ensure that all government activity is carried out with the greatest transparency, integrity and benefit to the public interest," said the Comptroller.

Audit Report OC-27-19 is available at ocpr.gov.pr.