The Office of the Comptroller of Puerto Rico published the result of an investigation into the granting of economic incentives to small and medium-sized enterprises (SMEs) affected by COVID-19. The Legislative Assembly of Puerto Rico allocated $60 million to the Department of Economic Development and Commerce of Puerto Rico to grant an incentive of up to $1,500 to SMEs affected by the emergency decreed by COVID-19. In addition, the Joint Resolution provided that the incentive would be granted in accordance with the parameters determined by the DDEC in consultation with the Department of Treasury.
The investigation revealed that 130 disbursements of $143,000 were made in excess, due to duplicated and even quintuplicated incentive applications. In addition, the auditors found 1,064 applications filed for $1,081,500, without the Merchant Registry number or with the incorrect number. The merchant number was also not included in the electronic data of the disbursements.
On the other hand, the DDEC paid $1,086,500 in excess of the allocation of the Joint Resolution, to 9,204 approved incentive applications. In addition, contrary to the Accounting Manual, the DDEC Finance Office had not prepared the bank reconciliations of the account used to make the payments.
These situations prevented the DDEC and the Office of the Comptroller from verifying in all their details the legality, accuracy and correctness of the disbursements. In addition, they may foster the use of funds for purposes unrelated to public management.
It is recommended that the secretary of the DDEC take the appropriate administrative measures and evaluate the possibility of collecting the incentives paid in excess. In addition, the secretary must ensure that the director of Finance prepares monthly the bank reconciliations of the account of the Economic Incentive Fund Act 60-2019, to determine the correct amount of the disbursements issued for the incentive. The result of this investigation is dated December 9, 2022.
See the Investigation Report RIQ-DIE-23–07.
To see other published reports, visit our section of Audit Reports.
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