During the pandemic, the Department of Labor carried out drive-through processes to expedite services.
Photo: Juan R. Costa / NotiCel
An audit report by the Comptroller of Puerto Rico revealed irregularities in the operations of the Employment Security Bureau of the Department of Labor and Human Resources (DTRH).
The tests performed and the evidence revealed that the operations related to the process of approving Pandemic Unemployment Assistance (PUA) benefits and payments, the operations of the Special Paying Officers (OPE), as well as the elimination of disputed points, among others, were not carried out in accordance with the applicable law and regulations.
This report covers the period from January 1, 2017 to August 31, 2022.
The report reveals that $12,731,035 in PUA and FPUC – Federal Pandemic Unemployment Compensation funds were disbursed to 1,039 beneficiaries with the social security numbers of deceased individuals. From the examination conducted on the process of evaluating and approving applications, the Department of Labor also failed to validate the beneficiaries' identity, the income lost, the information provided about self-employment, or the identity of the people who worked the cases. These situations give rise to fraud schemes and to issuing payments to those who do not meet the requirements, the Comptroller stated.
The OCPR could not determine whether convicted individuals received PUA benefits for which they did not qualify. The Department of Correction and Rehabilitation certified that it does not have a computerized system to control the correctional population, and that the process of admitting and releasing inmates is carried out manually. In this regard, no findings are commented on due to the scope limitations on this audit objective.
On the other hand, the audit notes that the Department of Labor had not designated a person outside the OPE's functions to prepare the Special Paying Officer's vouchers. This lack of segregation of duties allows errors to be made, the report adds. A similar situation had been commented on in Audit Report DA-16-13 of November 16, 2015.
As of July 8, 2021, 11 bank reconciliations of the FastPUA system account (PUA Claim and Payment Services- Portal Suscription) for pandemic unemployment payments had not been performed. In addition, in the SABEN system –Sistema Automatizado de Beneficios– the bank reconciliations for three months, beginning in March 2020, had been performed up to a year later. Reconciliations must be performed within three business days of receiving the bank account.
From 2017 to 2021, the OPE had paid unemployment insurance benefits in the amount of $1,372,084,673. From February 27, 2020 to March 17, 2022, disbursements were made to 527,341 PUA beneficiaries totaling $5,463,215,738.
During the pandemic, benefits were approved and paid to claimants who did not meet the requirements. From a sample of the 418,558 disputed points or issues in the claims due to missing data, it was detected that issues were eliminated without the evidence provided by the beneficiary, nor giving the reasons for eliminating the disputed point. In this regard, it was necessary for the Department of Labor to have a prior control to ensure the legality, correctness, accuracy and propriety of the fiscal operations.
The report comments on the multiple delays by the Department of Labor in delivering the requested information and documents. The Comptroller of Puerto Rico, Yesmín M. Valdivieso, notified by letter 45 days in advance of the audit's start date as well as the required documentation. Twenty-one days after the start of the audit, on January 29, 2021, 13 of the 20 required matters remained undelivered; after 61 days, 12 of the 20 matters remained undelivered, and 222 days later, two of the 20 were still pending.
In addition, on May 3, 2021, the Department's chief information officer was asked for the databases of the SABEN and FastPUA systems. The information that should have been delivered to the auditors on May 14, 2021 was delivered incomplete on December 14, 2021. The audit recommends that the Secretary of Labor and Human Resources ensure that officials or private providers do not obstruct the Office of the Comptroller's investigations and that they avoid possible criminal violations of Act 37-2004, which classifies as a felony the obstruction, delay or impediment of an audit by the Comptroller of Puerto Rico.
The Department's Internal Investigations and Security Unit (UISI) certified that, as of October 1, 2021, it had referred 323 cases totaling $36,620,171 to the Federal Bureau of Investigation, the Puerto Rico Police, the Special Investigations Bureau, and the Bank Robbery Unit. The UISI directs investigations of possible internal or external fraud by Department officials or beneficiaries of the unemployment programs.
The Employment Security Bureau of Puerto Rico of the DTRH had a federal budget of $246,881,782 and made disbursements of $157,660,625 for a difference of $89,221,157 as of June 30, 2023.
Read the Comptroller's full report here:
PDF: Report on the Employment Security Bureau of the DTRH.pdf
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