We conducted a limited review to determine whether any of the 16,267 employees the Puerto Rico DOE identified in an accounts receivable report were also included in a payroll expenditure report that identified employees whose payroll costs were charged to the Emergency Impact Aid program.
The Puerto Rico DOE may have used Department program funds for payroll costs related to inactive employees from 2007 to 2020. The Puerto Rico DOE identified nearly $79.2 million in unallowable payroll payments made to 16,267 employees between 2007 and 2020 and may have charged up to $1.3 million in unallowable payroll costs to the Temporary Emergency Impact Aid for Displaced Students program.
We recommended that the Department (1) require the Puerto Rico DOE to demonstrate that it has implemented sufficient controls over its payroll system to ensure that Department program funds are safeguarded, and, if it cannot, impose specific conditions on all Department grants awarded, including disaster and pandemic relief grants, prohibiting the use of grant funds for payroll without documentation to support that payments went to active employees; (2) closely monitor the Puerto Rico DOE’s implementation of internal controls over payroll included in its corrective action plan prepared in response to the new time and attendance controls required by the Puerto Rico Financial Oversight and Management Board; and (3) require the Puerto Rico DOE to identify the amount of unallowable payroll costs charged to the Emergency Impact Aid program and other Department programs and establish a plan to return those funds to the Department.
Data Quality and Reporting
Oversight and Monitoring—Grantees
This is one of several reports the OIG has issued on State and Territory use of disaster recovery funding. See more information on our work in this area on the Disaster Recovery page.