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Budget & Finance

Audit of Puerto Rico Education Dept. Finds Lack of Oversight for Disaster Aid

By Andrew Ujifusa — July 19, 2019 2 min read
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Less than two weeks after Puerto Rico’s ex-education secretary was arrested on fraud charges, a new federal audit says the Puerto Rico Department of Education has failed to ensure proper oversight over disaster-recovery money earmarked for things like textbooks and professional services.

In a report released Friday, the U.S. Department of Education’s office of inspector general also says Puerto Rico’s education department must implement its monitoring and fraud-reporting procedures to ensure that money is awarded and spent as intended. The OGI sampled six transactions involving Immediate Aid To Restart School Operations—also known as Restart aid—and found deficiencies in five, according to the report.

Without proper controls and oversight, the report states, “The Puerto Rico DOE lacks critical mechanisms for safeguarding Restart and other Federal program funds from fraud, waste, and abuse and for administering Restart program funds as Congress intended.” In April 2018, roughly half a year after Hurricane Irma and Hurricane Maria struck Puerto Rico and caused significant damage, the U.S. Department of Education awarded $589.2 million in Restart aid to Puerto Rico’s education department.

The inspector general’s office cautions that the report covers only selected funds and doesn’t come to broader conclusions about other operations in the U.S. territory’s education department. But the results of the audit are especially noteworthy in light of the federal allegations against Julia Keleher, who was Puerto Rico’s education secretary from the start of 2017 to last April, related to department contracts. (Keleher has pleaded not guilty to the charges and has been released on $30,000 bond.)

In one transaction involving the purchase of textbooks for science, math, and other subjects, the education department purchased textbooks using Restart money without following normal procedure, and did not explain the reasons why it used an alternate method for buying the textbooks, according to the audit.

The audit also found problems with how Restart money was disbursed in a contract awarded to Ernst and Young, a professional services firm. Because officials didn’t complete required paperwork, the audit states, “The Puerto Rico DOE has no assurance that the $3.9 million contract was necessary and priced fairly.”

Why is that ironic? Because the department hired Ernst and Young to administer and monitor Restart funding.

In another transaction involving $32,400 of classroom projectors using Title I aid, the report detailed similar findings about how the contract for those projectors was awarded. (The report says Puerto Rico’s department uses the same procurement process for all transactions funded by federal education grants that it plans to use for Restart money.)

The OIG notes that Puerto Rico’s education department’s provided responses to a draft of the audit, but that the inspector general did not revise its findings or recommendations based on those comments. The inspector general’s report also says this isn’t the first instance in which audits have found problems with how the Puerto Rican education department handles procurement.

A spokesman for Puerto Rico’s education department did not immediately respond to a request for comment about the audit.

Read the full OIG report, “Puerto Rico Department of Education’s Internal Controls Over the Immediate Aid to Restart School Operations Program,” below:

Video: Puerto Rican teacher Edmarie Diaz talked with Education Week about the hardships she faced immediately following Hurricane Maria in September 2017.

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