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PUERTO RICO
DEPARTMENT OF LABOR & HUMAN RESOURCES - OVER $15 MILLION QUESTIONED
BECAUSE OF INADEQUATE FINANCIAL MANAGEMENT SYSTEMS
This document is a summary of a
printed document. The printed document may contain charts and photographs
which are not reproduced in this electronic version. If you require the
printed version of this document, contact the Freedom of Information Act
Officer, Office of Inspector General, U.S. Department of Labor, Washington,
DC 20210, or call (202) 693-5116.
This report reflects the findings
of the Office of Inspector General at the time that the audit report was
issued. More current information may be available as a result of the resolution
of this audit by the Department of Labor program agency and the auditee.
For further information concerning the resolution of this report's findings,
please contact the program agency.
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At the request of the ETA New York Regional Administrator, we performed
an audit of the Puerto Rico Department of Labor and Human Resources (DLHR)
covering ETA and OSHA grants for the period from July 1, 1993, to September
30, 1997, to assist in resolving open issues contained in single audit
reports.
We found that DLHR did not maintain effective control over cash or properly
account for and report financial activities. These conditions existed because
financial management systems were inadequate and management did not implement
corrective actions to address recommendations cited in single audits spanning
over a decade. As a result, we questioned $15.8 million. The OIG audit
made the following findings:"
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DLHR maintained excessive cash balances of
Federal funds. The balance in the bank account used for Federal funds
should have been no more than $2.6 million. However, the average monthly
balance of Federal funds rose from $4.6 million in 1986 to$28.5 million
in 1997. Interest applicable to Federal funds for the period, July 1,
1986, through June 30, 1998, was $9.5 million."
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Financial Status Reports were not accurate and accounting entries were
not supported, resulting in questioned costs of $6.3 million($1.9 million
in excess costs and drawdowns and $4.4 million in unsupported personal
and nonpersonal service costs).
We recommended that ETA and OSHA recover a total of $15.8 million plus
an amount equal to interest owed the Federal Government since July1, 1998.
We also recommended that DLHR's letter-of-credit ability to draw funds
be revoked and payment on a reimbursement basis be instituted. If deficiencies
identified in this report are not corrected, we recommended that the two
agencies invoke sanctions contained in29 CFR 97.43. DLHR disagreed with
the findings and recommendations.
(OA Report No. 02-00-203-03-325, issued December 8,
1999).
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