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ED OIG: Insufficient Controls for the Puerto Rico Department of Education’s Use of Education Funds for Personal Services Contracts 

March 1, 2011

Pursuit's Take

 

In our joint investigation with the Federal Bureau of Investigation and the Office of the Comptroller of Puerto Rico, we identified fraud at Puerto Rico Department of Education (PRDE) committed through the use of Personal Service Contracts (PSC). The fraud resulted in unearned PRDE payments of approximately $450,000 to individuals through fraudulent PSCs.

OIG also found deficiencies in PRDE’s contracts and amendments and identified a total of $164,9145 in unsupported or questioned costs related to inadequate support for services provided, services provided prior to contract approval, hours paid in excess of contracted hours, and errors in contract compensation rates paid.

In addition, PRDE provided unreliable expenditure data that did not reconcile with payment data for $161,527,366 in payments made during calendar years 2006 through 2008, resulting in a discrepancy of $15 million. PRDE also did not maintain a registry of PSCs corresponding to $159,474,554 paid through its paper-based payments system. As a result, OIG could not validate the number of awarded PSCs associated with the total payments to reconcile the expenditure data.

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