Board: Puerto Rico education agency paid $84M to non-workers

SAN JUAN, Puerto Rico (AP) — A federal control board that oversees Puerto Rico’s finances announced Wednesday that it has contacted federal and local law enforcement agencies after discovering the island’s Department of Education paid more than $84 million to people who no longer work there.

The payments were made from 2007 to 2020, with the department recovering only 15% of that money so far, said Natalie Jaresko, the board’s executive director. She noted the agency only recently implemented an electronic attendance system even though it had invested in one more than a decade ago, adding that she didn’t know what amount of funds might have been erroneously distributed.

Jaresko asked that all those who were paid even though they no longer worked for the agency voluntarily return the money, adding that it’s “very possible” people collected the checks of workers who died. An estimated 17,500 former employees overall received checks, she said.

“Payroll must be paid only to those who earn their salaries,” she said, calling the situation a “systematic failure.”

Jaresko said she did not know if federal funds were involved.

Puerto Rico continues to restructure a portion of its more than $70 billion public debt load amid an economic crisis, the coronavirus pandemic and efforts to rebuild from hurricanes and earthquakes.

Jaresko said the board first investigated the Department of Education because it is the largest government agency, with some 40,000 employees, representing 40% of government workers. More investigations into other agencies will follow, she said.

Education Secretary Eligio Hernández said in a statement that the department provided the information to the board and is cooperating. He said the agency is still trying to recover the remaining money and that for the past 13 years it has been transitioning from a manual attendance system to a digital one.

The department has long struggled with bureaucracy and blamed its problems on limited resources. Jaresko noted that money was taken away from other public agencies last year and given to the Department of Education because it had insufficient funds for payroll.

Jaresko said Puerto Rico’s government as a whole does not require public workers to log in time and attendance, noting that employees who don’t punch in still get paid. The board wants to implement an automated system linked to payroll this year that will be mandatory to use to avoid similar situations.

“This is not one administration, one political party,” she said. “This is a systemic problem.”

Also on Wednesday, the island’s comptroller’s office announced that the heavily indebted Puerto Rico Electric Power Authority spent $192 million on buying land or developing projects that were never built or completed. More than $62 million alone was invested in a proposed natural gas pipeline, a project that was canceled more than a decade ago.

Investigators also accused the company of not adhering to transparency standards, noting that it had not published on its website nearly 200 contracts and amendments worth more than $1.9 billion.

Efran Paredes, the company’s interim director, said in a statement that the agency’s internal audit department is evaluating the findings and recommendations to improve and correct what’s needed. He also said it will adopt the corrective measures sought by the comptroller’s office.

Puerto Rico’s power company has long blamed problems including ongoing outages and lack of maintenance on limited resources.