Monday, September 24, 2018

Comptroller reveals Puerto Rico power company irregularities

By on August 16, 2018

SAN JUAN – The Puerto Rico Comptroller’s Office Thursday said it found evidence of irregularities in the electric power company’s fuel purchasing and payments for professional service.

The report establishes that in eight contracts and an amendment for the purchase of $4.6 billion worth of fuel between 2008 and 2012, the Puerto Rico Electric Power Authority (Prepa) did not include in the contracts a clause to charge interest for delays. Despite the absence of this clause in the contracts, the utility disbursed $3.3 million to the suppliers.

“In addition, contrary to the Payment of Interest Procedure of 1996 and other regulations in force, the Treasurer of PREPA could not provide for the examination of our auditors the reports and the investigations carried out on the payment of charges for the delay,” the report states.

The audit of three findings indicates that $2.3 billion in payments were made to a company that had pleaded guilty to fraud in 2006.

“This situation in conflict with Act 458-2000 on the Prohibition of Awarding a Bid or Contract to Persons Convicted of crimes of Fraud, Misappropriation or Embezzlement of Public Funds, was carried out in the transfer of funds to third parties at the request of the provider. This transfer of funds is regulated by the Procedures for Processing the Transfer of Funds approved in 2002. However, the Finance Directors and the Treasurers of the Authority did not confirm the sworn statement of the supplier,” the report reads.

From 2009 to 2017, Prepa disbursed $2.7 million to 29 contractors to recognize and pay debts for services rendered without a contract. “This situation, contrary to the law in force, [coulf lead to] the submission of fraudulent and illegal claims and that payments are made for services not rendered.”

“The Report states that a fuel supplier that filed and paid their Monthly Tax Return to the Department of the Treasury more than two years after the term established by the Law was identified,” the comptroller said.

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