Cossec Execs Rebut Comptroller’s Audit Report
SAN JUAN–Several executives from the Cooperatives Supervision & Insurance Corp. (Cossec by its Spanish acronym) reacted to a recent audit report by the Puerto Rico Comptroller’s Office, which allegedly pointed at several deficiencies found in the handling of the institution’s investments portfolio.
Labeling the audit report’s information as “misguided” on Wednesday, the Cossec executives, led by its Executive President Daniel Rodríguez Collazo, noted a report quoted in the audit highlighted deficiencies the public corporation had been experiencing for more than a decade.
Those deficiencies, the Cossec executives pointed out, were tended to and corrected, adding Cossec now “enjoys a model organizational structure, with high levels of management and modern technological tools that rival any financial institutions in Puerto Rico.”
“The report indicated that Cossec, its board of directors and investment committee had no written procedures to regulate their work. The reality is, the operations relating to the Cossec investments are regulated by the document, ‘Cossec Objectives, Guides and Investment Policy,’ approved by the board on Dec. 12, 2012. Such guides are revised periodically and its last amendments and revision were made in November 2014, when a new Liquidity Management and Earnings Plan was approved. Currently the Investment Committee is working on another revision and update to tend to the latest markets incidents,” Rodríguez Collazo said.
José Flores Vázquez, Cossec’s executive vice president, noted that contrary to what was stated in the Comptroller’s audit report, the services rendered by the managers and custodians of the public corporation had a written contract, and such information can be easily corroborated at Cossec.
“To indicate that Cossec didn’t formalize written contracts with the brokerage firms utilized to manage Cossec’s assets is incorrect. Contracts were made for every one of the services provided by the investments managers and custodians, which are routinely given to any client that requests the referred services in the investment industry,” Flores Vázquez said.
Such contracts, the Cossec executive vice president added, established the rates to be paid for the services, according to industry standards. The rates were based on previously-established basis points, out of the portfolio’s balance. Copies of said contracts were sent to the Comptroller’s Office as per instructed by their registry office, Flores Vázquez said.
Carlos Méndez, the Cossec advisor in the area of investments, noted that “the services by the investment managers and custodians are given within an industry that is highly regulated by local and federal entities, where the rights and prerogatives of the investors—in this case of Cossec—are priority.”
What’s more, for the first time in decades, Cossec’s investments reported gains since 2013 to the present, with a $1.8 million gain in 2015 and $1.4 million so far in 2016, Méndez said.