Federal Reports

We found that the Puerto Rico Department of Education (PRDE) generally obligated and spent Recovery Act funds in accordance with applicable laws, regulations, guidance, and program requirements. However, we found that PRDE did not follow proper procurement procedures when using Recovery Act funds to purchase equipment totaling more than $3.4 million and overpaid $7,000 in Recovery Act funds for professional services not rendered. In addition, computer equipment PRDE had purchased with $3.5 million of Recovery Act funds was unused because required software had not been installed. Our audit also noted that in December 2011, PRDE received a waiver to extend the grant obligation for its Title I funds until September 30, 2012, and the liquidation period to December 29, 2012. However, as of September 30, 2012, PRDE had a remaining balance of $35.3 million in funds, representing more than 9 percent of its $386.4 million Title I allocation. This significant remaining balance raised concerns about PRDE’s ability to liquidate its remaining funds on allowable costs that were obligated before the end of the grant period. We made nine recommendations, including that the Department follow up with PRDE during a future monitoring visit to determine whether the funds were obligated and liquidated appropriately.